The Value of Money - here's my perspective

Allow me to offer my perspective on the value of money. I admit that my view is rather simplistic, but I think the simplicity of my view helps present a much more understandable definition of money. What we don't need is someone trying to make it appear more complex...we have enough of those people.

The idea of value is very similar to the idea of appreciation, so let's look at what it is we appreciate about money. Some of the things we appreciate about money are obvious, but sometimes they can be a bit elusive. The trick is to minimize the elusiveness so we can keep our eye on the ball.

Let's articulate what we appreciate about money. This should help us keep these values upfront and center where a good money manager would like them to be. Here is what many of us appreciate about money, even if we don't have these things in the forefront of our minds:

  • Money provides a measuring stick of worth. When we want to know the value of something, we can express it in terms of dollars. Everyone understands what a dollar is, so it's easy to understand the value of something expressed in terms of dollars.

How else might we do it? Would we express the value of something in terms of labor hours, bushels of apples, gallons of gasoline, or bags of groceries? We could, but it's clear to see the value of money as a common denominator for giving us a way to measure worth. Think of the phrase, "It's a million dollar view" as you get the picture clear enough.

  • Money helps us get nearly everything that we need and want. There are only a few things in our lives that money can't buy. I'm not suggesting that money can buy love, happiness, fulfillment or time, but it can buy us plenty of other things that are often viewed as essential to our lives. Money can buy us transportation, entertainment, shelter, food, clothing, numerous products, tools, equipment, assistance from others, and various forms of communication. As the song says, it's "...what it takes to get along." There are many goodies in life that we can purchase and enjoy. All of these help show us the value of money.
  • Money provides us with options. This is of utmost importance, as having little or no money means you have few if any options. Once while witnessing criminal court proceedings, a judge granted a prisoner be released on his own recognizance. The 22 year old had been in jail awaiting trial for 8 months on a burglary charge...my first clue that he had no money. The man was represented by a public defender...my second clue that he had no money.

And, it seemed likely that neither he, nor his family, nor his friends had any money to speak of because no one came to bail him out of jail. Again, little or no money equates to few if any options.The lesson here is simply that the value of money can be seen as a reflection of the choices that are available to us.



  • Money can be made to work for you. Whether you invest in stocks, bonds, precious metals or jewels, money can acquire things for you that appreciate in value. You can also hire an assistant to work for you, and pay them money, and then sell the product of their labor for profit.

Either way, you can put money to work for you.

  • Money is a highly liquid asset. With real estate, equipment or material resources, one has to perform a sale or make some other sort of conversion to get the wealth extracted for use. With money, it's about as liquid an asset as you're likely to have. It's readily recognized and accepted as wealth without any sort of conversion or sale. As you might expect, money is the preferred asset desired by government agents, trial attorneys, politicians and other criminals all across the country who would like to transfer your wealth to themselves. And, you'll find that it's the only type of payment accepted during an emergency - no checks, no credit cards please - only cash money.

A key part of living a life with a sense of well being is having freedom to choose. Isn't it great to be able to make personal choices about you and your family? Of course it is. More often than not, the choices available to us are directly related to how much money we have. For me, this punctuates the value of money.


Let's say you need to get across town this evening to see a movie. Are you walking, riding a bike, taking a cab, hopping on the commuter train, thumbing a ride, taking the bus, or are you getting there in your own personal vehicle? As you can see, the value of money exhibits itself in the form of personal choice and convenience. Isn't it nice to have a choice?

With little money for discretionary spending, we might not be concerned at all with how we'll get to the movie. It may be that merely the price of admission is well outside our financial reach.

Don't let yourself get backed into a financial corner where your choices are limited. Understand the value of money, and you'll treat it well. In turn, it will treat you just fine by helping you keep your options open.

Done with The Value of Money, take me back to The Money Game