What was the most important invention of the twentieth century? I would argue that the single most influential invention was the integrated circuit. Moreso than any other creation, the integrated circuit has changed the way that your life and mine work. Integrated circuits made high powered, low cost computing possible. They are a relatively basic invention that has changed society, and I would argue that you should view your money like an integrated circuit.
Integrated Circuits are Ubiquitous and Meaningless
I just said that integrated circuits are the most important invention of the twentieth century, and now I'm saying they're meaningless. Contradiction? No.
Integrated circuits are everywhere, but they have to be programmed and contextualized to create value to an end user. A hunk of silicon with doped metals printed on it is no more useful than a bucket of sand and a sheet of aluminum foil without any context. Money is the same.
A programmed integrated circuit is useless without a context; you can certainly program a circuit without a goal, but why would you do that; an integrated circuit needs to be part of a system. Unless you know what you want the integrated circuit to do, it will be utterly useless. Likewise, money always needs to be contextualized and programmed. Goals and other resources (including your brain) provide the context that money needs to be effective. Programming is the work that it takes to get your money doing what you want it to do. For example, if you want your money to make enough money to cover you living expenses, then you need to invest it. If you want your money to pay for a car, then you need to find a car to buy. Money doesn't just know what to do, you have to make it happen, but you can set up a system wherein your money automatically does what you want it to do.
On the flip side, it's possible to have a context or goal but to incorrectly program an integrated circuit. You may wish to make an iPhone, but if you don't know how to program a microchip to "Appley" things then you'll end up with something else. Programming an integrated circuit isn't rocket science, but it is a skill. You have to learn to create a program, or you'll never achieve your goals. This is the same thing with money. If you don't understand how to deploy your money, then you will never achieve your goals. Wealth isn't built accidentally, generosity isn't developed accidentally. You have to become a skilled money manager if you ever hope to do anything with your money. You need a money earning program, a money saving program, an investing program, and an emergency avoidance program, and they all need to aim at your goals. These things don't happen on accident, you have to make them happen.
Integrated Circuits are always suboptimal
Integrated circuits are generic. They aren't popular because they are always the best solution. In fact, integrated circuits are never the best solution, but they are almost always the simplest solution.
You can easily apply your knowledge of an integrated circuit in one situation to a completely different situation. You just have to create a new program for the new situation which is easy because you know how to program integrated circuits.
The same is true with money. Money is never the best option to solve a problem, but it's usually the simplest solution if you understand how to use it. If you can learn to apply a little bit of knowledge, and a focused goal to your money, you will use it incredibly effectively.
When you're first learning to program, you will have a lot of waste, but over time you'll become efficient in your use of integrated circuits and money if you extend effort to learn about them. Sure, you could spent your time learning about discrete circuit design (or the financial equivalent of insourcing everything), but you may also learn why suboptimal solutions are often optimal in the long run.
Integrated Circuits are meant to be rearranged
As I mentioned previously, integrated circuits are generic which means that you can arrange them however you like. You must design the arrangement of integrated circuits and circuit components to achieve your goal. If you want to, you can rearrange or redesign integrated circuits to achieve different goals. This is what they are designed to do.
The same is true with money. Money, and money behaviors, and investments don't have to follow the same order for each person. If you are skilled enough, then you can constantly rearrange your money designe to achieve different goals. However, if you're unskilled, you're just going to break everything.
I firmly believe that thinking clearly, ambitiously, and creatively about money is a skill worth developing. If you don't understand that money can be rearranged, then you're going to spend your life following generic advice that may or may not be beneficial to you. To achieve the goals you want to achieve, you need to know how to rearrange money scripts and money behaviors.
I'm a wife, a mom, an employee, and a personal finance nerd who is devoted to spreadsheeting my way through life.