What is money anyway?

The more I learn and read about money and human nature the more philosophical I find myself getting.  And this is really saying something because my mind is somewhat scientific and mathematical.  I am reading a book right now which was written by a financial planning thought-leader, perhaps one of the first to really articulate concepts about money from the “inside out”.  That is, looking at money from the perspectives of individuals and families instead of from the perspective of macroeconomics and investment theory. In the book, the author Dick Wagner, challenges the reader to think about what money really is.  He writes “Remember that money is purely symbolic, ultimately limited only by our agreements.  It is what we say it is.”  He goes on to point out that we humans created money.  Money does not exist anywhere in nature.  And therefore money skills are not in our DNA.  It’s obvious, but perhaps one of the most profound statements I have read in a while.

People beat themselves up about money every single day.  There is the constant ringing of ‘I should be better at this’, ‘I should have more’, I should, I should, I should.  But really, why on earth should we?  It’s not in our DNA and no one ever teaches us about it.  We are left to figure it out.  It is assumed that this 21st century survival skill will be absorbed by osmosis.  Which might be possible if there was no such thing as life and relationships.  But life, relationships and money come together in what can be best described as a messy intersection.  Dick Wagner writes ‘money gets into our guts, minds and daily lives like nothing else.’

It is my unique challenge to understand money, to deal with it more thoughtfully than most others and help people to understand what it means to them.  That is a continual journey because I don’t think anyone can ever be done learning about something that is so simple in its concepts, yet so frustratingly complex in its application.

I love this drawing by Carl Richards (one of my mentors) which I think illustrates the problem. Most of us are stuck in the ball of complexity.  People’s individual relationships with money are tangled in there somewhere, and the whole investing industry is certainly in there (one of the things I hate most about my industry).  The problem is that we can’t be simplistic about money, it just doesn't allow us.  What we can do though is move through the messy ball and out the other side to what Carl describes as ‘elegant simplicity’.  Surely that is where we want to be?

I think that most people are unable to do that alone.  They can never separate out all the tangled threads, because the threads tie together your childhood, your adulthood, your relationships with your parents, your relationships with your children, your self-worth, your feelings about what others around you have, your view of the world, your misconceptions about risk, the stock markets, and so it goes on and on.  Dick Wagner sums it up perfectly in the sentence ‘everyone is weird about money’.

But money is also pretty amazing (though it can certainly have a dark side).  In fact, Wagner asserts that it might be humanity's single greatest innovation.  But what do we really know about it, he asks?  I challenge you to do this today.  Take a bill from you purse and stare at it.  Now be thoughtful around it and ask yourself, what is money?  How did it get here?  Where does it come from?  What does it do?  Why does it have such power?  Why do I work so hard just to get it?

Now think about what your life would look without it.