Its Important to Know the Difference

What is Money?
What is Finance?


Money is the stuff you carry around in your pockets. The stuff you use, handle and spend - everyday. It is personal and practical. For example when you buy cup of coffee or a newspaper you usually pay with money (cash) out of your pocket.

Finance is numbers. Usually large numbers. Numbers which you move around by signing pieces of paper. For example when you buy a house, you sign contracts, mortgages and checks. You don't usually pay in cash out of your pocket.

Today the majority of wealth is in the form of finance - only about 4% of the worlds' money is actually available in cash. The other 96% is in the form of computer bits and bytes and exists only as numbers inside computers. Billions and billions of dollars (finance) are moved from computer to computer all around the world daily. It would be impossible for everyone to go to the banks and get all their savings in cash because the majority of the world's money does not exist in physical form.



Actions to Take:
How to really understand ..... that there really is no scarcity.
As an exercise - Imagine that I were to give you money - $1000 today and tell you that you had to spend this money by midnight. You have to spend it all on what ever you buy. You cannot buy something on payments. Write down what you would buy with the $1000.

Tomorrow I give you more money - $1000 and you have to spend all this money using the same rules as yesterday. All at once. What would you buy? Write it down.

Continue to imagine spending $1000 a day. How long can you do this before you run out of things that you want to buy? A week? Two weeks? A Month? or more? If you spend $1000 a day for 2 years and 9 months you would have spent 1 million dollars.

Someone with a billion dollars spending $1000 a day would have to live 2739 years to spend it all. Use this concept to really get that there is no "Scarcity of Money."

Bill Gates at one time was worth 84 billion - he would have to live 230,076 years to spend it all at $1000 a day. Spending this much money is "Finance" - spending in the abstract.

This exercise will also prepare your mind for you to receive money. You need to be prepared to and have an easy answer in your mind should someone offer you a gift of money. You will now have an immediate idea of what you would buy with a large amount of money. You will now have a receptivity in your mind. Before you may have been unconsciously saying, "Don't give me any money, I don't have anything to use it for. I'm not ready to receive money now. Maybe later."