What Do You Really Know About Money?
by Luke McGrath
One of the unfortunate ironies of our time is that money plays such a necessary role in our lives, yet we have very little understanding about it. We spend years in school learning skills and acquiring knowledge, essentially to give us the necessary foundation to earn a living. A very large part of our lives is then taken up by having to work, but the primary reason we do this, of course, is because we expect to get paid. We expect to be rewarded with money, which we then use to purchase goods and services.
You might think, then, that by occupying such a central role in our lives, we would know a fair bit about this stuff we call money. Ask the average person on the street what they know and chances are the response you’ll get is that money is something they use to buy stuff, that money always seems to be in short supply, and that life could be oh-so-better if only they had more of it—a lot more of it!
But this is a superficial understanding at best. How many feel confident in answering such questions as: What makes some money more valuable than others? Why do prices and the cost of living keep rising? What is the difference between money and wealth? What has the effect of governments been when it comes to money?
These are all extremely important questions, and the answers should concern every one of us. Many people may think this subject is too difficult to understand, that it is best left to the experts. But it’s painfully apparent what happens when we put our faith in these alleged experts and avoid seeking out answers for ourselves.
This is why Michael McKay has recently published a book entitled Secrets About Money That Put You At Risk (www.secretsaboutmoney.net). McKay is Chief Economist and President of Iowa Capital Management, and host of www.RadioFreeMarket.com.
Written in an engaging and informal style, McKay’s Secrets About Money sets out to answer these rudimentary questions and give people a starting point for understanding key ideas about money and wealth. The book is not long and can easily be read in one sitting. You’d be forgiven for thinking short means a shallow and superficial analysis, but McKay carefully explains such arcane concepts as legal tender laws, competing currencies, fiat money, inflation, and fractional reserve banking. Eyes may glaze over from such terms, but they’re extremely important ideas that everyone should come to grips with.
Despite the common perception, McKay insists this subject is not rocket science and his presentation of this material certainly affirms that—any layperson should come away having a much better understanding after having read this book. For those eager to learn more, McKay provides recommendations and resources too.
As people are waking up to the fact that monetary ignorance is not bliss, they are demanding changes be made. If one does not know the basics of the subject, those demands for change mean nothing. When you remain ignorant about money and wealth, you are truly putting yourself at risk. As McKay points out, we all should have received these very practical money ABCs in school, but did not.
Secrets About Money That Put You At Risk is a great book that everyone should read. This foundational understanding has been neglected by the public for far too long.
Luke McGrath is a Mannkal Fellow at the Mannkal Economic Education Foundation.
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