Money vs. Wealth

Do you consciously know the difference?

There’s a quote that has been reproduced in so many places that I can no longer trace its source – “The real measure of your wealth is what’s left after you’ve lost all your money.”

Wealth has been around since the beginning of time, even before money was invented. Wealth is the stuff you need to survive and live happily. It represents the food and water you need to sustain yourself, the shelter over your head to protect yourself, the clothes to keep you warm, the vehicles that gives you the freedom of mobility, and the things that afford you the joy of leisure. It also extends to many intangibles: basic human rights and freedom, laughter and friendship, meaningful relationships, good health, and constructive thoughts. I thought I’d just do a check on dictionary.com -

Money, on the other hand, is a relatively recent invention, and came about with specialization such that people needed to trade their wealth (and barter couldn’t provide an adequate means). Money exists as a means of moving wealth around. It’s simply the universal agreed upon item that people barter with. But so many people confuse the two.

Here’s the current definition of wealth -

It’s fascinating how lexicographers keep track of our changing word definitions to reflect the passage of our social evolution. But isn’t it tragic that it has come to this? I do agree that one gets you the other, but it is not the same thing. And it is important to be aware of the difference. What we all really want is wealth, but what we often chase is money, at the expense of wealth. We work late, sacrifice family time, eat instant food, bully and stress our bodies, and then chase even more money for insurance, health care and other contingencies. It never ever ends, the insanity.

The Good News

The good news is that unlike money, whose quantity is controlled by the government, wealth can be created by any single individual (and destroyed too). It’s not a fixed pie. If you grow your chillies in your backyard, if you reuse the back of your notepaper, if you fix your old bicycle, the world is chillies, papers and a bicycles richer that it would have otherwise been! By creating wealth that you need, you then need less money, and might even receive some more money in return for the wealth you produce.

It’s why I love startups and innovation. At the center of any startup is a wealth-creation nucleus, where the confluence and gathering of ideas and resources result in something so much larger than the sum of its parts.

That is also the reason why I respect the work of programmers and engineers so much, because they are the ones at the heart of startups creating wealth and value simply by knowing how to get machines to work the way they want them to. At least in this country, too few programmers are realizing their worth. So much wasted opportunities. I was actually told at a young age that the best thing I could do pursuing computer science, was to become a technician. I actually believed them and can now only laugh at the folly of my thinking.

To understand the big picture and know what you’re chasing, then only will you gain clarity and courage.