How Does Money Work? The Only 2 Ways That Money Can Work For You!

Why Do You Need To Know and Learn About How Money Works?

I have discussed that money is a number score, is like your school and college subject marks and is just a product in the market in my article “What is Money? Find Out How Money Is Made And How You Can Get It!”. 

But have you ever wondered about how money actually works in your life? 

If you get this product from the market which I have explained in my article “What is Money? Find Out How Money Is Made And How You Can Get It” you should now know how money works or how it functions as there is no manual provided along with this product when you go to the market to get it. 

If money is basically a product in the form of a tool, a score, like your school and college marks you should know how to use it correctly so that you can get maximum benefits out of it, can help solve almost all your problems in life and can help you reach whatever goals you have in your life. 

In short you should know how to operate money like any other product that is available in the market. 

There are basically two ways that money works or operates and you should know these two ways to use money in your life.

Money as a Tool for Consumption

Firstly and more commonly money works as a tool for consumption. 

This is a very simple and easy way to use money when you are simply a customer of any other product or services in the market. The more you consume in life the more money you will need to satisfy those consumption needs. 

You may consume anything in life that is available in the market to satisfy your needs and desires. If you are just an employee or only work for money then you are most likely using money only as a tool for consumption to satisfy your daily needs of life. 

There is no special training or education needed to use money for consumption as anyone who is normal can use money to consume almost anything that life has to offer.

 

For example you can use money to consume food, or can help you as a consumer to achieve your education, health, entertainment, travel, housing, family, marriage or any other needs or goals that you may have.

 

The money that is available to you can sometimes be used to consume for fun and pleasure and sometimes it can be used to relieve you from some kind of suffering, problems and pain. 

The only drawback of using money for consumption is that it gets depleted once you avail it to buy other products and services from the market and it never comes back to you until and unless you get another new money tool as a product from the market or you receive new scores or marks from the market in the form of money.

Money as a Tool for Production

The second and less common way that money works is as a tool for production. 

This is comparatively a difficult way to use money for which you do need proper training, guidance, education, experience, skills and knowledge. 

The advantage or the benefit of using money as a tool for production is that, if it is used correctly then it is able to produce more money for you to either consume or produce money further. 

If you are a business owner or an investor then you are definitely using money to produce more money and you keep on producing more money that is unlikely to get depleted as a product under normal circumstances. 

If you are using your available money as a tool for production then this product or the scores or marks that you receive from the market become like your employees. So instead of you working for money, money as an employee keeps working for you.

 

A very simple example of money as a tool for production would be a bank fixed deposit where you are investing the money in a bank to earn say a monthly interest income where this income can be used further as a product or a score or marks to consume money by buying other products and services from the market or by producing more money further. 

The only drawback of using money as a tool for production is that in most cases it is risky and goes through an uncertain process. That is why running a business or investing are considered risky as there are chances of losing your existing money that is available to you. So you should know exactly what you are doing with this product to produce more money by first getting yourself trained under a good and experienced mentor.

So, I hope you have got an insight on how money works which can benefit you to use money that is available to you judiciously and also help you make major decisions in life wisely. 

It is after all entirely your choice as to whether you want to use your money product or score or marks as a consumption tool or as a production tool depending upon your needs, understanding, goals, mission and vision that you have in your life.