Money vs Wealth
To many of the readers the title may look wrong as they have grown up believing a wealthy person to be one who has lots of money. Of course in modern economies, people having more currency notes are said to own more money and thus more wealthy. In fact, it has become common to use the two words interchangeably that has led to a situation that differentiating between money and wealth has become all the more difficult. Not knowing the differences between money and wealth has led to a situation where people are unhappy and dissatisfied with their lives. This article attempts to shed light on the issue to enable people to appreciate the real differences between the two concepts.
Money
Money is a medium to buy or sell things and has been developed as a concept, to make life easier for people. It was the introduction of currency that allowed societies to move away from the old barter system and also give up on hoarding of gold which was the most valuable item until money arrived on the scene. If money is a medium for exchange, why do we see people working hard to earn more money than they would ever need? Money is a concept that is in our minds as it remains in the form of numbers in bank computers these days. People have started to make use of plastic money in the form of credit cards and swap these cards to borrow and pay money.
According to one definition, money is an idea backed by confidence. If you have a 500 million dollar note of Zimbabwe and take it to buy something at the grocery store, the salesman would laugh at you. Why, because this currency has no value and does not instill any confidence in the owner. The confidence that people have in a US $100 bill is what makes it so attractive and desirable.
Wealth
Money or paper currency is just a specific type of wealth and there are many more things that make people wealthy. If you think that a man is wealthy because he moves in a chauffer driven Mercedes, wears designer clothes and glasses, and spends money lavishly on consumables and property, you are mistaken. Money is just a part of his wealth. There is a famous quotation by Roger James Hamilton, the creator of Wealth Dynamics that says that wealth is what is left when a man has lost all his money. We are all aware of the famous saying that says nothing is lost when money is lost; something is lost when health is lost, and everything is lost when character is lost. Wiser men have always kept wealth as something that cannot be counted in terms of paper currency.
Lottery winners are best examples of people with a lot of money but little wealth. It has been found that more than half of lottery winners in the country are in a worse situation within 2 years of winning a lottery as they become rich with lots of money but are not wealthy.
However, all said and done, wealth is what attracts money and we see wealthy people generating loads of money. Money follows wealth, and it is thus better to think of ways to create wealth and not money.
What is the difference between Money and Wealth?
• Money is a medium of exchange, a thing for trade
• Wealth is tangible while money is intangible
• Wealth is permanent while money is temporary
• Wealth is desirable while money is considered as the root of all evil
• Wealth remains intact if a person loses all this money
• Abundance of valuables is regarded as wealth while money is just a part of it