What is Money Really?

Derek Notman |
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Money, money, money. Frank A. Clark said; "Many folks think they aren't good at earning money when what they don't know is how to use it."

You can't live in the modern world without money, it is arguably imperative for survival. It buys you comfort and security and quite possibly is the strongest tool ever created by humans.

Most of us would love to be driving a brand-new car, to be living in a fully paid for home and to be able to travel the world on a whim. The reality is, acquiring enough money to be able to do whatever you like, when and where you want is a challenge for most people.

Why is it, in the free world, The United States of America, with the opportunities and infrastructure that we have, that so few of us live a life of financial independence?

So how do you stop thinking about money as a means for survival but rather a powerful tool for achieving financial independence? To do this, we need first to understand how to manage it.

Learn to control money, don't let it control you

The desire of money simply for moneys sake can truly corrupt, it can have a profoundly negative effect on our decisions. Think about the damaging factors that money has in the hands of someone who wishes to do bad or just be irresponsible.  Things like greed and control can be exponentially made worse by using money.

Why does it have this effect on us? Survival and comfort. No one wants just merely to survive – everyone wants to live in comfort. You know, when you see a friend's social media updates of them on holiday in a foreign country or driving a flashy new car. Whether we admit it or not, we all feel envy from time to time. Yet, that doesn't necessarily symbolize financial freedom now, does it? Those cars or exotic holidays could very well have been purchased through credit.

Wikipedia defines financial freedom as the following:

"Financial independence is the status of having enough income to pay one's living expenses for the rest of one's life without having to be employed or dependent on others."

But we don't necessarily believe that. What are the chances that you will make enough money by say thirty-five, forty years old to be able never to work again? At Love Your Finances, we believe that financial freedom is about making your money work for you. Some people love to work; their careers are their passion, or their purpose if you will.

Financial freedom is living your passion and being financially secure at the same time.

Envision and plan

Woman speading arms at sunset

You need to be realistic enough so that you can set yourself short, medium and long-term goals. These can be incorporated into a vision that you have built for yourself. This vision, goal, dream, however you refer to it can be achieved, so long as you stick to a written financial plan.

For many, "financial freedom" is merely being able to maintain a comfortable lifestyle, to secure a comfortable retirement. Not everybody wants to lounge around on a yacht in the Mediterranean, drinking mojitos all day forever, etc. although these would be hard to turn down!

Building a financial plan

2 people sitting at laptop working on finances

Building a financial plan is your direct route to financial security. When you build a detailed financial plan, you are essentially creating a strategy to help you make well-informed, calculated financial decisions in all areas of your life. By sticking to it, you set yourself up for the possibility of achieving life goals and sustained financial security. 

So how do you create a financial plan that is suited to you? By working with an online financial planner. A good financial planner is best equipped to help you crystalize your hopes, dreams, and goals and then advise you on how to make your income work for you, and how to build wealth with the resources you have.

For example they will help with things like investment management and life insurance – in a way that is comprehensive and driven by your written financial plan.

virtual financial planner will take your objectives, risk profile, and tax status of your accounts and design a financial and investment plan for you.

As we've pointed out before, a steady income (one that buys you comfort) requires a smart combination of your current income and future growth while minimizing your risk and taxes.

So, rather than asking yourself "what is money?", ask yourself, "how can I make my money work for me?".

I hope you have enjoyed this post.

Here’s to financial freedom ?

Derek