Nobody ever really taught me what the purpose of money is.
If you look at the world, it seems like the purpose of money is to buy things. There are a ton of products on shelves that can be very easily had.
But this sort of spending is dumb--simply buying things with money until you don't have anymore is a truly stupid way to live. The problem is that most spending is masqueraded as something necessary or otherwise very obviously desirable. Since the basis of capitalism[1] is the transfer of value, you're buying goods and services that have value to you. Spending, then, isn't just stupid. There's another layer.
Once purchased, most goods and services get used and disappear. The money goes along with them. But there's a class of goods that don't disappear, instead they appreciate in value. These are the sorts of things people call investments; the upfront purchase will yield more value and therefore the potential for more money in the future.
So a new purpose for money seems to emerge: to earn. Invested in the performance of the stock market, for example, assets purchased can gain value very quickly. The result is that money is no longer a quick get-what-you-want-now sort of tool, it becomes a tool that works with time to produce more money.
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I'm very early in my adult life--I got my first real salaried job this year. It was never made clear that there are viable ways of using money beyond just spending it because you have it. Having done a bit of reading into the basic principles of this sort of approach to money[2], I feel much more confident going forward. I just wish it was something that was taught--that investing isn't some very complicated thing that only rich dudes do, but rather is a kind of tool to transform a little money into more money over time.
Last updated Thu Dec 23 2021 in San Anselmo, CA