Money is Not Math

Many people try to plan their financial future by depending upon mathematical projections for their money. After all, numbers that represent money are all around us – prices, stock market quotes, rates of return, P/E ratios.

However, money is a means of exchange whose future value can not be predicted by a set of mathematical calculations. There are too many variables involved.

2 + 2 = 4… that’s math. But if I were to take two oranges and place them on your kitchen counter, leave them alone for one full year, then come back and place two more oranges on your counter - how many oranges would you have all together? Two.

You would have the two oranges I just put on the counter, plus two little rotten black balls of something that used to be oranges… but they aren’t oranges anymore - they’re two little black balls of nothing! Why is that? During the year, outside forces attacked your oranges and robbed them of their value. The same thing happens with your money.

As you try to calculate a linear, mathematical path, your money is attacked by the outside forces of wealth erosion: taxes, inflation, market loss, rate hikes, fees, planned obsolescence, the propensity to consume, technological changes, family needs, etc. All of these are financial variables which can not be predicted by math. So, to put it simply…

Your money works more like oranges than it does like math!

It’s important to work with money as money and keep yourself in a position where you can successfully adapt to the changes that occur in your financial life. That’s one of the objectives of my work for you.