Here is a pretty simple analogy. If money is a battery, how does that change the way you look at it?
Before we get too deep into this, lets consider for a moment that you want money, and a lot of it. I think that’s a reasonable assumption. Who doesn’t want more money.
The question begs itself, how do we get it? But before we can get it, it helps to know, what money actually is.
Yes, I understand the definition of money, especially as it relates to fiat currency, and the up and coming decentralized currencies, but lets take one or two steps further back and get a real core understanding of money, because it will help us make more of it.
- How Can Re-Defining Money Help Us Make More Of It?
Money is funny, in that people assign value to pieces of paper, or bits of code and suddenly, it turns into something that some people would kill for. For that matter, and I know this will draw a bit of ire, but what is gold, if not a chunk of useless metal also, that we somehow decided is valuable.
Okay, here’s the raw truth, none of it, whether its dollars, yen, gold, bitcoin, or even arcade tokens are worth anything at all, period. Right? Well, herein is the thing, they are worth something, because, and only because, we trust that other people believe they are worth something. Lets break this down.
Dollar bills are just paper. The printing is fancy on them, but that’s hardly anything to write home about. People argue that now we’re off the gold standard, which means that the dollar isn’t pegged to any actual gold, that its even more worthless (that is assuming that you think gold has any real value). But people and nations still make a huge fuss over dollar bills, because we trust in them. We believe that our governments and our fellow citizens will honor them as a store of value, thus they have value.
Cryptocurrency is the same way. It has value, because a bunch of tech geeks told us that it has value. In the end though, it’s just a bunch of code that if the power went out, would be just about as worthless as cash, if the cash fell into a fire.
So, what about gold? Isn’t that “God’s currency” as some would have you believe. Well, lets look at gold. About the only thing gold is useful for, is jewelry, and only then, because it doesn’t turn your skin green. Aside from that, its soft, has no industrial value, and for all intents and purposes, its useless. But there is a scarcity to it, that long ago caused people to use it as currency, because it was so hard to counterfeit. You had to labor real hard in a mine if you wanted to get more of it without getting a regular job. The fact that gold has remained a currency of last resort for so long, is frankly a miracle. Maybe that miracle aspect of its longevity is why it could be termed “God’s currency.”
The alternative to any of these, is a barter system, which is incredibly inefficient. Who’s to say that your chicken is worth my corn, or that trading your car for my labor is fair? Yes you would come to some mutual agreement over time, but every deal would be subjective, and we’d waste a lot of time and effort appraising everyone’s goods for trade. Thus the need for some kind of money, in whatever form we decide to trust.
Money therefore, in whatever form it comes in, is nothing more than a way to store value—a lot like a battery is a way to store energy.
So if money is just a battery for things we value, making money, is like charging that battery.
- The Act Of Charging Our Fiscal Battery
Imagine that you have a battery, its good, its strong, it can be charged as often as you have electricity to put into it. Even more, it can hold as much power as you can put into it. So lets say that you have a hand-crank generator, and you use this to charge your battery, and you finally save a large enough charge in it to do something with. What do you do with it? You could stick it in an RC car and blow it all in a day of fun. You could plug it into your Tesla and go for a road trip. Or you could light up your house with it. There’s lots of things you could do with this stored energy. But whatever you do with it, means that its power is now gone, and you have to work at charging it again.
Now lets suppose that your friend doesn’t have any power stored in her battery, and so she wants to borrow yours for the day. You trust her, and so you agree, but you charge her for it. How does she pay you? By charging your battery back up, with a little extra energy to go with it, as payment for not having access to your battery for a day.
That is how you get more charge than maybe you could have charged it with on your own. But, and this is a big BUT, you do have to sacrifice not having that energy available to you for that day. In the financial world, this is called saving and investing.
Now lest say that you’ve gone without for some time, while others have been borrowing your battery and giving it back with extra charge. Now you have far more electricity than you could ever use in one day. Do you plug it in and just use what all is in there? Or do you still keep finding ways to charge it?
If it were me, I’d want to keep charging it as I use it, but I still have all that extra power that’s just sitting there, not being used. So I go out, and buy another battery, and I transfer that extra energy into it. Now I have my personal battery, that I keep charging each day for my usage needs, but I have another battery that I can loan out to others who need extra energy for whatever reason.
That extra battery can be lent out as often as I can find people who need it, and it’s power reserves just keep growing. The nice thing is, its also a good safety battery, in case I get sick, and can’t crank my generator for a day or two to charge my personal battery.
Eventually that extra battery brings in so much extra energy, that I can just stop using my personal battery all together and rely solely on the extra energy people give me to borrow the big one. This is akin to retirement.
- Here’s The Real Challenge
Now that you know that money is nothing more than a store of value, like a battery, the trick is finding ways to collect extra value, above what you might physically be capable of.
Does that mean that you have to rob someone of the value they’ve saved? Of course not. It means that you have to find extra ways of mining value. In this instance, we shared how loaning your energy or money to others helps bring you more value. It requires a little sacrifice in the beginning, but eventually grows bigger. That’s called investing. But its not the only way to provide value to others.
The more value you can learn to create, the more money you will naturally have.
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