Exactly what is money?

by: Daniel P. Matthews

'How much money do you have?' is a frequently asked question. The answer, more often than not, is about the amount of cash you have in your wallet, purse or pocket. People seem to use the words cash and money interchangeably. But, there is a difference between cash and money and that difference is important in the way we think about our financial independence.

Cash is dollars and cents. You carry cash with you and use it to buy all sorts of goods and services. Unfortunately, when you think in terms of cash instead of money you lessen your focus on the real measure of your personal wealth - your money.

Money is equity in your home. Money is in your checking account. Money is found in your stocks and bonds. There might be money (even cash) in your automobile, in a painting you own, your jewelry, furniture, and on and on. And, yes, money also includes the cash you have in your purse, pocket, and even under the cushions of your couch.

When you count up all your money, instead of just your cash, you might be pleasantly surprised at the real answer to the question 'How much money do you have?'

In efforts to achieve financial independence, money is your concern. Your money should be working for you. It should be growing. After all, cash just collects lint in your pocket! But, money grows and grows and grows!