Paper Money Can Make or Break YOU.

It Can Either Work FOR you or Work Against You.

One morning a few days ago, my wife was disappointed to see the outer sole of her shoes stripped off again just a day after she fixed it with rubber cement. As I take look at it later, I found out that the way she applied the rubber cement was improper – the surface was not cleaned well before applying and she did not allow to let it dry first before gluing the surface together. That was why the optimum and desired result of the fix was not attained, although rubber cement has been known and tested to be an efficient rubber adhesive.

Well, a lot of things around that if used properly will make our life easier and better or even saves us energy and resources. However, no matter how effective and usable a thing would be if it is used improperly and messed up with it, that “useful” thing may cause us trouble or problem which may lead to disappointment, stress and dismay. The same is true with our “Paper Money” – the “money” we perceived to have value – This is a Fiat Currency that has been invented for a purpose.

• As an effective medium of exchange of goods and services because it is convenient, that is Easily Divisible (You can change larger bills to smaller bills or to coins). It is very Portable (You can carry it in your pocket or write a checque on it) as well as It is Interchangeable or Fungible (The 100 peso bill in your pocket has the same perceived value of the 100 peso bill in my pocket).

• As an efficient instrument to make profit and gains through charges, interests and fees easily. Simply put, suppose you are still in the era where actual gold and silver is the medium of exchange for the goods and services. Then, you have a thousand ounces of actual gold deposited in your bank that has a guaranteed return of 10 ounces a year (same as with 1% interest per year on today CDs) and redeemable anytime you need it. Imagine how the banks could possibly loan it to their client and charge interest on it if you as their depositor, has the right to look and check the existence of your actual gold in their vaults anytime? Thanks to this currency or our “Paper Money” which they can print anytime should they need more of it in meeting their credit requirements & obligations and promises. Originally, this “Paper Money” or Fiat Currency was actually a deposit certificate of the actual gold or silver deposited in their vaults, but now became a plain paper with numbers on it, backed by nothing except as a legal tender guaranteed by the government.
  

Notice that nowadays life gets easier and safer at the issue of bringing your money with you. Unlike before, people must be bringing their actual gold or silver with them in their bags or pouches. Clearly, all of us have fully benefited the 1st major feature of a currency. Unfortunately, very few have enjoyed the 2nd benefit of it – very few have enjoyed the profit on interest, fees & charges, dividends, etc.… that can be earned by anybody out of this system. The vast majority of the people around the world is paying for it. Sir Albert Einstein once said, “… Interest is the eighth wonder of the world, he who understands it – earns it and he who does not, pays for it”.   It’s just sad to note that the same people have no idea how they have been ripped off by the system and took their true wealth, their time and their freedom out from them. One of the trickiest means how we have been ripped off is by way of “Inflation”. Anyway, there is another feature of a currency that enhances purpose #2 and that is, it can be inflated. The government and the bankers have been collaborating how much amount they should inflate to their nation’s currency year-by-year that they may be able to increase their revenues & profits as long as the people cannot feel the hurt of its side effects. This has always been the playbook of every government on the planet, they keep doing this all throughout from the beginning – even Philippines to the tune of 3% to 6% a year on the average. The worst was in October of 1984 which was a staggering 62.80%, i.e. Philippine Peso had lost her purchasing power by 62.8% in that particular month.

Now, so what? This is simply meant reduction of buying power of the paper money in your pocket and your anticipated salary for the next 15 and 30th day of every month. Plus, the imminent increase of prices of the goods and services as the inevitable side effect of the dose. This also means that any investments and savings you have that earns less than 4% a year has a guarantee of loosing. Fact is, every penny that will be taken out from the purchasing power of the “Paper Money” in your hands will rob your time, costs you more effort and will take out portion of your freedom in order to maintain your current way of living and lifestyle. This is no wonder that a lot of people nowadays would say “Pahirap na nang pahirap ang buhay ngayon. Di na pe-pwedeng iisa lang ang mag ta-trabaho”.

Life gets harder and harder because they allow the system to consume them and they don’t care enough in digging deeper about how this system works. All of us are being set up in a game where the chances of winning are only for those who understand this Ponzi scheme, how it works, equipped with the right & truthful information, have awareness, discipline and determination as well as to those who seriously spend time to acquire Financial Education.

The paper money on your hands, as well as the one in my hands has the power to make or break us financially – depending on how we use it. Are you using it the way they want you to do so that they can reap their anticipated rewards on you being their milking cow and sheep in their slaughters? Or are you using it the other way around, to you and to your family’s financial advantage?

Jesus Christ teaches us to know the truth and the truth shall set us free. I believe that this principle doesn’t only apply to the Spiritual aspects of our life but as well as in secular aspects. He also teaches us to be wise. Clearly, ignorance and foolishness cost a lot – if you play ignorance and foolishness in your personal finances, certainly you will trade it with your TIME, EFFORT & FREEDOM.

Having a financial strategy that is built and founded on a sound economic principle, a strategy that you are the one who is in control – not the government or the banks, a strategy that is protected, and independent from the system – I mean in this highly volatile economic condition, governments & bankers will always do their very best to regulate, control and manipulate the economy and even oppress their citizens in order to avoid their fears. Ironically, these controls, manipulations and interference have been the main cause of the fall of the great economies in history. With this kind of strategy, regardless of what they are going to do with the economy, whether they’re going to wreck it, you can’t be hurt so badly because you have a strategy that is not fully dependent upon them.

 

 

For your financial wellness, till next.

 

 

Bong Bungalan Jr.