Can you really ‘make’ money?

From my childhood, I have been hearing phrases like – study hard, get good grades, get a good job and ultimately, make money.

Till recently, this phrase – ‘making money’ has always confused me. My dad and mom were making money. But we haven’t had any money making machines or printing press or mint at home. They simply made money: my mom from her job and dad from his business.

I always wonder what type of a phrase is that. You make money, he made his riches/fortune et al. from where he is making all the money? Out of thin air? Or the money gets showered from an imaginary heaven up above?

No one is making money in this world! Money is a medium of exchange and it gets transferred from hand to hand every day, every hour and even in every second!

There is only an authority to issue money (print money; it is the exact phrase) or make money. It is the central bank of a country. When it comes to India, our central bank i.e. Reserve Bank of India also known as RBI is doing a fine job in printing out so much of money resulting in an excellent, escalating rate of inflation in our country.

Long ago, when the barter system was abolished and money was invented, there was something important attached to it – Value. Value based on gold. It’s also known as Gold Standard. Money was once a derivative of the gold reserve of a country. But today it’s not. Any nation can print their own money as they please.

A famous financial educator, author and entrepreneur quoted it right: Once upon a time, money was as good as gold. Today this is a fairy tale.  

When I entered into the business of stock trading 3 years ago with this awkward phrase in my mind, I felt stock market as if something which gives you money out of the thin air when you trade along with the market moves.

It took three months for me to understand that stock market is not a place where money is created. It’s the place where money is being exchanged. If you are smart enough you can ‘make’ money. But this making money process is bit hard to comprehend.  When you ‘make’ some money, someone on the other side is losing some money. It’s a game of gain and loss. Not a game of making or creating.

In fact, in this world, you can never make money in your life! You can only ‘take’ the money from the other hand that is willing to give it to you. You can also take it from people who are not willing to give it to you. But it’s a serious crime known as robbery!

Image Courtesy: Internet

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