When you learn the language of money, you learn the language of the 10 percent of the world that does not have to worry about money. If you want to be rich, you must learn how to speak about money the way the rich do. The same holds true for learning the language of money. I could not have succeeded as a pilot if I did not know these words. When I shifted to helicopters, I used different words such as cyclic, collective, and rotors. I soon spoke words such as altimeter, aileron, and rudder. When I went to flight school, I had to learn the language of a pilot. When a student goes to medical school, she learns the language of medicine and is soon speaking of diastolic pressure versus systolic pressure. To use money like the rich, you have to know the language of money If you want to read about the formula in detail, and see an example of it in practice, read my post, “ Velocity of Money: The Secret to How the Rich Get Richer and the Poor Get Poorer". I’ve shared the formula for using money to get rich, the formula for velocity of money, in another post, but I’ll share it here as well: This is the velocity of money, and it is the reason why some people are rich and most others are poor. Additionally, they invest their money in assets that produce more money in the form of cash flow, which they can use to invest in more assets. The rich understand this, so they always keep their money moving into things with tangible value: assets. This is partially because governments can print as much as they want since it is tied to nothing of is just paper. Here’s an example of what happens to money-currency-over time.Īs you can see, the value of fake money always goes to zero relative to real money. Like a current, today money must keep moving in order to survive. The word currency derives from the word current. It was only based on the “full faith and credit” of the US.a giant IOU. This is because in 1971 President Nixon took the US dollar off the gold standard. It is a representation of the faith economies have in a country’s economy rather than something of value like gold. If you want to be rich, you have to understand how money as it is called today works. But if you’ve read much of my writing, you know that savers are losers. This is why so many people think that it is financially smart to save money. They believe that money such as dollars are actually of value. Unfortunately, most people do not understand this. It’s just that today’s money, which is really currency, has no intrinsic value in and of itself, unlike gold or silver, which has value and has always had value. Today, what most people call money I would call “ fake money”. It is difficult to understand something we can no longer see, touch, or feel. This evolution of money from a tangible object into an idea is one reason why the subject of money is so confusing. The more trustworthy the country, the more valuable the money, and vice versa. Today, modern money is simply an idea backed by the faith and trust of a government. Today, money is no longer a tangible object like chickens, gold, or silver. In the past, the dollar was a derivative of gold now it is a derivative of debt, an IOU from taxpayers of a country. It is simply a derivative of the value of something else. Paper money is worthless in and of itself. Today, most money is paper money, an IOU from a government, also known as a fiat currency. They were physical objects that were deemed to have tangible value, and thus were traded for other items of a similar value. “Money” was originally in the form of barter, such as chickens or milk, then shells and beads, then gold, silver, and copper coins. The first thing you must understand when you ask the questions, “What is money?”, is that money has evolved over time. And that is one of the reasons why they never get rich. Unfortunately, many people think that they know these things, but in reality they don’t. have a lot of money, then it would follow that you need to know what money is and how money works. New Rule of Money #6: Learn the Language of Money
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