Money - vs - Capital
Money - vs - Capital (what's the difference?)
MONEY
Money or cash itself cannot generate any returns until such money is deposited or put into the bank and it does not help in creating wealth.
Capital is used in running and expanding a business/enterprise/self employed company which then creates wealth for the owners of the company/enterprise/self employed firm.
Money is merely currency used to purchase items from other people who have made or are selling an item which is wanted by someone else - be it an orange or a telly or seat to sit on.
Money is thus currency - whilst it sits in your pocket as a note or a coin it is of use to no-one, even if you have a pile of it in a drawer occupying $1 million of cupboard space, it is dead money until it is used or exchanged for something else be that an orange, a telly, some heat, the internet, a bottle of wine, a gallon of fuel for the car, clothes, paint and every other thing on the planet which is BOUGHT AND SOLD.
When you spend that money whether it be on food or a capital item such as a desk for your work or anything else, it's use to you - at that moment of exchange, ceases to be, It is, quite literally spent.
Don't feel bad about this, it's what money is for - you don't have to give it a funeral because it is now doing the job you worked for to get it, for someone else and you have the fruit of your labour in front of you (minus taxation of course - that's another section....)
Money, for most people, is paid in exchange for work or the provision of a service and is used to live (i.e. to buy food rather than steal it - to heat ones home instead of going out and cutting down a tree or two yourself, to pay for your home however big or small, etc etc - things which enable us to LIVE)
One small note regarding money - v - currency. Whilst they are intrinsically the same for almost everything, currency cannot be a store of value - explained in another part of this series.
Written by Hilary - 14th September 2018 - not intended to be entirely accurate but more of a map of money and finance. Written with love and good intention. Next CAPITAL