During a recent discussion with a group of struggling entrepreneurs, the question “What is money?” came up. It was asked by a gentleman who was on the verge of quitting on his entrepreneurial ambitions. “All of this stress isn’t worth any amount of money,” he commented, then none too calmly asked, “What the hell is money anyhow?”

The interesting point of note was that no one at the conference table could provide more than a basic definition in trying to answer the question: what is money?

This particular group of business men and women was comprised of every day folks who are trying to do their own thing. No one was a student of economics per se; just a bunch of folks who didn’t want to keep working for someone else’s benefit and so started their own home-based business.

Everyone knows that money is what we use to trade goods and services. Someone has something you want, you give them money to get it. Once upon a time you might have given them something else you owned that they wanted badly enough to trade your item for their item; but these days money is the currency used in trading worldwide.

The word currency and the word money are not interchangeable. Money is an example of currency; but money isn’t the only type of currency, so you’re not necessarily only talking about money when you talk about currency. Currency is anything that is circulated as a medium of exchange, and money is circulated as a medium of exchange, therefore money can be categorized as currency the same way an apple can be categorized as a fruit.

The value of money is in the value of the goods that money is used to obtain. In her book “The Fountainhead” Ayn Rand’s character Francisco D’Anconia comments to a group of people who are arguing that money is the root of all evil, that money is a tool of exchange that can’t exist unless there are goods produced and men able to produce them.

Money is just the thing you give to get the thing you want. If you want nothing then having no money won’t affect you except insofar as you need money to eat and you need money for shelter and clothing and other necessities. If you’re creative enough to manage to obtain food and shelter and any other necessity without needing money, then you can survive and be quite content without money.

No one needs money to be happy. Life is not more meaningful the more money you have. If that was the case there would never be a instance of a rich person committing suicide; but rich people kill themselves often enough to prove that having money doesn’t give life more meaning. Life might be more bountiful when you have money, but inanimate objects cannot evoke joy except where an individual has lost touch with reality. Money can enhance life, make your living circumstances more comfortable, where lack of it can make your living circumstances less comfortable; and in that way seeking to have more money makes sense if you seek to have a comfortable life and you define comfort in terms of expensive “things”.

But the value of money is in the “things” it affords, and the value of things often doesn’t amount to more than the money spent to obtain them. Indeed not all of the things having money affords are frivolous and materialistic. You can’t see a doctor without money for example. There are times when having money or not having money makes the difference between life and death; so money is without question important.

But the true value of money isn’t in the money itself. As D’Anconia puts it in “The Fountainhead”:

“…money is only a tool. It will take you wherever you wish but it will not replace you as the driver. It will give you the means for the satisfaction of your desires, but it will not provide you with desires.”

Did you spend money today on things you didn’t need? Maybe you’re addicted to cigarettes and bought a pack of cigarettes? You’d have to put that under things you don’t need because you don’t need the cigarettes technically. Your life won’t end if you don’t smoke. Far from it smoking can lead to your early demise. So maybe you bought a pack of cigarettes for $3.00. Then maybe you bought a pack of gum for $1.99, a bottle of soda for $1.00, a snickers bar for $1.00, another soda for another $1.00. You get the picture. Money adds up. $10 dollars wasted per day at 365 days is $3650.

Even if you have an issue with saving for the proverbial rainy day, lets say you’ve been wanting to buy a big screen TV for a good few years but you just can’t ever seem to find an extra $1500. Saving up for a TV for an entire year might seem like an eternal age of saving to you, but if you look at it like this, you’ve been wanting the TV for a few years but still don’t have it because the money just isn’t falling from the sky no matter how long you wait. If you’d been saving just half of the $10 you spend every day on things you didn’t need to buy, you could have already purchased the television set. Of course it’s just a TV and could also be classified under spending money on things you don’t need; but the point is, you’d have had the option to buy the TV if you’d forgone the chewing gum, the snickers bar and the two sodas.

When you spend your money on unneeded things, like snacks bought not because you’re hungry but because you were walking pass a vending machine and saw the snacks and figured “why not?”, you’re pretty much just going over to the company you’re buying from and putting your money in their pocket as if to say you know they love money and you don’t have any use for money so they can have yours and you’ll just take the snickers bar. What can you do with a snickers bar other than eat it and then expel the residue as waste?

Low income and poor people don’t tend to think of money in terms of saving and stretching and growing. When they get their hands on money they tend to spend it. They live with so much deprivation that any extra money they get their hands on goes to buy things they had to do without while they didn’t have the money. It’s the reason so many of the poor people who win the lottery, for example, end up poor again. They don’t really understand the value of money, not because they’re a bunch of fools, but because no one goes into poor communities to educate the poor about the value of money. For some reason, it’s thought that only people who have money need information on how to manage money and how to make money multiply. It’s assumed poor people are poor because they’re stupid. Being uninformed doesn’t make you stupid. One isn’t stupid who doesn’t understand what someone is saying who is speaking in a language with which they are not familiar. One simply doesn’t understand and would need to learn the language or else the speaker needs to speak in a language the listener understands.

A few days ago I was having a conversation with a lady. She’s a struggling entrepreneur and she wanted to talk about her money-making plans for the New Year. We’ve probably had a similar conversation every year for the last several years. Whenever we talk it’s always about money and depression - specifically depression that results from the struggle to achieve financial success. As I listened to her talk I found I could not get as caught up in the urgency of the need to be rich as once upon a time. It dawned on me during my conversation with her that I’m no longer in that frame of mind where everything is about having millions and life seems less worth living because I don’t have the millions I want. It’s the sense of accomplishment that will come with achieving the goals I’ve set for myself that keeps me going these days, rather than a need to have a fat bank account.

