How they enable financial planning as we know it.

... Stakes shall be not further apart than one hundred (100) feet and not less substantial than three-quarter (3/4) inch iron pins eighteen (18) inches long, driven flush with the ground, the corner point being marked by a metal tag stamped with the registration number of the engineer or surveyor. ... Said stake shall be driven to a depth of not less than two (2) inches below the finished grade of the lot and shall be permanently monumented on the surface.

-Colorado Revised Statutes

True or False? The single biggest threat to our clients' financial well-being is the integrity of money itself.

I say "True." Financial planning is worthless if money has no value.

So the question becomes: What makes money "money"? What makes it valuable?

Forget economics courses. They describe money's functions. This is money's essence.

Today, money is the water in which we swim. Yet, what do we understand of it?

Money is an Interior phenomenon. It is created by Agreement and sustained by Belief. At the end of the day, "money" is literally nothing unless our squishy, thoughtful, unpredictable interior selves collectively make it into something. We can work the math, read the history, play like money's exterior is actually its reality ... and we run the very real risk of wholly misunderstanding it and its role in modern society. More importantly, we run the risk of misunderstanding its significant vulnerabilities and exposing ourselves and our economies to overt tragedy.

We have long since quit using inherently valuable money. This belief system is relatively new, especially at its current magnitude. Within the last few centuries we have traded money of intrinsic value for perceived value.

Alchemy.

To have perceived value, we must collectively agree that it is valuable. We must believe-and we must believe together. What do we understand of today's money? For most of us, frankly, not much. We know how to get it, how to spend it, save it, invest it, share it and protect it-but what "it" do we get, spend, save, invest, share and protect? You coul look it up in our CFP® course work. Good luck.

Bernard Lietaer, scholar, father of the euro, former European Central Banker, former currency trader of the year (Business Week 1992) and current advocate of complementary currencies, etc., tells us that every dollar in circulation reflects a dollar of debt. Without debt, our dominant currency collapses. Literally. It is our collective reference point. Debt enables money to be created. Debt enables money to be reliable.

How do we get debt? People want money. Banks have money. Banks give people money-but only when they believe they will be repaid. Banks only believe they will be repaid when they have adequate security.

How have they been adequately secured? Real estate. How do they secure real estate? Survey stakes.

Here is where it gets fun.

Ever see real property legal descriptions? Probably-but you may not remember. And the underlying law? Whew. Anyway, we get these with survey stakes. Curious? Try keywording "stakes and plats" for more. Boring!? Absolutely. Yet, like Clark Kent, these innocuous legal constructs pack mighty wallops.

They look like run-on sentences, just gobbledygook. Originally filling volumes of the biggest, dustiest, dreariest books imaginable, your county clerk and recorder's office has most likely upgraded them to microfiche, maybe even computers.

Yet, legal descriptions rock. So do survey stakes. Why? They enable the legal descriptions that enable certainty. They enable land ownership with certainty. Thus defined are property rights and responsibilities, enabling these as social cornerstones. They enable money as we know it, warts and all.

Legal descriptions proclaim exact locations to the world with decimal point accuracy. Employing degrees and distances from points certain, they conceptually envelop blocks of land. As land transfers, descriptions follow titles but the land never moves. When combined with valid, market-sensitive appraisals, legal descriptions engender solid, reliable sources of confidence. This enables standards. Standards enable value.

And enable they do. Whether financing new purchases or serving as simple security for new loans, land provides ideal security. First, it does not move. Second, it is not vulnerable to theft. Third, the comparatively straightforward legal foreclosure process assures confidence. With these, lenders have genuine security in something inherently valuable that they easily can find and claim as theirs, all in due time and in due process. Now, the lender is secure. It knows its exact rights and the precise consequences of the borrower's failure to keep promises of repayment.

How do we know it is exactly thus? Survey stakes.

This is not as easy as it looks. Early on, legal descriptions could get sloppy. When a legal description bases itself on natural elements-an oak tree, a river's middle, a lake's shore line, the grassy knoll or some other landmark-you can be certain its originators anticipated permanence. Unfortunately, nature does not always cooperate. Rivers move. Trees die. Mountains, shorelines and grassy knolls erode.

Survey stakes don't move. Survey stakes provide certainty for the inherently uncertain. Without survey stakes, banks could not be confident that they were only taking their debtor's property. Trespass laws aren't friendly.

Look at the legal specs of Colorado law-big iron rods hammered into the ground with descriptions on top. One of them is literally ground zero for an area's legal descriptions. The rest work in reference.

These modest little survey stakes become the functional realities for all real property descriptions in surrounding areas. They also source the boundaries denoting political subdivisions.

