Millionaire Shortcuts 11 of 42: Money is debt

One of the most fascinating things about money is how many people seem to be obsessed with it, but very few know how the economic machine works. People just believe money comes from a printer only presidents and prime ministers can access or that all money are placed in banks who are so kind and borrows them to us.
What few people realize, is that money is created every time you take up a mortgage or a loan, money is nothing more than debt. This is not some secret reserved for the elite group who tries to keep this information from people. This is just how the machine works and very few people bother to stop and ask the question, where does money really come from? They do not care and the answer shocks them when they find out. The banks do not lend out money to you, they are obligated to have a reserve of a set percentage of your loan in their account. The rest are created when you sign the contract on the loan promising to pay back the money with interest to the bank over time. Created out of thin air every time someone borrows money, quite fascinating. It is not a dark conspiracy theory, educate yourself and understand the money you are so busy chasing.
To stop becoming a slave to money and master it you must understand how the economic machine works, how markets operate, how you can invest your money. Debt is a double-edged sword which can become a prison if you do not know what you are doing, but on the other hand it can give you leverage if you master it and use it correctly. It gives you reach you normally would not have had, unfortunately most of us use it on things we do not need instead of using it as a tool to gain wealth.

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Blog: Above average - The 42 Millionaire Shortcuts