Blog #005

So. Money.

Many people have referred to money as “the root of all evil,” but I don’t believe that. I believe money, in the current world we live in, is power and freedom. What a person does with money makes it good or evil.

If a person has enough money, he or she can almost do whatever they want, or get others to do what they want. A good example would be politics, but I don’t want to get into that. Let’s stick to money.

img_2192I began studying money. Like any skill or profession, a person could learn to manage money similar to the way a person would learn to play an instrument or a sport. The problem with most people is they don’t look at it that way. People look at money as something that’s earned through working laborious hours for another business owner and used to pay bills and buy fancy things. Many people think, “I don’t know how to manage money, and I never will.” But, if the little knowledge I’ve studied so far about the American market is right, money can grow.

Money invested into equity, many times, if the equity has a bright future, can produce a gradual return that beats the growth of inflation exponentially.

My buddy, Gil, and I inputted theoretical earnings into a Roth IRA calculator that calculated putting $5,000 annually into an IRA account for 40 years. Before I reveal the answer, I want to say, Albert Einstein is quoted to have said, “compound interest is the greatest mathematical discovery of all time.”

If a person were to consistently put $5,000 away for the entire 40 years, considering compound interest and continual investments, a person could potentially be looking at about $1 million. And that’s just putting money into an IRA with a 7% annual interest appreciation.

On the other hand, a person could potentially invest in common stocks and gather a greater return. Safe stock, stocks believed to be somewhat resilient to the affects of the general market, stocks like Google, Amazon, or Netflix, are good investments because these companies have enough stability to stay in the market for a very long time.

Anyways. Investments can be a completely different conversation in itself, but I want to talk about money. My experiences have taught me that money is not just something used to buy food or candy or pay rent; money is used to do practically everything.

When I flew overseas to tour Southeast Asia with my dad, we were met with a large culture barrier that prevented us from understanding and communicating using even the simplest gestures. We couldn’t wave without insulting a person native to the area, let alone try to speak with one. However, whenever we flashed a little green, or in their case, blue, red, or even transparent, all of a sudden every person wanted to help.

img_2195I remember writing in my journal back in 2012, “money is a language.” Now that I’m older, I still attest to this. But it’s also more than that now. Money is used to work, to accrue appreciation over time. Investment capital is used to pay for the endeavors of a company, which companies award investors by generating returns on their initial investment.

Becoming financially free would involve putting money to work, and using money to do things, like travel, buy equipment, and create. At the end of the day, money, in our world, can be pretty much used for everything. Even generating more money.

What do you think about money?

Have your experiences with money taught you anything?