Donell Edwards, Blogger
About Donell Edwards: Donell Edwards is President of CWR Media and is also founder and publisher of The College World Reporter (CWR) magazine and CWR World News & Information Service. He is also a professional speaker, freelance writer, and entrepreneur.
Know Your Money
Thursday – May 22, 2014
Knowing Your Personal Finances
The Real Value of Money
By Donell Edwards
I am writing today’s post as the result of a response that I got to a post to one of the groups that I belong to on LinkedIn. I recently submitted a post to all of my LinkedIn groups to inform them about this blog and to invite them to visit the blog. I cited a Harris Poll which shows that many Americans have serious problems managing money to emphasize the need for a blog of this nature.
Here is one of the comments that I received which shows why so many people are in trouble with money management, and why they don’t get the point: If you don’t have money, then there is nothing to worry about. Make your money and then you will know your money.
The person who made this comment may have been well meaning, or they may have been a little facetious, whatever the case, they totally missed the point. This blog discusses money but it is not about materialism or getting rich, it is about managing money more wisely and building wealth, the blog is about life and the role money plays in life. It is about understanding the real value of money. It is about using what money one has in the best way to live a fulfilled and enjoyable life, to help others, and to make the world a better place. It is about learning to budget and not overspend, it is about paying off debt, saving, and accumulating wealth.
Now allow me to explain. Most people associate wealth with money, however, as I learned from my college Economics instructor, the late Mr. Herbert Benjamin, Wealth is all of the material things produced by labor for the satisfaction of human desires and having exchange value. The factors in the production of wealth are land, labor, and capital. Wealth includes all of the factors of production, and must also be material (matter from which something can be made; raw or processed material), capable of satisfying human desire, and have exchange value. Therefore, money is not wealth, medium of exchange. Neither are shares of stock, bonds, or other securities, they are only evidence of ownership. True wealth, from an economic standpoint, is possessing all of the factors of production, land, labor, and capital. So accumulating wealth involves more than possessing money.
I am a Christian, and I respect those of you reading this blog who may not be Christians or who have no faith, that is your right. However, I am a Christian and I am not ashamed of my faith. The Bible helps understand the real value of money, and it says at Ecclesiastes 7:12, For wisdom is for a protection [the same as] money is for a protection; but the advantage of knowledge is that wisdom itself preserves alive its owners. I always like to compare Bible translations to get a better understanding and the Kings James Bible translates this scripture as, Wisdom is a defence, and money is a defence. The Bible In Basic English translates, Wisdom keeps a man from danger even as money does.
So, the true value of money is to protect us from calamity, to defend us against the unexpected, and to keep us from danger. Now, before some of you go to one of the most misquoted scriptures in the Bible to show that money is evil, 1 Timothy 6:10, that scripture does not say that money is the root of all evil, it says that the LOVE of money is a source of all kinds of evil (Good News Bible).
How is money a defence and protector? If you should lose your job, and that happens frequently in today’s world, the mortgage or rent continues, the bills keep coming, the utilities must be paid, the car note is still due, the family still needs grocery, and the list goes on and on. It is not uncommon for people to be unemployed for months or longer before finding work, and then in many instances their income is much less than it was on their former job. That’s how money is a protection. If you have used your money wisely over the years and you have an emergency fund, if you have an additional savings account, perhaps you have investments, that wise use of money will serve as a protection for you and keep you from the danger of a severe financial reversal. So, unlike the comment to my LinkedIn post putting the emphasis on making money, the real issue is what you do with the money you make.
Money is also a defence in other ways. If for some reason a child is arrested and charged with a felony and bail must be posted, and an attorney must be hired to defend him, money is a protection. What do you do as a parent in that situation if you do not have the money to help your child, or you have not handled your financial affairs in such a way that you can get access to the money you need. That is a helpless feeling for a parent. This is the real value of money, helping you to keep your family from danger.
Another major way that money is a protection is in retirement. Many young people believe they are invincible and give no thought to getting old one day and how they will take care of themselves. So they do not plan, they do not save, they have not set aside anything for retirement, or they started late in life and they do not have enough set aside to take care of all of the expenses of old age. This is why it is so important to learn at a young age how to manage money effectively and to plan for your future, because you will not always be young. One day, much sooner than you think you will be old. Money is a protection, and is a defence against the burdens and expenses of old age if we have learned and applied good money management practices during our life.
We live in an economy in this country that requires money, so there is nothing wrong with having money, there is nothing wrong with riches or wealth, what is wrong is for one to make the pursuit of riches their main goal in life. So, it is very, very important to understand the purpose, the real value of money, and to learn how to manage money effectively. The real value of money is to serve as a protection.
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Disclaimer: I have a Bachelor of Business Administration degree but I am not a financial adviser. However, I have acquired years of knowledge about personal money management through my life experience working through my own personal finances that allows me to share that knowledge with readers of Know Your Money. The Know Your Money Blog posts written by me are my own common sense observations and opinions and are for informational use only. Although my blog includes contributions from experienced financial professionals, please make your own financial decisions based on personal research or contact a financial adviser.
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