Does it Take Money to Make Money?…….
I got together with GH for breakfast the following day. I asked him what are his thoughts on my question; what is money and what is wealth? He tells me that he looked up the definitions of money and wealth in the dictionary and come up with this:
mon·ey
1. A medium that can be exchanged for goods and services and is used as a measure of their values on the market, including among its forms a commodity such as gold, an officially issued coin or note, or a deposit in a checking account or other readily liquifiable account.
2. The official currency, coins, and negotiable paper notes issued by a government.
3. Assets and property considered in terms of monetary value; wealth.
4.
a. Pecuniary profit or loss: He made money on the sale of his properties.
b. One's salary; pay: It was a terrible job, but the money was good.
5. An amount of cash or credit: raised the money for the new playground.
6. Sums of money, especially of a specified nature. Often used in the plural: state tax moneys; monies set aside for research and development.
7. A wealthy person, family, or group: to come from old money; to marry into money.
wealth
1.
a. An abundance of valuable material possessions or resources; riches.
b. The state of being rich; affluence.
2. All goods and resources having value in terms of exchange or use.
3. A great amount; a profusion: a wealth of advice.
After reviewing the definitions, I looked at him and said “well?”
“Well, I think that money is part of wealth, but I can’t explain it, I sense that I can be wealthy but have no money or I can have money and not be wealthy.” He said.
“Excellent intuition!” I commented.
“I will now tell you a story, this story is going to show you that you are wealthy; in addition, it will show you why it does not take money to make money. Would you like to hear it?” I asked.
“Yeah, sure.” He replied.
“Now humor me, if you will; I will ask you questions as we go along, ok?” I said.
“Ok” He quipped.
I then proceeded with my story:
There was this Man whom the Earth was gifted to him; he was the only one on the whole planet and he owned everything. He hunted and gathered for his subsistence, and lived well. Rising every morning to hunt, gather and build or maintain his shelter and so on.
“Now, was this man wealthy?” I asked.
“Um, yeah” He replied.
“Did this man have money?” I asked.
“Mmm, no. I think he didn’t have money.” He answered.
“Why do you think he didn’t have money?” I queried.
“Because he didn’t need it, he was the only one on the planet so there wasn’t any reason for him to need money. He didn’t have anyone else to trade with, so he has to do everything himself.” He said.
“Excellent!” I replied.
So I continued with the story.
The Man’s life is going pretty good and happy until one day he thinks to himself: ‘Wow, it would be pretty cool if there was someone else just like me here on Earth, so I could hang out and do things.’ Poof!! Just like that, there was this other Man created and both Men shared ownership of the Earth equally.
So they hang out together and life is pretty good and happy until one day the first Man goes hunting and the second Man goes fishing. While returning from a successful hunt the first Man trips on a stone and as he falls the stone rolls and produces a spark, this spark in turn falls on some twigs and grass and lights a fire. His prey falls on the fire and is cooked. The first Man sees this, and at first he is scared but soon is intrigued and curious about what has just happened. He checks his prey and thinks it is spoiled, he takes a bite and is surprised that it tastes good. So the first Man picks up his prey and some of the rocks on which he tripped and takes them to his shelter. When he arrives at his shelter his buddy is there already with some fish, the first Man shares some of the cooked prey with his buddy and his buddy agrees that the cooked prey tastes good.
The next day again the first Man leaves to hunt and the second Man goes fishing. This time though the first Man remembers the stones that produced the spark, so instead of going hunting he begins to thinker with the stones. After lots of trial and error and bruised and busted fingers and knuckles he is able to produce a stable campfire. As the evening approaches the first Man realizes that he doesn’t have anything to eat because he didn’t go hunting. Soon the Second Man appears with a load of fish, he sees the fire and agrees to share his fish with the first Man if they cook the fish. The following days are pretty much the same until the first Man gets pretty good at lighting the fire and instead of taking him all day he can do it within minutes. Soon the first Man realizes that he can have free time from hunting, because the second Man agrees to share his catch if the first Man shares his fire. So life continues pretty well for both of them.
Now, I ask GH “are both men wealthy?”
“Mmm, yeah, I think so.” He replies.
“Are they equally wealthy?” I ask.
“Yeah, I think so.” He says.
“Are you sure?” I ask.
“No.” He replies.
“Whom would you think is wealthier?” I ask.
“I would think the first Man would be wealthier.” He replies.
“Why is that?” I ask.
“I think the first Man, because he now has time to hunt and make a fire.” He said.
“Excellent!” I exclaimed.
“Is there any money?” I asked
“No, at least I don’t think so.” He replies.
“Could there be money?” I ask.
“Yeah, I think there could be money.” He says.
“If there was money, what purpose would it serve among the two of them?” I ask.
“I think if they had money, it could serve them to have one do something for the other.” He said.
“Good going!” I say.
“What are they doing now? I mean what does the first Man give the second Man and vice versa?” I ask.
“Well, I think they are trading something of value to each other; so I would say they are trading.” He replied.
“What is that trading called?” I asked.
“I don’t really know or remember.” He said.
“It is called barter.” I said.
Here is the definition:
bar·ter
v.intr.
To trade goods or services without the exchange of money.
v.tr.
To trade (goods or services) without the exchange of money.
“Ok then.” I continued.
“What is it called what the first Man has that the second doesn’t have?” I ask him.
“Do you mean knowledge?” He said uncertainly.
“Yes, knowledge; that is what the first Man has that the second Man doesn’t have.” I said.
“Can the knowledge that the first Man has be turned into money?” I ask.
“Yeah, sure I guess.” He said.
“What would you call that turning of knowledge into money, I mean the act of turning knowledge into money?” I ask.
“I don’t know. What would you call it?” He replied and asked.
“GH, we call it Monetizing.” I said.
I decided to call it a day; then I told him he had enough for today and would continue with our story and lesson tomorrow. I asked him to think about what he had learned today for we were going to discuss it later on.
-Sapiens