Money: Is it Good, Evil, or Just a Tool?

Financial Planning /
Favorite Posts

Money is a subject fraught with hang-ups for most people.  I will admit I’m not entirely immune to them myself.  We’ve all heard and often been warned that “money is evil” or “money is the root of all evil.”  The take away is generally that people with money are bad, and thus, money is bad.  Therefore, you shouldn’t strive for wealth, because why on Earth would you want to go to the dark side?

I believe the vast majority of the people who hold opinions like these are people who don’t have much in the way of wealth.  It is far easier to throw stones if you don’t live in a glass house after all.  But there’s nothing inherently evil about money if you think about it objectively.  So, let’s break it down.  What IS money, really?

At its simplest, money is a tool.  Money is a contrived system for measuring value – the value of work and the value of objects.  Throughout history, different civilizations have created different forms of currency.  Currency is merely a vehicle or means of transacting value.

Money as currency has meaning.  It is worth something, simply because we all agree that it is worth something.  Way back when, we might have agreed in our village that a chicken was “worth” 10 shells (or whatever the prevailing currency was.)  As civilizations got more and more sophisticated, entire systems of valuing objects and work evolved into what we use today.  In modern times, our idea of “value” has become skewed.  For some ridiculous reason, we have decided as a society that an hour of work as a mechanic is “worth” far less than an hour of “work” as a Hollywood socialite at a party.

Arguably, our system is less than perfect in the United States, but we aren’t alone.  If you have time, it’s an interesting digression to compare the “worth” of things across different cultures.  But back to the original question – is money evil?  I say no.  Money itself is just a tool.  Human beings have deemed it worth something, and it is humans who use the tool with good, or possibly evil, intentions.

Let me just cut to the chase:  If money is not evil, then why are rich people pretty uniformly loathed by the masses?  There are countless examples of wealthy people who do wonderful things with their money.  They fund charitable endeavors, they build businesses that employ people, and they help their communities, to name a few.  But there are also the bad guys, people who have made their riches by scamming people out of their hard-earned money.

Then there are rich celebrities.  Some are genuinely talented folks who have worked hard and deserve the wealth they have built.  But there are also numerous examples of people who are famous for … well, I’m not sure what the hell they are famous for other than being who they are and doing ridiculous things that people find newsworthy.

As consumers, we vote with our dollars and with our attention.  If we frequent the films produced by talented actors, those actors make a good living and build wealth.  If we constantly tune in to the antics of the talentless “celebrities” (ooh, I am so itching to name names, but I won’t) and buy the products they use or endorse, then they will make money.  Is this the reason people hate the rich?

Sadly, that is NOT the reason.  It’s unclear why there is a pretty chronic dislike of people with money.  If you agree with the basic concept that money is a tool that is a measure of value, and if as consumers we vote with our wallets, then the people who are “rich” are rich because we made them rich.  Maybe they created a company that makes awesome products we love to use.  Maybe they provided exceptional value in their area of expertise.  Or it might be because sometimes we just buy stupid shit with our money, for no rational reason, and that makes someone else rich.

Personally, I find the way some people have made their money completely egregious.  But instead of universally being haters of the people who have truly earned their wealth, let’s focus on the fact that in most circumstances, becoming wealthy boils down to two absolute requirements:

  1. You must provide exceptional value to the world.
  2. Once you provide value and earn money in exchange, you must spend less than you earn.

See?  Totally easy!  Piece of cake.  It’s the secret to building riches!

You’re welcome.

Now it is your turn.  What twists you up about money?

Leave a Reply

Your email address will not be published. Required fields are marked *