Two weeks ago, I wrote about the concept that money mistakes are often temporary. Unlike many other types of errors that can have permanent, life-altering consequences, the consequences of financial mistakes are usually short-lived. You can lose money, make poor investments, or waste a few thousand dollars, but in the grand scheme of things, these mistakes don’t define your future. You can always make more money.
But as I’ve been reflecting on this further, a new realization has struck me—an even deeper layer to why money mistakes are temporary. And it has everything to do with the nature of money itself. Let’s consider this: money is fictitious.
The Fictitious Nature of Money
Take a moment to let that idea sink in. Money is not a physical, tangible entity that exists independently in the world. Sure, we carry bills in our wallets and coins in our pockets, but beyond that, money is an abstract concept—an idea that only exists because we, as a society, collectively agree on its value.
Consider some of the digital marvels that have taken the world by storm lately. NFTs (non-fungible tokens) are a prime example. These are essentially digital items that can be reproduced endlessly, yet are often sold for millions of dollars. The NBA has sold digital highlights for more than $230 million, and an artist recently sold a digital image for $69 million. What is it, exactly, that makes these pieces of digital art so valuable? Not the physical object, certainly. What makes them valuable is the collective agreement that they are.
And then there’s Bitcoin, a digital currency that exists solely in the form of bits and bytes. At the time of writing, a single Bitcoin is worth more than $60,000. But there’s no “Bitcoin” you can hold in your hand, no coin you can store in a bank vault. It’s a digital asset with no physical manifestation, and yet people are willing to trade real goods and services for it.
What’s happening here is not so much about the physicality of money but about belief. We, as a society, have decided that certain things—whether digital tokens or virtual currency—are worth something. Money itself is a product of collective imagination. It has value because we all agree it does.
The Rules We Live By
Now, let’s pause for a moment and think about why this matters. The U.S. government recently passed a $1.9 trillion stimulus package, essentially printing more money to help stabilize the economy during challenging times. Over the past few years, they’ve printed trillions of dollars in response to the COVID-19 pandemic, and yet, inflation is rising, the national debt is increasing, and the value of money itself is still (at least for now) generally accepted.
If the government can print money at will—and no one seems to bat an eye—then why can’t you?
You might respond by saying, “Well, I don’t want to break the rules of capitalism and the financial system.” And that’s a perfectly valid perspective. We need laws and regulations to maintain order. However, it’s worth considering that these rules are not as immutable as they may seem. They are products of human agreement, much like the value of a Bitcoin or an NFT. They exist because we collectively decide they do.
Think about the way you view money now. When you realize that money is not some inherent, unchanging truth, but rather a social construct—a fiction—you can start to see how it fits into the larger narrative of the world. In fact, the notion that money is fictional could change the way you approach your finances entirely. As I’ve said before, “The thing about money mistakes is that you can always make more money.” The important thing is that once you accept money for what it is—a fluid, often subjective entity—you stop stressing over every penny. You start using money as a tool, just as the government does.
What About the Homeless?
Of course, when I talk about money being fictitious, I’m not suggesting that we should ignore real-world problems like homelessness, poverty, or inequality. Some readers responded to my last post with concerns about people who don’t have access to money and resources. They pointed out that it’s easy to say “money is fictional” when you have plenty of it, but what about those who don’t?
This is a very valid concern. Homelessness is a real, tangible issue. You either have a place to live or you don’t. Unlike money, which can fluctuate in value depending on collective belief, homelessness is not a social construct. It’s a very real experience that involves physical hardship and suffering.
However, here’s the crux of the issue: money can’t solve homelessness—not in the way we might think. The reason money doesn’t directly solve homelessness is because the solution isn’t simply about handing out more cash. If it were that easy, philanthropists like Bill Gates could end homelessness with a single donation. But as Gates himself understands, simply throwing money at a problem doesn’t always lead to sustainable change.
Instead of directly tackling homelessness by just giving out funds, Gates focuses his efforts on addressing root causes—improving sanitation, eliminating diseases like malaria, and improving access to education and healthcare. He knows that the real work is about addressing systemic issues, not just the symptoms.
Similarly, while we can argue that money doesn’t solve everything, it’s still an incredibly powerful tool when used wisely. It’s the vehicle we use to tackle larger societal issues. So when we say that money is “fictitious,” we mean that its power lies in the collective belief and agreement we place in it. And as such, we can use that belief to bring about change—whether that means tackling homelessness, improving healthcare, or making society more equitable.
Money as a Tool, Not a Trap
At the end of the day, money is a tool, not an end in itself. And understanding this makes all the difference in how we approach it. If we stop viewing money as an ultimate goal and start seeing it as a flexible tool, we can begin to think differently about how we use it—not just for personal gain, but to address larger issues in society.
So, don’t get caught up in the rules or the limitations that come with money. Realize that the concept of money is malleable, and with that understanding, you can use it strategically to improve your life and the world around you. As I’ve said before, don’t stress over making mistakes with money. It’s just a tool, and you can always make more. What’s more important is how you choose to use it.
