Tag Archives: Money Creation Process

Money and the Laws of Value

f6One summer day a hen was on the look out for food on a farmyard. As she scratched at the straw on the ground, she uncovered a diamond jewel. The hen suspected that the jewel might be valuable because of the way it glittered in the sun.

This object is probably worth a lot, the hen thought to herself, but I will trade a bushel of this diamond for a single bushel of corn. (One bushel of diamond is worth about 20 million tons of corn)

What is true for the hen is also true for human beings. People cannot use money better than their level of appreciation of its power. If you are primarily a consumer you will only be familiar with the consumption power of money – what money can buy. An investor is very familiar with the reproductive power of money – How money can multiply. A business man is familiar with the production power of money – How money change forms into valuable products and services. Money has no power in itself to change your financial personality; it however has power to magnify your financial nature.

Money as a Store of Energy

Money is a store of economic energy. Without the awareness, acquisition, organization, and perfection of these internal values in any man, wealth creation in a sustainable manner is impossible. Poverty resulting from lack of cash or tangible assets is temporary and easily curable; however, poverty resulting from lack of discovery or awareness of these internal sources of wealth is permanent and cannot be cured by the acquisition or possession of money or tangible assets. Attempting to cure malaria by the use of pain relieving tablets is at best a temporary solution. Unfortunately, most people looking for money usually neglect and disrespect their internal primary source of wealth. According to Mark Victor Hansen “You do not have wealth, you are your wealth”! The earlier you come to the full realization of this universal principle, the quicker you will be on your journey to financial success.

External sources of values are those invisible assets outside a person that is relatively fixed and is accessible to every man equally. These include: Time, Problems, and Relationships. Everyman has equal access to these three variables; and they are unavoidable raw materials for the creation of every form of tangible wealth.

Money Creation Process

Three variables therefore determine the quantity of money a person can legally create over a given period of time: The number of internal sources of wealth discovered and properly harnessed; Amount of external sources of values efficiently utilized; and how much of the outputs of the combination of those variables that is successfully delivered to those who need them in exchange for money. For instance, the income that an employee will ultimately earn will be determined by how much of his talents, passions, and skills he is able to discover, improve, and convert to expertise. Combined with how well he is able to manage the time, opportunities, and relationships available in his work to generate and deliver the expected results consistently over a period of time.

Laws of Value

Since we now understand that, value is the source of money; and that money cannot exist alone without corresponding value; understanding the principles and laws of value will enable us create and sustain money in a legal and enduring manner.

# 1 – Law of Value Flow

In every human relationship or interaction value is always flowing but money may not”

Since value is an invisible carrier of money, you may be gaining or losing money without you being consciously aware of it. Every time you come in contact with or spend some time with people, you will either increase or decrease your cumulative value whether or not money exchanged hands during such interaction. That means if you are in a high paying job, but spend a lot of time with people with poverty mind set or low expectation individuals; your net cumulative value will gradually reduce to reflect your dominant mind set. This will naturally reduce your productivity on your job resulting in stagnation or ultimate downsizing! Conversely, if every time you have a meeting with a prospect he comes out feeling he has added more value than he gave during the interaction; he’ll seek more opportunities to receive such values, on a more frequent basis – which means the consummation of a business relationship and the signing of contract!

On a daily or weekly basis, if your interaction or association is more with those who drain value from you without offering equivalent or more value in return, you will eventually become money poor.

# 2 – Law of Multiple State of Value

“Value like water has three states, as long as value keeps flowing, under the right circumstance and conditions, it will freeze to tangible money”

Many people get discouraged when they begin to offer value and they don’t immediately receive the money equivalent of such values. Such frustration often leads to compromise, mediocrity in service delivery, untimely resignation, and quitting from entrepreneurial venture. But, think about it this way, it takes time for water to become ice in a deep freezer even under the consistent application of electrical power. Even when you are delivering value consistently, it takes some time for the value to be appreciated and recognized for its money worth by other people.

Most of the world’s leading successful people have gone through times when the values they offered were not immediately rewarded with money. Zig Ziglar in his autobiography stated that his first 3,000 speeches were given for free. Anthony Robbins – the renowned author and personal achievement expert said that “in his first six months as motivational speaker, all his speeches were given free, and he had an average of 5 speaking engagement every day”.

# 3 – Law of Value Exchange

“Value must be greater than or equal to price “

Think about the last time you paid $20 for your transportation fare. Was it because you liked the driver of the vehicle? Or because you believed that trekking the same distance will have more adverse effect on your health and finance. Human Beings are naturally selfish. They will not willingly give out an amount of money unless they have convinced themselves that the product or service will deliver to them more value than the price they want to pay for it.

Marketing is therefore an honorable service of helping people enjoy more value than the price they pay for the product or service that solves a particular problem in their life or business. A marketer is not a money taker; he is a value giver and a solution provider. Many technically sound people shy away from marketing their products with zeal because of psychological guilt fueled by ignorance of the law of value exchange. Not selling your product denies someone from enjoying the benefits it offers and slows down the growth of the nation’s economy.