Money makes the world go round - Money is a means to an end

Money makes the world go round

Money is an essential element of society. Money is not just a word or a need to a human being. It is the wheel over which we as humans are living our life. To understand the importance of money, first of all, we need to see what does money stands for in economics. Before that, we need to see what is the purpose of money. Even if we need to buy bread in the car, the house, the foreign trip or if we need to finance our education, everything is done using the money. Money is the most valuable asset which is required in order to buy or even ret any good, commodity, or service (Brewer, J. 2002).

The money is the object which can be exchanged to buy any purpose in the world. In economics, the word money is defined as Money o, money one, and Money 2. This is the range of liquidity. Such as money 1 is the most liquid form of money, which is easiest to use. The money two is least liquid but is the form of money and can be used in the form of money to buy anything in the world (Fisher, I. 2006).

Money makes the world go round proverb

There is a famous quote that says, ‘Money Walks Everyone Talks.’ This quote is an accurate depiction of how powerful money is and what it can do. The money is a powerful tool and element that has a robust demand. This is why anyone is willing to do anything for anyone so that is the reason by which we can say that money is one of the most demanded objects of this world. This is why we can say that with money, we can control any person, any company, or organization, and this is why money has turned into a powerful commodity (Zhou, 2009).

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Money is a means to an end

Many years ago I learnt from Kim Potgieter, a well-known financial planner in South Africa, six money questions. Since then I have incorporated these in my first meeting with new financial planning clients. These questions probe people's relations with money. You may want to go through them, to reveal your relationship with money.

1.    What is the money for?

2.    What lessons about money did you learn while growing up?

3.    Who are the people in your life that are affected by the financial decisions you make?

4.    What past experiences with your advisers stand out in your mind and how had these experiences impacted how you work with your advisers now?

5.    If you had all the money that you would ever need, what would you do differently with your life?

6.    What does money truly represent to you?

Answer these questions truthfully. Then reflect on your answers. Is there anything you would like to change on how you relate to money? How can money make you more secure or happier?

There are no right or wrong answers. Every individual is unique. What is right for someone else is not necessarily right for you.

The first question is to understand what the money is for. For some, it's about to provide for oneself, or her loved ones. For others, it's about acquiring material things, such as providing food on the table, renting an apartment, buying furniture, a house or a car. Yes for some, it's about achieving certain goals, for example an overseas holiday, to complete tertiary education.

Question 2 is about your life lessons about money. It speaks about your upbringing, and the people and things around you that have shaped your ideas about money. Typically people are influenced by adults that raised them: Parents, guardians, grandparents. You cannot choose your parents, but you can learn from the lessons and ideas they shared with you, whether good or bad.

Question 3 is about your responsibility. Most of us care for at least one person, in South Africa where unemployment and poverty is rife, you may provide for many people. Your financial decisions will have an impact on those that depend on you for support.

Question 4 is about your experience and expectations of a financial advisor. Many people need a financial advisor to guide them through their financial journey. Poor past experience may influence how you want to work with a financial advisor. It is also important to find a financial advisor with the right fit, a person you can trust and relate to, apart from his/her qualifications and experience.

Question 5 is a million-dollar question. Maybe you are lucky to win the lotto, and your life is completely changed financially (and you will need a good financial advisor more than ever!). This question also reveals your character, personality and your priorities.

Question 6 is such a deep, philosophical question. Answers I have heard from clients include: to have; flexibility; to afford; options; comfort; to make things happen.

Once we understand that money is just a medium of transaction, that money is a means to an end (objective), then we will not accumulate money for the sake of it.