My lady friend might well be chasing that sense of accomplishment herself, but to hear her talk, it would seem that her sole motivation is to get rich, and I found I couldn’t identify with her way of thinking that having millions will somehow make her more worthy. I appreciate that she wants financial freedom, that her idea of a good life is one of being able to spend a million dollars on a toy if she so desires; but I find it unfortunate that she appears to truly believe that she’s nothing without money and that people who have no money have no value or cause to think they’re worth anything or that their life is in any way interesting or noteworthy for other than negative reasons.

The differences between rich people and poor people are entirely superficial. You won’t find a poor person owning a private jet. You won’t find a poor person driving a Bentley. You won’t find a poor person owning a yacht. You won’t find a poor person staying in a $10,000 per night suite at the Ritz Carlton. Rich people can afford whatever they want, which was one of the main complaints my friend was making about her life. She can’t afford to buy a Valentino handbag for $1600 and that’s frustrating for her. She wants the freedom to be able to buy $10,000 accessories if she so chooses. And that’s the only difference between being rich and poor, having no choice in where you live, what you eat, how you dress, what you drive etc, and having the freedom to choose to live in a mansion in Beverly Hills or a condo in Manhattan, drive a luxury vehicle, chat on a $10,000 cellphone, adorn your wrist with a $50,000 watch, eat in exclusive restaurants, cruise around the world on a private yacht.

The difference between myself and my friend, I realized during our conversation, is that the lifestyle of the rich is what she craves. Her need to be rich has everything to do with image. For myself, the lifestyle is not enticing. I don’t fantasize about doing lunch with The Donald, or owning a private jet. I do fantasize about traveling with my family, relaxing in the comfort of our dream home, playing tennis with my spouse, going to Disneyland with the grandchildren I hope to have in another decade and being able to properly take care of my health and the health of my family. What I’m after is financial freedom and personal success, not status and prestige.

A lady I know named Janine makes $30,000 per year selling fruits and vegetables she grows in her own back yard. She says she was sitting around one day trying to think of ways to make money from home so she could stay home with her boys, when one of her sons said something to his dad that turned on a light bulb in her head.

The son had asked the dad for money to buy a new video game, and the dad replied something to the effect of, “Didn’t I just give you money to buy a new video game two days ago? Money doesn’t grow on trees you know.” At that the son, an 8 year old, replied, “Well, in a way money does grow on trees,” and when asked to explain himself, went on to state that his friend’s dad grows peaches and sells the peaches for money so in a way you could say money grows on trees indirectly.

Janine found herself repeating the thought “money grows on trees” for the rest of that day, and that night she had a dream that she was at the Farmer’s market haggling over the price of some strawberries, insisting the price was way too high and that it was becoming increasingly impossible for people to eat healthily because the price for fresh fruits and vegetables was ridiculously expensive. By the time she woke up the next morning she had decided that she was going to grow fruits and vegetables and sell them for more reasonable prices than they were being sold in the grocery stores and at the local market.

She started small with tomatoes, bell peppers, squash, okra, Cantaloupe and eggplant. She read lots of books and followed expert advice and from her first crop she started making money. She’s now also growing grapes, cherries, plums, nectaries, pumpkins, potatoes, spinach, watermelon, zucchini and cucumbers to name a few and for the last few years has made at least $30,000 in profit from sale of her goods.

So, while money indeed doesn’t literally grow on trees, like Janine’s son pointed out, indirectly money does grow on trees. Maybe you can figure out a way to plant a seed and have it indirectly grow into the millions you desire or at least some extra yearly income.

In my youth there was a game we used to play where an appointed person would go around a circle of people, and pointing from person to person, would say to the first person, “Rich man”, then to the next person, “poor man,” then to the next person, “beggar man”, then to the next person, “thief”, repeating this until each person in the group had been identified as having a future as a rich man, a future as a poor man, a future as s beggar or a future as a thief. I remember always feeling panicked at the thought that I when the appointed person reached me he would be on any of poor man, beggar man or thief. It was just a silly game but I’m not sure I quite fully understood that my financial future could not be determined by being lucky to be next in line for when the appointed person reached “rich man’, or my bad luck to be in the position of having to choose between becoming a poor man, a beggar or a thief. If memory serves correctly on the rare occasions that I would join in playing this game which I tended to avoid playing out of fear that I would not be classed a rich man, I used to reason that if I couln’t be a rich man I’d rather accept the fate of a poor man than accept the fate of a beggar or a thief. But somehow, I was always lucky to end up being appointed a rich man.

What is interesting is that we played these games as children and fantasized about having lots of money when we grew up, but it never occurred to us that we wouldn’t be able to just walk out of poverty and into wealth like turning off one street and onto another. We never realized that it would take more than “intending” not to be poor, not to become a beggar and not to become a thief when we grew up, to achieve the status of “rich man”, so we didn’t go off planning how we were going to become rich because we figured everything would just automatically fall into place once we grew up.

Maybe everything falls into place automatically when you’re born into wealth; but when you’re born poor, you more often than not stay poor until you come to the realization that poverty doesn’t just up and go away one day. You actually need a plan of action for eradicating poverty and achieving wealth. And sometimes even after you make that realization, you’ve been so programmed according to the mentality of poverty that it becomes nearly impossible to believe you can change your financial situation. You’ve become convinced that there’s something about you that predestines you to a life of having nothing and you allow this mindset to sabotage your chances of achieving financial success whether consciously or subconsciously because you believe money is for other people, special people; and for people like you, people who come from nothing, financial freedom is an unattainable goal and a silly dream that will never become reality.