Money, currency, and wealth are the three terms that are most frequently misunderstood while discussing money. Most people are unaware of the distinction between money and currency.

The distinction between currency and money is probably not fully understood by many bankers and financial accountants. Being aware of this distinction and taking appropriate action can make the difference between building true riches and leading a life of struggle and mediocrity.

The majority of people appear to believe that the paper currency they keep in their wallet or handbag is actual money. Most definitely not! This is what is known as currency; fiat currency.

What is currency?

·        Currency is what most people think about it.

·        It is a medium of exchange.

·        A unite of account. ( It’s got number on it.)

·        It’s portable.

·        It is durable.

·        It is divisible. (You can make change from it)

·        Currency has no intrinsic value.

One of the biggest problems with currency is that the governments can print more and more of it whenever they want or need to.

Naturally, this increases the total amount of currency in circulation, which results in a steady decline in the value of the currency.

Obviously, if there are more of anything, it loses its rarity and value. This constant transfer of wealth from your pockets and bank accounts to the government and banking system results from the dilution of the currency supply.

However, it is frightening to realize that if you believe your entire "store of wealth" is in your possession of paper money, which is ultimately only worth the paper it is written on, then this idea implies that your purchasing power is always declining!

Consider this. There are countless instances of this, but let's use gasoline as one. How many liters of gasoline could you have purchased with a $20 paper bill ten years ago? Consider five years ago. How about last year? I hope the picture is clear to you?

The same $20 paper note won't buy you nearly as many litres of gasoline as it would have done one, five, or ten years ago. Unless we are creating a store of wealth in real money (silver and maybe gold), we lose our purchasing power when currencies decline.

There have been dozens of different currencies throughout history, and all fiat currencies—those not backed by gold and silver—have reached zero! Fiat currencies have a failure rate of 100%.

What is money?

·        Money is a store of value and maintains its purchasing power over a long period of time plus:

·        It is a medium of exchange.

·        A unite of account.

·        It is portable.

·        It is durable.

·        It is divisible.

·        It is fungible.

·        Silver and gold have intrinsic value.

Silver and gold are the optimum form of money because of its properties. You can store a large amount of value in a very small area.

Only silver and gold have maintained their purchasing power over the last 5000 years! This is because silver and gold are limited in quantity – there is only a finite amount of silver and gold on planet earth.