Entrepreneurs – You Need to Understand about Money, and Here is Why

Do you think that when your business generates you plenty of money you will become rich? Think again.

Entrepreneurs – it doesn’t matter how much money you make; what’s important is what you do with your money.

Fast cars? Luxury homes? Your very own boat? How about an island? Obviously, the more you make, the more you have choices – that’s why many people say that money can buy you choices.

The thing is, it’s quite often that the more you make, the more you spend. That’s how people roll; that’s how the seemingly successful businessman with a Ferrari can have $500K in debt.

How about saving your hard earned cash? Well, I don’t know how about you, but piling up your money in your account is not a smart decision, either… considering the current uncertain economy.

The thing is, before you know what to do with your money, you need to understand what “money” is in the first place.

“Money is really just an idea,” said Robert Kiyosaki – and I agree with him. Money is just a figment of your imagination.

The best way to explain money is to show you why people use it – and why the so-called money consists of worthless paper and tokens – yet we all value it in some ways. To understand what I mean, I strongly encourage your to have a look at this very useful infographic from BuddyLoans.com about money, attempting to answer the question, “what is money and why do we value it?”

What is money infographic by BuddyLoans.com
Courtesy of BuddyLoans.com

An interesting infographic. And yes, currency is NOT equal the amount of gold as we know it. Why? It’s simple. The government can create currency using, as described in the infographic, the less scarce commodity: Imagination.

I get it; so what?

Let’s go back to the statement on the first sentence of this article: What’s important for an entrepreneur – other than growing the business empire is this: What is he/she need to do with the (imaginative) money?

Well, saving an imagination doesn’t seem logical, does it? The best way you and I can do is to turn your currency into non – or less – imaginary money and assets – e.g. stocks, precious metals, real estate or yet-another-money-making-business.

The key here is to know the game and understand the rule of the game. E.g. if you decide to turn your currency into stocks, you need to understand how to read charts; if you decide to turn your it into a property. You need to understand the valuation, mortgage procedures, and property management if you want to rent yours out.


You see, being a successful entrepreneur is great and all; but that’s just one part of the whole entrepreneurial journey; another important part is on how to be successful at managing your revenue and income.

So, if you are dreaming about being a successful entrepreneur and driving around in a Lamborghini, make sure that you understand about your money first, and how to manage it better.

And please, please make sure that you have the “expendable” money for your fancy stuffs. You don’t want to be a broke successful entrepreneur, do you?

I know I don’t.