TJL #3: Money is not wealth
Hi friends,
Welcome back to Today Jan Learned (TJL) #3. In this newsletter I share a new lesson every day, so stay tuned. Today Jan Learned that money is not wealth.
Fine. I’ll admit it. I’m a huge Paul Graham (PG) fanboy. I love his work. I love his attitude. I have trouble listening to him talk (he has a lot of “uhmmmmms”) but I can read his essays for hours and have devoured most of them.
That being said, my favourite essay is called How To Make Wealth. In this essay PG explains how to create wealth and how it is distinct from money.
But first, why wealth?
Why wealth?
Truth be told, I’m kind of scared of writing this and putting it out there. It feels extremely weird to write about wealth. Like there is some invisible force telling me not to write about wealth.
It’s not real secret that most of us would really like to be wealthy. Why? Because being wealthy solves a lot of problems. We would have to do less of the stuff we don’t want to do, and can do more of the stuff that we do want to do. Simple. It’s kind of like freedom.
I mean, I’ll just get it out there: I’d love to be wealthy. Hopefully by studying this essay, I might figure out how to create some of it.
Money is not wealth
I digress. Back to the main point. Money is not wealth.
Fine. If money is not wealth, what is?
“Wealth is the fundamental thing. Wealth is stuff we want: food, clothes, houses, cars, gadgets, travel to interesting places, and so on. You can have wealth without having money.”
Repeat with me: wealth is the fundamental thing, wealth is the stuff we want. Wealth is the fundamental thing, wealth is the stuff we want.
This is illustrated with a simple thought experiment, which shows that money is useless when you have unlimited wealth, and how you can have no wealth with unlimited money.
“If you had a magic machine that could on command make you a car or cook you dinner or do your laundry, or do anything else you wanted, you wouldn't need money. Whereas if you were in the middle of Antarctica, where there is nothing to buy, it wouldn't matter how much money you had.”
With that magic machine you could be the wealthiest man on earth without any money. At the same time, when you are naked in the middle of Antarctica no amount of money is going to save you.
If what we want is wealth, why do we keep talking about making more money? PG explains that money is a shorthand for wealth. Money is our way of transferring wealth, which makes it interchangeable with wealth most of the times.
It is a kind of shorthand: money is a way of moving wealth, and in practice they are usually interchangeable. But they are not the same thing, and unless you plan to get rich by counterfeiting, talking about making money can make it harder to understand how to make money.
That’s why we keep talking about money, when we should be discussing wealth. Unless we plan to get rich by counterfeiting (literally creating money), our best way of getting rich is by creating more wealth.
Now what?
I challenge you to think in terms of wealth, instead of money. Think for yourself. What is the stuff you want. Is it really money? Or is it the stuff that money can buy (wealth)?
Anyway, that’s it! Today Jan Learned that money is not wealth.
Thank you for much for reading. See you next time!
Read my previous TJLs here: