4 Different Types of Money – Episode 392

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[00:02] Hello, partners. And in this episode, we’re going to be talking about the four kinds of money. This is a list that you’ve gathered and it’s actually a topic that’s come up recent. And this is one we’re going to address it, Kim. So should we start off with number one or do we need to start with a foundation of why there are four different types of money? Well, let’s start with the foundation because of the source of the material, which came from somebody that my husband, Todd Langford, listens to a lot. And it’s a man named Dan Bongino. And it’s interesting because at a first glance, well, four types of money. Oh, my gosh, there could be two, there could be 10. I mean, unlimited number. But what’s

[00:42] interesting about the four types and I don’t know the source beyond Dan of this information, but I have a feeling it might have come from something that Napoleon Hill did. So everybody’s familiar with Napoleon Hill’s Think and Grow Rich book and the myriad little turnoffs from that. But he has a less well-known document that Sharon Lecter did a read of probably about 10 years ago. I’m fairly confident it’s findable. And I want to say it’s called like the devil’s money or something like that. And it’s really apropos for the time in our lives right now that we’re dealing with. And this discussion is not meant to necessarily relate back to Napoleon. I don’t even know if it came from him, but it sure sounded like it might. And apparently, Dan, when he shared

[01:35] the information on the news, played some ancient scratchy recording, which I can totally see being Napoleon Hill of however many years ago. So it’s interesting. We’ll just have some fun with it. Absolutely. And to give context, Sharon was in the book series with Robert Kiyosaki for You Listener. So if that name sounded familiar, but it wasn’t quite there, that’s where it is. And you’ll know the principles and foundations of what we’re Correct. Yes. Well said. Thank you. So number one is money that you earn, that you spend on yourself. And so when you think about that, those of us that earn an income could even be investment earnings. But I think typically we’re talking about earned income from the value

[02:17] that you create in the world. And then when you’re going to go spend that on yourself, you are pretty focused on quality and you’re also pretty focused on quantity. In other words, you want the best value for the dollars that you’re going to spend. It’s not a, oh, how can I get away with this as cheap as possible? Nor is that a, oh, you know, I want this and money’s no object. I’ll just get the best and not worry about the price. So it’s a statement of money that we earn, the first type, and money that we’re going to spend on ourselves. We want the best value. And I think we’re going to because I know where we’re going with this list. You set this up perfectly because we’re going to be able to see each category.

[02:57] So number two, let’s hit that one. OK, so number two is the kind of money that you earn, same type of earnings, but then spend on somebody else. So this could be a gift. It could even be not a gift. Maybe it’s something that you’re buying for your children or your spouse or your home, but it’s clearly going to be spent on somebody else. It could even be food that you’re getting for your family. So here you’re also pretty focused on value. And at the same time, because it is often in gift category, even if that gift is food for your family, we tend to be fairly conscious of the dollars. And we want to make sure that they’re going as far as possible. So, again, we’re efficient. We might be a little willing more to stretch here.

[03:43] And of course, it depends on how people feel about gifts, because sometimes somebody may feel opposite of these two if they’re not the kind of person likes to buy gifts for themselves, but they prefer to buy it for others. You know, these two may flip flop. But again, the point is we’re fairly value focused and we might be a little bit more quantity focused on this one, whereas the first one is clearly all about quality. I think there’s a lot of meaning behind this one, too, because as you talked about giving a gift to someone else, depending on the charity, you’re going to make sure that it aligns with your values more. Or if you’re buying a gift for someone that you really care about, there’s a lot

[04:22] of additional thought to make sure you get the right thing for them. Whereas when we’re solving a problem for ourselves, again, we want the most value, but we may be a little bit more speedy in that process. Yes, well said. So time, quantity, quality. These are all aspects of these first two types of money. So now we’re going to start to see this shift a little bit. So number three. So number three is where you are working with money that was not earned, but you still need to purchase something for yourself. So the most common example of this would be like an expense account where you may have to send in receipts and you may have some restrictions. It could also be like if you’re on a corporate credit card and you’re

[05:09] renting a car or you have any situation where there are things that you need and they’re a true need, it’s not a gift orientation at all, but the money is not earned by you. So we all know the funny saying about you don’t wash rental cars and you certainly don’t wash Uber cars and you don’t have strong care and value around these types of dollars, this third level of money, because you didn’t have to work for it, you didn’t earn it. And so consequently, it’s money that you’re not going to be as conscious of value wise. You’re going to be potentially depending on how your own value orientation is. You might be more about quality, you might be more about quantity, but you’re not going to be as careful with it because it’s money that you did not earn.

[06:04] Now, how do you think this relates as we before we get to number four, how does this relate to children and helping them understand these processes? Because I think if you didn’t learn this properly as a child, when you become an adult, that can be quite dangerous. It’s so interesting as we watch the money habits of anybody, whether it’s child or adult, that has had good training around monetary values and orientation and then either bad training or no training at all. Because with kids, this four types, I mean, this should be taught right when they’re first starting to learn about money, because we’ve all seen what happens when a child is given money versus when they have earned that money,

[06:49] how careful they are with what they spend it on. And so it’s so valuable and it’s tough in today’s world to find an environment where a child can earn money because our rules have changed and kids cannot work out in the marketplace like they used to be able to. But I believe that families can, if they work at it and are a bit creative, involve the kids in a way that they have some money that they earn and they start to learn how the household is run and they start to understand what income creates, what opportunities and how goods and services are purchased for the family. The more you can involve kids, the earlier at age appropriate levels, of course, but the more you can involve kids, the better. And I think it’s also really important to help them understand

[07:35] the sources of the money, but also understand that that may be a private family discussion. In other words, you certainly don’t want to find your kid talking to their friend about maybe the income that you earn or the business level that you have or whatever. So they need to start to learn that as well. Appropriateness around financial discussions that are family oriented versus that that they might talk with with their friends. That being said, it’s funny, I’ve got young adult children and with things like Glassdoor now, where pretty much any salary you want to learn is out in the public. I think this discussion around money has become less of a taboo issue and discussion around salaries and benefits is actually something

[08:18] that kids share widely now these days. And I think that’s a good thing. The fourth one is actually what’s hitting the news and it’s the I’d say the category that is growing the fastest of all, yet the scariest. And that is money that you do not earn, but that you want to spend on others. And that is a fast growing discussion and a very scary discussion, because as we know from the third category, when you do not earn money and you’re wanting to spend it on yourself or on others, you just look at it differently. You can’t help but look at it differently. And so here we have the government and sometimes business environments as well, where the money being spent isn’t yours. And sometimes the dollars are so big that you can’t even relate to them.

[09:18] You know, when you think about, for example, the total amount of auto debt or student loan debt or even our nation’s debt, these numbers are so big these days that we don’t have any way to connect with them. And yet it’s super easy to look out across the landscape and say, oh, well, this money that is not mine and that I didn’t earn should go over here for this purpose. And there are people that have the capacity to make that happen. And that’s a very powerful position that is scary, because when we use words like, well, the government or the government should. So when we say the government, what do we really mean? Well, the government doesn’t earn money either. The government has taxpayer money.

[10:07] And so when we say that the government something or other like the government should pay for that park to get cleaned up. Well, what we’re really saying is that the taxpayers should pay for that park to get cleaned up. And yes, maybe they should. And yet I think we need to be conscious of that kind of language and the thought that goes around with it, which is, oh, well, if I’m in a position of power, I can just move money from here to there because I want to. And we know that when we haven’t earned the money ourselves, we do not have a good perspective on that money. There’s one more hidden disadvantage on that fourth category, which we’ve talked about on other episodes, which is when you’re

[10:46] so far detached from that earning capability and when you’re having it spent on someone else, you can’t have true gratitude for it because you didn’t earn it and they didn’t earn it. So you actually robbed the experience from everyone. Yes, that’s really well said. So as we wrap up, what can we be doing about this? And I think the most important thing is to just be conscious of it and to watch our own language and our own words around it, especially if we have children in the house or we’re in a position of helping children, you know, maybe we’re a Sunday school teacher or a scout leader or more involved in kids in any way. And even our friends sometimes, you know, we had a discussion this morning about adults that still need some guidance

[11:35] about how they’re living their lives or making their choices or what have you. And it’s a tricky area. But if we have thought about it ahead of time, I think one of the best ways to install conscientiousness around a particular subject is to have questions. So, you know, maybe you hear somebody saying, oh, well, the government should do whatever you could just ask. Oh, well, who do you define as the government? And you make it an innocent question and hopefully you just get them to think. Very well said. So I think is as you wrapped up with that, the pushing of the pause button at the end of this episode and just taking a moment to think will do wonders for you. So we want to thank you for listening to this episode.

[12:24] And if you do have questions, send those in. We would love to know your thoughts as you hit pause. And love to hear that feedback. If that’s if that feedback is surprising, that’d be wonderful for us. If that feedback was something that will relate to those four different kinds of money, we’d love to hear that as well. Send that to hello at partners for prosperity. Thank you for listening to the Prosperity Podcast. To take control of your money and have it work for you. Visit us at partners for prosperity dot com. If you liked this episode, make sure you subscribe and leave a review.