08/02/2011 01:12 pm ET Updated Oct 02, 2011

Money: A Tool

In order to make money and increase your wealth you must understand what money is. Just as a carpenter looks at a saw as a tool to cut a board to build a house or just as a mechanic looks at a wrench as a tool to build a motor, you must look at money as a tool to build wealth.

Most individuals look at money as an entity unto itself, and as something, which provide them with happiness through the purchase of material things. Money should not be used just for this purpose, but it should be used to develop security, contentment, power, and peace of mind. If you understand this, you will know what money is, how it should be used, and what it can accomplish. If you don't understand this, you will continue your life depending on money (rather than on yourself) to create situations and bring you the wealth or things you want, as if it had a mind of its own.

You spend a lot of time learning to excel in your occupation or trade. If you take the money that you earn and waste it, lose, it disregard it, you have confused the entire process. You might as well not be paid if you fail to use your money effectively to increase your wealth. If you look at money this way, you will be a lot more careful about how you use it. You work hard to earn money, and once you have earned it, you must work to make it work for you.

It is easy, all you have to do is apply the same common sense that you know is necessary in your occupation or trade to earn the money which that occupation or trade produces. Throw out the individuals, the ideas (keeping up with the Joneses or impressing others), and the advice that does not work and devote your time and effort to discovering those things that will. In doing so you can complete the wealth process and live a life filled with security and power. Here are some things to consider:

a) Treat saving and investing as you do other essential expenses, such as shelter, food, utilities, transportation and insurance;

b) Establish reasonable financial goals to achieve regardless of your income;

c) Save for specific purposes and establish timeframes to accumulate the amount designated;

d) Be patient with your investments, you can't control the ups and downs of the stock market;

e) Avoid purchases made to give yourself a short-term boost of ego;

f) Place the value of potential impulse purchases in your savings account;

g) Limit the amount of money you keep in your pocket or purse and checking account; money readily available is spent faster;

h) Commit to increasing your net worth (assets minus liabilities) every year by 5 percent, 10 percent or more.

i) Limit your debt load, all debt is expensive.

Theodore R. Daniels is the Founder and President of the Society for Financial Education and Professional Development (SFEPD). Founded in 1998, SFEPD is a non-profit organization whose mission is to enhance the level of financial and economic literacy of individuals and households in the United States and to promote professional development at the early stages of career development through mid-level management.