Wyatt Yates Host 00:00 Money doesn't have to be complicated. You can achieve financial independence. This podcast gets to the truth behind the money mess you hear from your grandma, your broke uncle, the latest social media influencers and the so-called money experts. Welcome to Money Myths with your host, wyatt Yates. 00:23 This week's myth is money is a scarce resource. Now, we can all probably relate to this one. I know I can personally. I'm pretty sure just about everybody in the country at one point or another can relate to this myth Money being scarce, not having enough of it, needing more. So on a surface it really feels like this myth is confirmed and true. This really is something that is a no-brainer. Money is scarce. We know the government limits how much they print and it's got to be scarce. But let's break it down and look at it and get an understanding of what first money really is, since that's the first part of this myth, and then the whole scarcity aspect of it, money being a scarce resource. So first let's look at what money is. 01:24 Think back to before there was money. How did people get what they needed if they didn't have it Before the first currency? Or think of your dollars and change in your pockets. Before that first currency was established, people would have to barter and exchange goods and services for things they need that they didn't have. This bartering and exchanging for goods and services is a very inefficient system. If I need an animal to feed my family but I just have crops to exchange, but my crop isn't ready to harvest, how do I get that? I can't give you my wheat for the goat if I can't harvest the wheat. So when currency was established or money was first established, it gave a common median of exchange of value so I could harvest my crop, get money for it and keep that and be able to use it at a later time when I needed something. So this gave a lot of flexibility and improved a lot of the inefficiencies in the barter economy. Now the first minted currency is estimated to have been established roughly 5,000 years ago and this brought the efficiencies of what we see today in terms of money and currency, with having this common exchange of value and this store of value that eliminated all the inefficiencies of the barter system. This new currency also allowed it to make it easier for governments to collect taxes. So instead of having to get a percentage of everybody's crops or livestock, they can now get this currency and it's an easier way to collect taxes and it also made it easier for creditors to collect on their debts. So there's a lot of efficiencies it brought to the market. 03:36 When you understand that money is just a store of value and a way to exchange value, then you understand well, how do I get money? Somebody is not willing to give me more money than the perceived value they're getting from me in either goods or services. So you have to add value to be able to get money, and that is the core thing you need to understand about money is you have to add value. Now let's look at the second piece, the scarcity aspect. How scarce is money? 04:17 So, to look at this, I'm going to look at a couple of different things. The first thing is, you know, let's look at the supply of money and what we think of in terms of money, which is the money in your pocket or the balance in your bank account. These are all part of what economists refer to as the M2 money supply. So the M2 money supply is just a way to measure the supply of money in the market. There's an M1, there's an M3. We're going to use the M2 in this scenario. It basically includes cash and coin, currency and circulation. It includes the balances in your savings and checking accounts, money market mutual funds, a few other things, but it basically is a good snapshot of how much money is in the marketplace. So I'm looking here only at US figures. 05:13 But let's look back at the beginning of World War II. The M2 money supply how much money was in the market was roughly $100 billion, and the 80 years since then the M2 money supply has increased 22,000%. I'll say that again M2 money supply has increased 22,000% in the last 80 years to where the M2 money supply is now nearly $20 trillion just in the M2 money supply. $20 trillion, 22,000% increase in the last 80 years. Now you may say, well, but what about inflation? Isn't the inflation the reason why it's increased that much? And you can look at inflation on its own. So inflation in the same 80 year timeframe has increased 1800%. So the money supply has increased 12 times. What inflation has increased in the last 80 years since the beginning of World War II? That big of a discrepancy makes you wonder, right, if money is scarce, why is it increasing in supply at such a greater rate than just inflation, which is the value of a bucket of goods and services, or a basket of goods and services. 06:46 But the M2 money supply is not all the value in the marketplace. We said money is a store of value. So to look at what all money is, the M2 money supply only accounts for basically equivalent of liquid cash, as you would report on a company financial statement. What about the home? You own all the real estate in the marketplace. What about the stock market? What is the value of all the assets in the US? It's pretty astonishing. Actually, the total value of all US assets as of today is roughly 162 trillion with a T dollars. 162 trillion dollars is the value of all assets. So if you want to measure store of value, what is the value in the market? It's 162 trillion dollars. When you just look at the United States. 07:44 Now to put this in perspective, let's look at it. If I took all the US citizens into that 162 trillion dollars and said I wanted to split it up today evenly amongst every citizen in the US, that would be 486,000 dollars per US citizen. So if I told you today take the number of people in your household, multiply that by 486,000, and I'm going to give you that much money today, would you think money scares Probably not right. That's a lot of money, but it's not split up evenly and it shouldn't be right, because money is about the value you provide. People are not gonna give me more money than the value they perceive I give them in return. If you want more money, you have to add more value. So let's relook at this. 08:46 Okay, the myth is money is a scarce resource. We all agree that we felt that this has been true before. Right, but at the same time, when we understand what money really is and that it's just a store of value, a way to exchange value, and we understand that the value of all US assets alone equals $86,000 per US citizen, then it doesn't seem so scarce. If I had that much money hit my bank account today, I Want to feel like money scares, and that is why I'm saying though, in theory, this myth Would be confirmed right, there is a limited supply of money, but it's growing exponentially that this myth is busted. It's all about your mindset when it comes to money, and when you have this scarcity mentality, you will limit what you can do, you will limit how much money you can get. When you have this scarcity mindset, yes, you still need to be smart about the decisions you make with your money and how you use your money. But you cannot have the scarcity mindset that it is a scarce resource and you cannot get more of it. When you have that mindset, you will not get more of it guaranteed. So let's go to our action steps. It does no good Understanding that the reasons why I'm saying this myth is busted If you don't apply it to your life. So I'm gonna give you three action steps that you can take to apply this to your life. 10:31 Number one is asking yourself these questions. First question is how are you currently adding value to other people's lives? So, to add value to other people's lives, think about Does what you do enrich their life? Does it make their life easier? Does it make them feel good about themselves and and does it help them better themselves? If you can answer yes to any of those questions, you're adding value. It then just becomes a question of how much value. But you have to make other people's lives easier and rich. It make them feel good about themselves or Make them better themselves if they're gonna give you money for what you provide to them. 11:24 For the second question, ask yourself how many other people can do what you do. The more people that can do what you do, the less valuable what you do is, because you are not a scarce resource. If more people can do it, I can go to Joe across the street and get the same exact thing, and he's willing to accept less money. So why would I go to you? So ask yourself how many other people can do what you do. The fewer people that can do what you do means you're a scarce resource, so I'm going to give you more money to make sure I have access to what you are giving me. And for the last question how can you improve yourself to get more money? So to get more money, we know we have to add more value. You can add more value by either helping more people and or either one do something that fewer people can do, so you have to work on yourself to be able to do something that fewer people can do and or to optimize how many people you can help. So if I can help more people, I'm gonna get more money because and putting more value out in the marketplace. So in return for that, I get more money, or I can do something that fewer people can do, which means I perceive that it's more valuable as the person that's giving you the money. So I'm willing to give you more money because I can't get it somewhere else. So ask yourself those three questions, write them down and think about it. If you want more money, that's how you do it. Add more value to the marketplace. You have to help other people and we know that the value in the marketplace is exponentially more than what the typical person has. So if you wanna get access to that, put yourself out there and add value and help other people. 13:48 Want to achieve financial independence? Go to ruggedfinancialcom where you can download my free PDF of the 12 Things to Do to Win With Money and you can also sign up for my weekly money tips emails, where I cover the same tips and tricks and advice I walk all my clients through so you can begin your journey to financial independence. 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