The Purpose of Money

Money has three purposes

1. It is a means of exchange. It gives us a more efficient way to trade for the things we want. Instead of bartering, we trade money for a product or service and the person receiving the money can trade it for any product or service someone else is willing to sell.
2. It is a unit of account. Money gives us a way to put a price on a product or service and to easily compare it to one offered by a different provider. This allows us to determine the best value.
3. It stores value. When we are paid money for a product or service, the actual amount we have received does not change. If we don't use it immediately, our money is not always very effective at storing value due to factors such as inflation and fluctuations in world markets.

Money is simply a tool with the three purposes stated above. Dollars are just pieces of paper with no value of their own. Our currency is not even backed by precious metal as it was until 1971. Any value you might think it has, we have agreed upon as a group; consciously or unconsciously.

When it comes to money, something has gone horribly wrong. As a society, we have created a culture of greed where money is desired as an end in itself. This is expressed as a desire to "get rich." People lie, cheat and steal for money. Some have even killed for it. We have been taught to want far more than we need.

Equanomics will never tell you how much you should want materially. What we will suggest is that you have an honest conversation with yourself to determine what you need and what you want in your life. It is with those answers that you can set out to earn money with a new set of eyes. The best way we can explain this to you is with the story of the fisherman and the businessman:

A businessman was at the pier of a small coastal village when a small boat with just one fisherman docked. Inside the small boat were several large yellowfin tuna. The businessman complimented the fisherman on the quality of his fish and asked how long it took to catch them. The fisherman replied, “only a little while.”

The businessman asked why he didn’t stay out longer and catch more fish. The fisherman said he had enough to support his family’s immediate needs. The businessman then asked, “but then what do you do with the rest of your time?” The fisherman said, “I sleep late, fish a little, play with my children, take a nap with my wife, stroll into the village each evening where I sip wine and play guitar with my friends; I have a full and busy life.”

The businessman scoffed, “I am a Harvard MBA and I could help you. You should spend more time fishing and with the proceeds buy a bigger boat. With the proceeds of that you