The Essence of Making Money
What does it mean to make money? People often talk about making money, but what does it actually mean? Answering this question is important to give us a strong foundation to build upon. We need to know the essence of making money before talking about its specific aspects and methods.
Steve Pavlina has a good take on this topic in his book Personal Development for Smart People. This is what he says about what money is:
Money is essentially social credit. It’s an IOU from society, enabling you to extract a certain amount of social value whenever you spend it. The more money you have, the more society owes you, and the more value you can extract.
This is a good explanation. But how do we earn money? Again, from Steve Pavlina:
The money you earn is society’s way of saying: “In exchange for your valued contribution, you are hereby granted the right to extract equivalent value from society at a time of your choosing.”
So, if you want to make money, you must make contribution to the society. The more valuable your contribution is, the more money you will make.
Of course, people can make money without contributing to the society. For example, people can steal someone else’s money. Or they can cheat the systems. But, because they extract value from the society without contributing, the society will be against them. They won’t be able to make money for long that way. The only sustainable way to make money is by providing value.
There is one important thing to remember: the one who determines the value of your contribution is the society and not you. You may say that you’ve contributed something very valuable but the society may have a different opinion and the society is always right. So you need to know what the market wants.
And one more thing, you can’t fulfill everything that the market wants. Your capacity to provide solution is limited. You need to find the intersection between what you can provide and what the society wants. The bigger the intersection is, the more opportunities you have to make money.