It takes money to make, er, lose money

Money is one of those domains, perhaps like everything human constructed, where two unrelenting, unyielding, powerful opposite truths prevail.

Money is one of those domains, perhaps like everything human constructed, where two unrelenting, unyielding, powerful opposite truths prevail.

In business and economic circles, two well-known sayings sum up these two polar opposite realties; first, “You need money to make money” and second, “To make a small fortune, start with a large one.”

Money, as some visionary economic thinkers used to put it, is energy. And like other sources or nodes of energy, money gains, or loses momentum. Sometimes quickly.

And money, like other forms of energy, electricity for example, is more often known or encountered by its expressions as opposed to its presence or mechanisms.

Here’s what I mean; electricity is produced and transported in, for most of us opaque, even semi-mysterious ways, it surges unseen through wires and cables over and underground, runs through every floor, ceiling and wall around us and then makes its way to various switches, lights and appliances where we (finally) see its effects.

Money is kind of the same. By itself, for example, a piece of paper with numbers authoritatively printed on it can do very little. You can’t eat it or wear it, and for most of us, it’s not even very interesting to look at, but its impact, or its absence can be life-changing.

Money inspires us to great visions, adventures and service. It also, more than almost anything else, brings out the worst in us. Money brings us to, even drives us to, desperate and destructive acts.

Money, it has been said, perhaps like every other invention from automobiles to smart phones to shoes, makes a wonderful servant, but a terrible master.

In short, money, like every other expression of energy is inherently active, even unstable.

The search goes on for dollars, and the work goes on for dimes

— Line from a traditional American folk song

Money is rarely, if ever, inert. Even the idea, or promise of money, is enough to motivate risks, alliances and adventures that a calmer mind would never entertain.

Few ventures inspire individuals, even entire nations, more than the prospect of treasure or riches to be discovered or claimed.

How many movies, stories and even family legends have been built on this foundation of seeking fortunes.

Whether it is undiscovered oil fields or galactic asteroids, or even the lotto, Investment in pursuit of larger wealth seems to drive us all. And, as carnival barkers used to put it, “You cannot win if you do not play.”

“Playing” always costs money. Whether it is a lotto ticket or shares in the stock market, money is always the cost of admission to play the game.

But, “winning” is far from assured. Investments, like losses, may be large or small. And, thanks to credit (expressed in multiple ways) we could easily lose far more than we invested.

A truism of gambling used to be “Only gamble with as much as you can afford to lose.”

For lots of reasons, few of us follow that simple advice. Sometimes it is because it is not practical or even possible, other times, the odds are just too tempting.

And the higher the stakes, and the odds, the more compelling and irresistible the near gravitational pull.

Fortunes of individuals, families and entire empires have risen and fallen on the whims of often unseen economic forces.

As with electricity, surges and outages may emerge seemingly out of nowhere with immediate, and often long-term impacts.

Who of us would not take a (minimal) risk to double our money? And who of us would not wager (literally) a few dollars to potentially win a multi-million-dollar lottery?

And yet, the irony is that rarely is the money what we most want; what we want (most of the time) isn’t what money actually is, but what it can do.

Whether it is freedom or security or the ultimate escape, it is what money offers or promises us that we want – not just the cash itself. In other words, it is what money represents, not just what it is.

Money, perhaps like many other things in life, means very different things to us at different stages of life – and by life, I mean the lifespan of either an individual or an organization.

Organizations, like businesses, as with individuals, have a semi-natural arc of birth, emergence, maturity and decline.

Money can act as an accelerant, sometimes a near cancerous one.

At minimum, money, the lack of it or the surplus of it, distorts what we would usually do – or prioritize.

One financial advisor I heard several years ago advised us to befriend any who might have “more money than sense” especially as they tire of their toys (as in vehicles or valuables). The reality of our time is that we have an excess of individuals, agencies and businesses that have “more money than sense.”

As one recent local political figure put it, “We don’t have a revenue problem, we have a budgeting problem.”

That might be the diagnosis of the core of most financial stress points – spending, more than income.

Another international financial observer noted that many, at all levels act like “poor people with too much money.”

In other words, some of us might have visible money, literally in hand, but our financial stability (and future) is far from stable.

To a large degree, I think that is the problem with far too many projects, governments and individuals; they spend money as if it were an infinite, or at least ever-expanding, resource. Expenses and certainly potential investments and improvements are infinite, or at least close to it. But resources, at any level, materials, labor and, of course, money, are not.

It might be easy to point to projects, locally, nationally, even internationally, that could be described as “boondoggles” – where the costs escalate (often thanks to what might be called “mission-creep”) to the point where both the investment (aka, sunk costs) are both too great to continue and too massive to abandon.

The clichés about money and those not wise enough to keep it are common; “A fool and his money are soon parted” is as true of governments and corporations as it is of individuals.