Which is Better: Money or Things?

Today's posting is not directly addressed in The Secret, but does discuss a matter that prevents many from living their dreams.

One of my favorite financial authors is Dennis R. Deaton. The book "Money: An Owners Manual" is a must read for anyone who wants to know how money works in their lives. I wish to talk about one statement made in this book that I have not seen made *anywhere* else, but which was truly profound for me.

"It is better to have money than any of the things that you can buy with money". There is a corollary as well which states "all ownership is a form of bondage". Amazing!

Now this does not mean you should not own a house, or a car, or a mattress to sleep on, but it does shed some light on the biggest money problem that most people who have money problems have, and that is the fact that more money goes out in a month than comes in. The problem in America (for most people) is not that they do not make enough money, but rather that they spend too much. And what do they spend it on?

The moment one exchanges money for anything, they are in a loosing deal. The "thing" that they have purchased loses some percentage of its value the minute they leave the store with it. Sure they could return it to the store perhaps, but that would require an investment of their most important asset, which is their time. They certainly could not resell the item to someone else for anything near what they paid for it.

In addition, the item they have bought must be maintained, may break, may cause other kinds of problems. It will take up additional amounts of their time. I do not wish to specifically pick on boat owners, but a boat is a great example of this. The moment it is bought it loses a lot of value. It must be stored somewhere as it takes up a lot of room. They have to put gas in it and maintain it almost like it was another car. They have to have insurance on it.

It reduces their future freedom in planning family outings because, since one has spent so much money on the boat, they now feel obligated to use it at every opportunity to "get their money's worth". But they say "I like boating and one need a boat to go boating!". I say: Rent One. This preserves all ones freedom, does not tie one to anything, and allows one to still go boating when they want to with no strings attached. Would that not be better?

I love Robert Kiyosaki's books, starting with Rich Dad Poor Dad. Robert clearly defines what the difference is between the wealthy, the poor and the middle class.

The wealthy are the only group that knows how to spend their money for something that increases in value, a true asset. Assets that increase in value more per annum than what one could get in a CD or a Money Market Mutual Fund are better to have than money, and are the *only* exception to the first statement about having money being better.

The poor do not make enough to cover their basic needs, and thus do not have the money to buy themselves into a lot of bondage.

The middle class buys big liabilities, like boats, and calls them assets. It just comes from not understanding what an asset is. Most middle class families have the income to be wealthy, its just that they do not buy assets with their extra funds, and as long as they continue to do that they will always be middle class.

Take this idea with you the next time you go somwhere to spend money: It is better to have money than any of the things that you can buy with money!

Money = Freedom
Things = Bondage

Learn

Joseph