Jul. 5, 2005 - Money Represents Time |
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This is Part IV of a five-part series called Money 101.
Defining money physically is one thing, but we also need to understand it spiritually too. We need to go deeper than understanding what money is; we need to understand what it represents.
Money represents time. It quantifies time in practical terms so we can spend it. How does that work? Lets go back to our discussion of barter and money systems. Without a barter or money system, we would spend the bulk of our time, if not all of it, taking care of our physical needs providing shelter, food, and clothing. We would need to develop and employ high-level skills in these basic functions just to survive. This is very inefficient because it takes so much time to be proficient in each of these areas.
In a barter system we trade goods and services to take care of our needs. If I build houses and you grow food, we can exchange with each other and save time by specializing in certain skills. I dont have to spend time growing food and you dont have to spend time building your shelter. Ill be a better builder than you could ever be and youll be a better farmer than I could ever be. As we learned before, however, bartering is still very inefficient and inconvenient. A money system solves the efficiency and convenience problems so that we have more opportunities to trade and make even better use of our time.
In a money system we trade our time for money. Think about how we earn money. To get paid for anything we must invest time. How many of us get paid for nothing or go to work for free? We put in time at work, whether for ourselves or someone else, and we expect money in return. If we work overtime, we expect some form of compensation for our extra efforts. On the other hand, our employers pay us money and they expect our time in return. Its a neat little system. Thus, money enables us to exchange our most precious worldly asset, time, for other goods and services. We cant readily trade with our time but we can trade with our money.
The concept of money representing time underpins the basis for sound financial stewardship and decision-making. When we see every dollar as a reflection of our time, our most precious worldly asset, then we can truly count the cost of spending and saving behaviors.
Finally, I will conclude this brief series by also noting that money represents priorities.
Other posts in this series:
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Jan. 15, 2006 - Bartering |
| Posted by Redeemed |
Do you have any insight as far as bartering to avoid paying income tax on the exchanged services or goods?
I also tried to see what you had posted for Children and Finances and couldn't find anything. Do you have specific guidelines you use for teaching your children to save, tithe, spend and the percentages you use for each area?
Thanks. |
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Jan. 15, 2006 - Response to Redeemed |
| Posted by stevebraun |
Thanks for asking two very good questions.
First, with respect to bartering and taxes the answer is very clear. By law, you must report the dollar value of your bartering as income and pay taxes accordingly. If you want to obey the law, as I assume you do, then there is no such thing as using "bartering to avoid paying income tax on the exchanged services or goods." I wish it were different but that's the law.
Bartering, of course, is much more easily hidden from the IRS than monetary compensation and so it is an area ripe for abuse. The fact that it is easier to cheat, however, does not make it right. Failure to report income is considered tax evasion, a felony punishable by fines and/or jail time. Even if you think you can get away with it, God surely knows. And what kind of testimony would cheating be to others -- your children, friends, unbelievers?
Second, with respect to children and finances I do have a lot of material. The problem is that I just haven't gotten around to posting it. Just like I haven't posted my review of Rich Dad Poor Dad. There's just so much time in my day. I am planning to make more of this material available over the next few months as my work and family schedule permits. Your question is a good prompting for me to get it done and I appreciate that. Please check back periodically. If you have specific questions to address, let know and I will do my best to place an emphasis on that part of the material.
Hope this helps! Thanks for reading and leaving a comment.
God bless you.
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Jan. 16, 2006 - Glad to know the facts |
| Posted by |
Thanks for the information. Maybe I should read more about tax laws. My two boys and I are considering the idea of starting a small business.
I'm sure there are a lot of laws I should be aware of. It's hard to believe you even have to report your "time" bartered as income! I'm so glad you enlightened me - I definitely would NOT want to break the law.
I was wondering why your post made bartering sound pretty useless, now I understand. Thanks again and I will be back to read more on training children in financial matters.
Edited by Redeemed on Jan. 16, 2006 at 8:32 PM |
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Jan. 17, 2006 - Starting a Business |
| Posted by stevebraun |
If you are starting a business, then I advise the following:
1. Go to www.irs.gov and download Publication 334 "Tax Guide for Small Business" and Publication 583 "Starting A Business and Keeping Records." That should give you an idea of what's involved in getting started.
2. Contact a CPA (certified public accountant) in your state to help you with incorporation decisions and paperwork. It costs money but it is well worth setting things up correctly from the beginning. You may even get a deal if it's just you and the children trying to do something on the side, but you won't know until you make an appointment. I'm sure you already know someone who is a CPA or it should be easy to find a good one in your area through friends or church.
By the way, I think starting a business with your children is one of the great ideas for parents to teach their children about finances. If you do things right, and get involved with the enterprise, they will learn great lessons that will last a lifetime.
Keep up the good work!
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