Money is Fungible

As a teenager, I stumbled upon the fact that money is fungible while working in a grocery store. I didn’t have the vocabulary, but I had the concept down pat.

There can be a good reason to be particular about what money gets spent on what, but failing to recognize the fungibility of money can lead to silly decisions and assumptions that can unnecessarily limit how we invest and spend.

I hope to give you a better understanding of what people mean when they say that money is fungible and why it’s important to understand the concept.

Since money is fungible, if you give people some money and money is spent by some of them on untoward activities, you can easily make a connection between the two.

Tax Credit Money Spent On Drugs?

People like to think that they’re living only from dividends, but the fact is that you’re living off of your nest egg, and the dividends are just a tax-inefficient payout for most.

Paying for Everything with Dividends!

Assuming that you have at least some bond allocation somewhere in a 401(k), IRA, or other retirement account when you’re retired, you can sell stocks from taxable & simply exchange some bonds for stock in a tax-advantaged account.

Sell Stocks Without Selling Stocks!

The idea is that if you buy one rental property when your kids are young, the rental income and expected appreciation of the property could pay for your child’s entire tuition by the time they’re college-bound.

Buy One Rental Home & College is Paid For

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