"So?!" you ask, with justification.

So...we know the deal. Owners are willing to invest in that property. They know what they own.

Most importantly, banks can now loan upon it.

"So?!" you ask, with justification.

So!!! This enables civilization as we know it.

Interior meets exterior. Intangible engages tangible. Sellers want to be paid in full. Buyers want to leverage their cash with other people's money. They would borrow money from Sellers but Sellers are not banks. They generally cannot take default risk.

Banks can. Banks can do this because they have many borrowers, they have skilled employees and it is their business. Banks come to the rescue. The buyer's need is met. The seller's dilemma is resolved.

Consequences: The bank writes a check in full to the seller. The buyer promises to repay the bank for its kindness.

The bank appreciates the promise, but it wants a bit more certainty. If it doesn't get its money back, it wants the property to sell to get its money back. So the buyer tells the bank it can have the property should the buyer ever fail to keep its promise. The bank says "fine" and proceeds to record miscellaneous promises, with enforceable security interests in the appropriate clerk and recorders office. Nobody but the title company really notices the humble little legal description made possible by survey stakes. Nonetheless, everybody is happy.

So, how does this enable civilization as we know it? Simple: It gives us money, as we know it.

We have a buyer owning property and a seller holding cash. The property still exists, just with a new owner. The old owner has a fistful of cash.

"Nice enough in its own right," you wonder, with justification, "But how do we get the cash into the system in the first place?"

Now, let's watch.

The land exists, as always, but now the seller has the money.

Does the bank have less money? Not necessarily-because the bank makes its own money. It literally manufactures it.

"From what?!" you ask, with justification.

"From belief!" say I triumphantly.

"What?!" you shout with indignation. Again, with justification.

This is where we turn lead into gold. Alchemy. For real. Like Rumplestilskin, Midas' patron or the proverbial philosopher's stone. Money is money because we believe it is money. We believe it is money because banks can repay their depositors on demand. Banks can repay their depositors on demand because they have the security of real estate for their loans. They have the security of real estate because of legal descriptions recorded at government offices. We have legal descriptions because of survey stakes.

Let's retrace. The bank holds other people's money in exchange for its promise to pay it back sometime, with a bit of interest. Banks get to loan that money to others at greater interest than they pay the depositor. Seems fair. A mere token for their trouble.

Ah, but it does not stop there. Not only does the bank get to loan that money at more interest to one borrower, it gets to do it several times over-however many times the law or prudence allows. This lending is generally all at greater interest than its original borrowing rate.

Where did all this cash come from? Did the bank just make it up?

Well, sort of. But not entirely. It needs survey stakes. It also needs realistic appraisals. It needs both to make sure it gets its money back sometime in the future.

Of course, the bank is its own form of survey stake. People tend to trust it and its promises. That is key-both to the success of the bank and the success of our money system. Because the original depositors are only concerned about getting their money back when they want it back. The seller only cares that his check doesn't bounce upon cashing. The buyer only cares that she gets the loan and the land. The bank mainly cares that it makes enough loans to cover its expenses, pay its owners handsomely and always, always, always, to have the ability to return its depositors' money upon request. The bank cares a lot about that. But, so long as payback is not a problem, it theoretically can make infinite numbers of loans. These loans constitute our money supply.

This means sufficient reserves to meet short-term demands. It means sufficiently valuable loan portfolios to convert into money for meeting intermediate and long-term requirements. It also has come to mean federal insurance and institutional networking. It mainly means an ability to turn its security interests into cash when necessary.

Perhaps most importantly for the world as we know it, it means borrowers are generating the money for repayment, struggling in the world for each dollar, red of tooth and claw.

When the buyer takes on debt, that debt expands the supply of money. It also anticipates that the buyer will turn her time, treasure and talent into cash over the next few years in order to pay it back. As she turns her future into money she repays the money that paid for her future.

Meanwhile the money circulates, enabling others to convert time, treasure and talent into cash. In turn, they circulate cash to purchase the products of others' time, treasure and talent. Beautiful sculptures emerge from gray lumps. Farmers grow crops. Service providers exchange services. Builders build buildings. Manufacturers manufacture. The economy hums along, providing prosperity for all. Until it no longer does. See John Law, tulipmania and the dot.com collapse.

For now, this is mainly the way we do money. The implications are extraordinary.

Real estate becomes cash, our money supply. Money enables our world to function. Without it, the world as we know it ceases to exist. None of this is possible without survey stakes. They enable civilization as we know it. Ultimately, they are the bedrock of our clients' financial futures. Scary but true.

Richard B. Wagner, JD, CFP, is the principal of WorthLiving LLC, based in Denver.