Wealth & Money Quote by Merton Miller

Value is created by choices, not by the pedigree of cash. Nobel laureate Merton Miller spent his career showing that, under competitive markets, the value of a firm depends on the cash flows of its real investments, not on the packaging of its financing. His irrelevance proposition with Franco Modigliani argued that whether money arrives as debt or equity does not change enterprise value; what matters is whether managers invest it in projects with positive net present value.

That perspective rescues finance from mere alchemy. Shuffling claims, levering up, or polishing sources of funds cannot turn bad projects into good ones. Disciplined capital allocation, rigorous hurdle rates, and attention to operating performance drive lasting wealth. In personal terms, a paycheck, a windfall, or an inheritance are all just starting points; the outcomes hinge on choices to save, invest, build skills, or squander.

Real life, of course, is messier. Taxes, bankruptcy costs, and agency problems can make financing choices consequential. Cheap debt can magnify returns; restrictive covenants can constrain. Yet even with these frictions, the engine of value remains the uses of money. A firm that habitually finds high-return opportunities will outpace one that obsesses over its capital stack while starving the business.

There is also an ethical undertone that invites scrutiny. Saying the origin does not matter is not a free pass for misconduct; legitimacy and trust affect the cost of capital and social license. The deeper point is priority: direct attention to allocation, accountability, and productive deployment. Money is inert until steered; provenance is a footnote compared to the story written by decisions. For Miller, finance at its best connects capital to its highest uses, proving that what counts is not the source but the stewardship.