Dec 26, 2012
I remember listening to a presentation at a business meeting and the speaker talking about the gross revenues of some client or other and our comptroller turning to me and saying, “A billion here, a billion there. Pretty soon you’re talking about real money.”
I was reminded of this joke when I heard an interview Terry Gross conducted with Woody Allen in which he described his life growing up in Flatbush and, noting that most of the parents back then had lived through the Depression, said, “Nobody had any real money and everybody had to work.”
The money we make from working is not “real.” Why? Because, if you stop working, it goes away.
Of course, the realness of money that remains whether you work or not is not a qualitative realness but a quantitative realness. Such accumulated wealth far outstrips the demands placed on it by maintaining a given life style.
It is also the case that if you have enough money to maintain a given life style and, at the same time, invest a portion of the remainder, you can actually increase your wealth at a pace greater than the pace at which your expenses drain said wealth.
Money that generates more money, is real money. Money that merely awaits its inevitable exhaustion, is not.