I was considering this question a few days ago, and thought it sufficiently interesting to be the topic of a blog post.

Money is the universal term for currency which can be exchanged for products, or services (at least that is my definition). Money, and its usage however is not that simple.

I feel there are two generalized uses of money:

Personal
When you go shopping to buy food for your family, in no respect are you investing to make financial gain. Yes you are investing in your families health, but unless you are looking far down the line in terms of what money making opportunities good health presents…. just… no.

When you buy a computer game, a car, or a conservatory, you are giving money in exchange for a product which is for your own personal pleasure rather than financial gain. Yes you can sell your car down the line, but you will more than likely not make a profit, and even if you were to, it is highly unlikely that you invested that money intending to make money.

Investment
Buying stock in a company with the intention of profiting from rises in the value of the company, premium bonds, domain name investment, forex etc. These are examples of investment. In my opinion the best way to define investment is with examples: in general I define it as the intention of gaining more money than you initially had through various legal means.

Now logically the above two ‘uses’ interlink with one another. If you have to buy a new computer game, you can sell a domain name to fund it. Likewise if you want to invest in premium bonds, you can spend your personal money to do so.

Now the above is common knowledge. Most people understand what Investment is, I was simply trying to set the scene ‘per se’.

All my business and investment is based online. I separate it from my personal money with the reality/virtual divide. When it comes to personal spending I am always extremely reluctant, and timid with money. I have no financial problems, or worries at the moment, but given that I intend to travel around the world, and then go to university for 3 years, now is the time I should be actively thinking about my financial future.

When it comes to online investment, I know what I am doing. I have more online worth than offline. I try new things, I make mistakes, but it doesn’t bother me too much. I am therefore reluctant to withdraw my online funds simply because investment is more fun, is exhilarating, and is better than having money sitting around.
My viewpoint is that if I have earned x thousand dollars I should reinvest it such that I can earn a further x thousand dollars. Withdrawing it would simply be withdrawing opportunities.

Recently I played around with typo traffic domains. I invested some serious moola with no success. The tasting fees alone were in the hundreds of dollars. Not ideal, but better than losing thousands.
On the flip side I myself recently did some personal spending, and did buy a game. It cost me £60 whereas the previous week it was on sale at £50. I was really annoyed, and very reluctant to buy it. Again, when booking a bus ticket for my gap year I was quoted a cost of £210. The next day “the sale had ended”, and the price was £240. I was again, extremely reluctant. In this case I did not buy the ticket. What struck me was that when money is a physical entity which you can hold, it is far more difficult to spend it when compared to some digits on a screen.

Another thing that niggles me is paypal. When I do want to withdraw money, paypal extorts me on exchange rates. Statements such as ‘The current exchange rate is x’ flash all over the screen, when a simple check of the Internet shows that this is not true. A withdrawal of £1,000 has a £40 loss based on exchange rates discrepancies !
Given that it is crossing the virtual/reality boundary, this simply isn’t acceptable to me. If I am not happy losing £10 on a game purchase, then I obviously wont be happy losing £40 on.. nothing !

I have a day job, and I earn a reasonable wage. This is the money I spend on personal things. The money I have invested in assets is significantly more than this. It could simply be a relativity thing. $100 when you have thousands is not significant, whereas $100 when you only have $600 is.

So how do I view money. My view is one of personal/investment schizophrenia. I have two completely different personalities, and attitudes when it comes to the real world, as opposed to e-investment. How do YOU view money? Comment, and let me know.