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Discover the 3 Types of Money and How They Can Boost Your Wealth -->

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Discover the 3 Types of Money and How They Can Boost Your Wealth

To acquire money requires valor, to keep money requires prudence, and to spend money well is an art.

Berthold Auerbach

coin and paper money

The holy book says that money answers all things, and as such, its importance cannot be overemphasised as an object or item used as a medium of exchange that is generally accepted by the majority of people for the payment of goods and services.  Money has been known to have taken many forms through the ages, but worthy of note is that money has consistently served three functions, which include: store of value, unit of account, and medium of exchange. So anything that serves these three purposes can be called money.

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The Barter System

The barter system was the system used to obtain or exchange goods and services before the current money system was developed. People will exchange the product or service they have but don’t need at the moment with their neighbour who has what they need and are also in need of what they have. The problem with this ancient system of trade is that it did not allow for efficient trading and transferability. For instance, if someone has an apple but needs an orange, he/she must find someone who not only has oranges but must also have a need for an apple.  The inefficiency and cumbersome nature of the barter system gave rise to the continuous innovations that have brought us to where we are today.

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Having said that, you should know that this is not a history class, so we are not interested in the evolution of money.  We just want to look at the types of money today and how you can deploy them so that you can profit maximally from them. There are three types of Money known to man today and they are:

3. The people's money

The people’s money is the new money and the money for now and the future. It is a decentralised type of money that is people-centric.  It is the money that is most attacked by the government oligarchy and those who want to maintain and preserve the monopolistic old order for the exploitation of the people.  Although people’s money is still the most volatile kind of money to have, it sure has the capability to lift anyone from poverty with the speed of light and vice versa.  This money is called cryptocurrency and is built on blockchain technology. The king and foremost of cryptocurrencies is Bitcoin, launched in 2009.  Since then, blockchain technology and its derivatives, crypto coins, and tokens have revolutionised and decentralised money and the way we do virtually everything. The major characteristic of this form of money is its decentralised nature; it is void of any centralised authority like the government, but it is a decentralised ledger of all transactions across a peer-to-peer (P2P) network where the participants govern and can confirm transactions without a need for a central clearing authority. Bitcoin and Etherium have become the new gold and silver, and they can only get better.

What Should You Do With It?

HODL it hard

Join the world largest crypto exchange

2. Government Money

Government money, also known as fiat money, is a government-issued currency that does not require backing by a physical commodity. Instead, it is backed by the government that issued it, and the government has authority and control over its value and supply, not necessarily demand and supply as we are made to believe. Government (fiat) money is not just the medium of exchange in today’s world; it is also the token of people's perception of the worth of their currency and economy, and the stronger the economy, the stronger its money will be perceived and consequently sought after by the international community, and vice versa. A country’s perceptions must be supported by an economy that can produce the products and services that people want, as can be seen in the country’s GDP.

The government's (fiat) money includes the Naira (₦), USD ($),  pound (£), euro (€), etc.  They are important for our everyday transactions in the marketplace.  Although fiat money is the most known and most used, it is ironically the most inferior, and untrustworthy by all standards, as it cannot stand the test of time.  Saving it is in most cases, counterproductive because it is prone to inflammation and devaluation.

Take the Naira, for instance; As of 2015, about N180-N200 could get you a dollar ($1), but with the systemic devaluation of the Naira, today one dollar is exchanging at over seven hundred and fifty Naira, (N750), and with the way things are going, it is possible that you will be needing as much as one thousand Naira (₦1000) to buy a $1 item before the year runs out.  With the inflation at over 20.77 per cent as of today, it means that if you had ₦1000 in January, today your ₦1000 is only worth much less than ₦800.

What To Use Your Fiat For

What should you do With Government money?  Before what you should be doing with your fiat, what you should not do with it is more important.  If there is one thing you should never do with government (fiat) is to SAVE IT. Never Save money in its ‘currency’ form or you may come back to it and see that it has flown away. I know not saving is a conflict with what has been taught all your life but go through the list of the world's richest people and tell us who among them saved his/her way to financial freedom.  Even in your community who saved to financial freedom?  If you check you will see that it is productive ventures and the right investments that made them.

Also read: The 3 Ways To Change The Money Blueprint That Limits You

What then should fiat be used for: they should be used for;

  • Spend it as soon as you earn it.
  • Convert it to any of the other two types of money.
  • Invest it.

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1. God's Money

This is the foremost form of money.  It is the most reliable and trustworthy form of money. You can never go wrong with God’s money. It is the only form of money that has been known over all generations and ages to provide a safe haven for investors and individuals alike in times like this. The time of recession or downward economic outlook has been projected for 2023.  To know more about the 2023 world economic growth outlook projection: Inflation And Uncertainty Hits Harder As IMF Warns Of Global Economic Growth Contraction In 2023

God’s Money is called Gold and Silver.

 The silver is Mine and the gold is Mine,’ declares the Lord of Almighty

What Do You Do With God’s Money?

Invest it or in it. Think about it. Where you invest and when are what will determine whether you will get rich or not.  I do not advocate saving in the contest of keeping your money in the banks to get 0-4% max when inflation is at 20.5%, which to any sensible mind makes no sense.  But if you must save, save gold and silver as hedges against inflation and recession.  Your wealth is better in the gold vaults than in the bank vaults.

Making money is a common sense. It’s not rocket science. But unfortunately, when it comes to money, common sense is uncommon.

A big shout-out to Robert Kiyosaki for inspiring this post.


What is money?

Money is any item or object that is generally accepted as payment for goods and services and repayment of debts in a given country or socio-economic context.

What are the functions of money?

The main functions of money are as a medium of exchange, a unit of account, a measure and a store of value, and also as a standard of deferred payment and a basis of credit.

Why money is called currency?

Money is called currency because it is a means by which values are expressed and circulated anonymously from person to person and country to country, facilitating trade, and because it is the principal measure of wealth and prosperity.

What is money used for?

Money is used for the exchange of goods and services; it is also used for making investments and savings.

What is trade by barter?

In trade, barter is a system of exchange in which participants in a transaction directly exchange goods or services for other goods or services without using a medium of exchange, such as money.

What are the 3 types of money?

The three types of money are people's money, government or fiat money, and God's money.

what is a vault?

A vault is a strong room or compartment (often made of steel) for the safekeeping of valuables.

What is a blockchain?

A blockchain is a distributed ledger that duplicates and distributes transactions across the network of computers participating. In other words, A blockchain is a distributed peer-to-peer database that has strict rules for adding data.

What is Cryptocurrency?

Cryptocurrency is a digital currency or token in which transactions are verified and records are maintained by a decentralised system using cryptography, rather than by a centralised authority. Decentralised cryptocurrencies such as Bitcoin now provide an outlet for personal wealth that is beyond restriction and confiscation.

What are the types of cryptocurrency?

The major types of cryptocurrencies include utility, payment, security, and stablecoins. There are also Defi tokens, NFTs, and asset-backed tokens.

what are examples of cryptocurrencies?

Cryptocurrency is a form of digital money. Examples include Bitcoin, Ether, Litecoin, etc.

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