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Money Doesn't Matter as Much as You Think

I am a professional teacher, writer, researcher, and learner. I always try to learn because there is no age for learning.


Money matters. It helps us afford the necessities of life, like food and shelter, and can help us attain the luxuries of life, like vacations to foreign countries and the latest gadgets. But despite how much money matters to our everyday lives, its importance can often be overstated and misunderstood. We’re told that money isn’t everything, but that it can buy happiness; we’re told that rich people are happier than poor people, but research shows this isn’t always true; we’re told that having extra cash will make you richer, but only if you spend it right.

US Dollars

It's not About Being Rich

Money won’t make you happy, but lack of money is sure to make you miserable. Psychologists have been studying money and happiness for years, and they’ve consistently found that once a person has enough money to cover basic expenses—food, clothing, and shelter—more cash doesn’t correlate with greater happiness. $75,000 per year was shown to be about as much as an American needs to bring them maximum life satisfaction (as defined by Nobel Prize-winning economist Daniel Kahneman). More than that brings more luxury but not more joy. Other research suggests that after a salary surpasses $120,000 in America or £70,000 in Britain, further increases decrease people’s well-being because they come at too high a personal cost in terms of time or stress. When we asked our friends on Facebook what their goals were related to wealth, we heard back things like buying a house within 3 years, provide providing education, and becoming. Some wanted to retire early and some wanted to travel; others just wanted financial peace of mind. But none said they wanted to become millionaires because it would increase their happiness level above where it already was.

Man Handed Money to Woman

Every Problem Can Be Solved

This isn’t true. Every problem has a solution, sure, but some problems don’t have good solutions or any solutions at all. This can be frustrating, but if you give up every time you run into an unsolvable problem your life will be extremely frustrating. It’s okay to recognize when a problem is unsolvable and move on to other things. The secret is learning how to tell which problems are solvable and which aren’t. Eventually, you’ll learn how to identify problems that do have good solutions so you can go ahead and work on those problems instead of wasting your time fretting over them. So if someone tells you money doesn’t matter much—don’t take their word for it. Instead, figure out for yourself whether money does matter or not, because only then will you know what works best for you. Not everyone wants more money in their lives—but we should all strive to improve our understanding of our relationship with money (and all of our relationships). Nobody else can solve these kinds of personal questions for us—we have to do it ourselves.

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The World Runs on Debt

There is a reason why no one makes their purchases in cash anymore. If you wanted to buy something with cash, you would need to go get it from your bank or work out some kind of deal with someone else who has money. Money is merely an agreement to exchange value for value; if everyone agrees that $1 has worth, then $1 does have worth. However, what we are using now isn’t actual money—it’s debt and our system relies on it. The U.S dollar used to be backed by silver and gold but people began trading paper notes instead of coins so they wouldn’t have to carry heavy sacks of gold around to buy things. By putting all of these notes together into a special ledger (called Federal Reserve Notes), people could still use them to pay off loans (hence Federal Reserve). In essence, those pieces of paper were essentially worthless but because many people agreed that they had value and kept buying them, they came to hold a lot of worth. Our economy operates in much the same way: just like those pieces of paper can be used as money (though not very well) if enough other people agree it is money, so too can pieces of metal or clothing serve as money depending on how much other people agree they are valuable (gold/silver/cattle). Our current money supply however is entirely digital.

There are Only 5 Categories you Need to Know

Make, Spend, Invest, Save and Donate. Learning how to manage these five things properly is all you need to do for your money. If there’s a sixth category of knowledge you need about your money, it’s how to find good financial advisors and use them wisely. There are many examples of large groups that have made poor financial decisions because they simply don’t have advisors they trust who can help them make better decisions. Poor financial decision-making has destroyed small countries and large companies alike because their leadership wasn’t knowledgeable enough to know they were making poor choices. It’s essential to learn when someone else knows more than you do about managing your money—and if necessary, learn which professionals will work best for you in specific situations. But generally speaking, it’s wise to avoid giving most people total control over your financial well-being so you keep from being bitten by common mistakes people make when managing money. Here are two keys areas where most people go wrong:1) People tend to think more (or less) about saving based on how much extra income they have rather than how much extra income they earn per month or year; 2) They think about investing differently at different stages of life—which leads them toward certain behaviors appropriate at certain times but not others.

Man Getting Dollars

Rich isn't What you Think It is

Wealth is relative. If your family was surviving on $30,000 per year and you were given a raise to $35,000, would you consider yourself rich? The answer is probably no. That’s because your perception of wealth is relative. People are happy when they have what they need to live well and feel secure in their financial future. When it comes to our own money—even after an enormous raise—we focus on what we don’t have rather than on what we do have. As long as our basic needs are met, there will always be a new luxury item or experience that feels like it’s out of reach... so we keep spending to chase something that might not even be real in the first place!

Financial Ignorance Leads to Financial Failure

One survey found that 40% of workers have $0 saved for retirement. Have no money saved at all? That’s a terrible start to financial success, but it’s fairly common. People often don’t take saving seriously until they get a job and suddenly see their net worth rise from $0 to $10,000 or more in just a few years. For many people, seeing such big numbers is what gets them interested in personal finance and creates a desire to learn more about how to manage their money wisely. But some people never have that life-changing moment. They remain financially illiterate forever, living paycheck to paycheck with little chance of achieving long-term financial goals. And according to one study, only around half of Americans are familiar with even basic financial terms like compound interest or annual percentage rate (APR). Without the proper knowledge, you can easily make mistakes that cost you thousands—or hundreds of thousands—of dollars over your lifetime. Nowadays you need a college degree to get a decent job—and getting an education usually means taking on student loans with insane amounts of interest attached. If you become an adult without understanding how credit works and fail to establish good credit history in your youth, you could find yourself dealing with problematic debt issues for decades before ever finding any solution.

This content is accurate and true to the best of the author’s knowledge and is not meant to substitute for formal and individualized advice from a qualified professional.

© 2022 Ghulam Nabi Memon

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