Life Without Money – The Roles of Money


 

The last post seemed to have opened the Pandora box! Life without money!? Are you out of your mind? Nobody actually said that, but I could read it between the lines.

Yes, life without money, why not? Things, by their very nature, are replaceable. People, on the other hand, are not. The social/emotional crises that sweeps across most Western societies has something to do with this simple fact. Most businesses “cling” to things and let go of people. An employee is referred to in the “books” as a “cost center”, while a desk is an “asset”! Wow! How had we come down to this? No wonder our economies are “soft” nowadays.

Well, maybe I got a bit emotional there. I’m not suggesting that we throw money out of the window overnight, then fall into an even bigger disaster.

Changes of such magnitude take decades, if not centuries. But everything starts with a single idea. If any of you lived to see that happened, please remember yours truly!

Then how would we approach this idea? How would we explore it? I suggest we start by understanding the role of money in our lives.

It is easy to realize that money plays multiple roles, all important. Let’s start with the obvious one: An instrument to facilitate the exchange of benefits and value among people. What does that mean? A company needs the right expertise to build specific products. A group of Engineers have that expertise. There is a potential for benefit exchange and creation of value here, but what is the facilitator? Yes, money. You know the rest of the typical story: As the engineers create the desired value, they receive the benefit in the form of money.

What else? A discriminator. Imagine the price of a first class ticket from Vancouver to Auckland was the same as the price of an economy class ticket; who would travel economy? The carrier would run into a multitude of problems. Money, right now, is the only instrument to “discriminate” among passengers, forcing them to choose what fits their budgets.

And? A controller. In a business joint venture, the party that invests 51% or more has the final word in any dispute. Even in families. In some cultures, after high school, the boy or the girl has to go into the major that her or his father (or mother) chooses, simply because the latter is going to fund the expenses.

Finally, an organizer. Let’s take traffic as an example. When you exceed the speed limit, you run a chance of getting a ticket, in other words, pay money. Consequently, you adhere to traffic laws, and we end up with an organized, smooth flow of vehicles across the city, and over the highways.

We covered the role of a motivator in the previous article, despite the fact that money is not very good at that role. It performs it rather forcefully and negatively!

I guess that should be enough for now. Will carry on in the next post to see what would be an alternative that could satisfy all the above roles and more. Or maybe shift the whole paradigm, and spread the discussion to other fields such as sociology, psychology, policy, etc…This sounds complex, but let’s take it one step at a time.

In the meantime, let’s keep making and growing wealth, the usual way 🙂

The Wealth Maker

The Wealth Algorithm (9) – Conclusion


 

So far, we’ve covered two out of the four steps mentioned in article (6) of this series. Namely, the business plan and funding options and processes.

One quick note about the funding options presented in the last article. Most of those organizations are based in the US. They offer their “services” to US citizens or US permanent residents only. Before you start working with an online funding entity, please make sure it supports your country. The concept is fairly new. It might not be available everywhere. It’s starting to emerge in Canada as we speak, but it’s more established in the US so far.

Assuming you’ve found the right source of funding for your venture, and prepared your business plan, now you need to work with the funding institution to present the business plan and obtain the funds.

If you went the route of online funding, most of the work would be electronic: Emails, completing online forms and applications, and probably by the end, some phone conversations. Be prepared to answer a wide range of questions, including personal questions. To some extent, this process may be more demanding than job search.

As long as you clearly know what you want (your intention), and how to achieve it (your business plan), you’ve already covered more than half of the distance!

Keep in mind that funding organizations are business-oriented. They want to make sure that by investing in your idea and your plan, both parties would create a profitable business. This insight needs to be clear throughout your presentations. You are not asking for loans or charity. You are a business partner, who is ready to use the offered capital to generate a positive outcome for both parties.

Once a verbal agreement is reached, the details must be documented in an Investment Partnership (TM) Agreement (IPA). The IPA would become the “constitution” of the project. It specifies the objectives, the parties involved, the timelines, rights and responsibilities, the way profit and/or loss are shared, and so on.

Carefully read the agreement in full, and check if you agree on all its provisions, before you make any commitment. If something is ambiguous, or contrary to your original understanding, never hesitate to voice your concern, till you and the funding party reach a mutually agreed-upon formula. This is your right as a business partner..

Next, as you start receiving the funds, you begin executing your business and action plans, day in and day out, till you attain your clearly set intention, and successfully satisfy the terms of the IPA.

I’m not promising you that the road will be rosy all the way. There would be some challenges. Use your capacity and wisdom to convert those challenges into new opportunities. This is easier said than done. Deal with them, one by one, as, and if, they come.

All the best,

The Wealth Maker