We know by experience that money is valuable. But that’s not true, it’s an illusion. It only stores value.

Just like a battery is not a nuclear reactor or a windmill that creates or converts energy, you could assemble a whole lot of batteries but they will be useless unless you charge them somehow. The same way, creating money doesn’t create value by itself, that value has to come from somewhere else, like work for example.

The value of something appears the moment we want to exchange it with others. If we have a bag full of gold in our house, but nobody knows about it, and we never sell or trade it for something… how much is it worth?

It’s only when we make an offer to somebody else that price is potentially created. Those other persons might have a different opinion than us (they almost always do). When both the price we’re willing to sell our stuff for and the money other person is willing to buy it for meet, a price is born. Only then, we can say we know the value of something.

Of course, things can be valuable to ourselves and nobody else, like an old love letter we have stashed on a drawer, but money doesn’t work like that. If we’re talking about good money, it has to be worth as much as possible to as many different people as possible. Not something you want for your love letters.

With that out of the way, let’s see how much money we need.

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