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The truth about money

Typically we tend to look at money negatively – the effort it requires to obtain, the difficulty of saving or holding onto it, and so on. There’s often a strong feeling of lack of control associated with money, as the cost of living rises, the economy ebbs and flows, and building wealth feels like an uphill battle.

Ironically, money problems and stresses have much more to do with our attitude toward money than with our financial situation. Once more it’s our story about it – not the thing itself – that causes the problem.

This is not to discount the influence of external factors, or or to suggest that it should be easy for everyone to become wealthy. However, the truth is that looking at money differently can dramatically change not only our relationship with it, but reduce stress around it, and can often lead to greater abundance and wealth, not to mention peace of mind.

The most damaging beliefs about money are unfortunately the most common, strongly-held beliefs. Debunking these myths is the right place to start if we seek to redefine our relationship with money and gain mastery over this tool, not a slave to some scary set of misbeliefs and inherited ideas.

Money is the root of all evil

Money is a resource, a tool. If people misuse it in cruel or oppressive ways, that’s a reflection of the nature of some human beings or humanity as a whole, not money itself. Perhaps we are afraid to say what’s true – that human beings are the root of all evil. More accurately, there is no such thing as evil – no magical, supernatural force. ‘Evil’ is simply part of the range of human behavior. It might not be something we associate with our own personal behavior, but it’s silly to assign it to some external tool like money, guns, etc. Man-made inventions, used (and misused) by men.

Looking at money in this kind of negative light is so limiting and delusional that it can cause people to act in ways that limit their potential, their life’s experiences, and their happiness. It’s a misbelief that can be deeply damaging. It can cause people to avoid dealing with money, avoid learning about money, and ultimately to live a life with less freedom and joy, and much more anxiety and stress.

In modern society, money is tightly bound with time, value, freedom, happiness, and stress. We confront these things regardless of money – we seek happiness, freedom and peace, and we’re always looking to avoid anxiety and stress. Money happens to be a key element in this equation, so when we poison money by assigning it an association with ‘evil’, we are removing the ability to effectively use money as a positive force in our lives. It’s like wanting to travel but avoiding all forms of transportation. You can still go places, but you’ll be walking.

Perhaps most damaging is the logical conclusion that follows. If money is indeed evil, why would we even want it around? Best to just have a little of it, else it infect me with its evil properties!

Having (or wanting) money makes you ‘greedy’

This is a complementary line of thinking, but not quite the same as the ‘evil’ misbelief above. In this misbelief, the pursuit of money is seen as a negative behavior. It implies that wanting more money is associated with conniving, selfishness, hoarding, dishonesty, and a lack of character. It supposes that wanting more than others is a negative, something shameful. Ironically, we celebrate that same pursuit in the area of athletic performance, intelligence, and a wide range of skillsets including artistic ability, invention, craftsmanship, and so on. You can want to run faster than other people, but don’t you dare want to afford better dental care.

What this really speaks to is groupthink, and inadequacy. It’s simply the desire of people to stigmatize something that makes them feel ‘less than’. It ignores the fact that those who are wealthy are historically far more generous than those who have less, even as a percentage of their wealth.

Wanting more for ourselves and those we care about is built into our brain, and when no one is looking we do self-serving or ‘greedy’ things all the time. We also do wonderful things for others, even strangers. Again, just part of the natural range of behaviors we exhibit as human beings. Damning people for wanting to have more happiness in their own lives is simply masking how we feel about our the limits of our own wealth and ability to earn (offer value).

Sadly, this mindset feeds the very common ‘working class hero’ mentality. The idea that it’s better to struggle, to toil and fight and claw – often sacrificing time, freedom, and comfort through physical labor – than to pursue more wealth or find a more effective way to add value and earn money. The reality is that very often those who struggle with money do so because of a poor understanding and relationship surrounding money, time, freedom and happiness. The ‘heroic’ path is both easier and much more rewarded in society. When you work hard and struggle to pay bills, you’re the heroic ‘everyman’. But when you improve your skills and your understanding of money, and leverage that to create more time, freedom and happiness for yourself, you’re a rich jerk.

That’s unfortunate, and a sign of immaturity in society.

Money can’t buy happiness

Oh yes it can. It has been proven. Studies show that for every uptick in income/wealth, overall happiness in life goes up markedly. And there’s a good reason for this – money buys less stress, more peace of mind, and more enjoyable things and experiences.

Let’s take a tiny example: Being able to afford a car with remote start and heated seats means that a person doesn’t have to go out into the cold weather and warm up a car. That’s more enjoyable and comfortable, period! That makes people a little bit happier. And of course the same is true for not having to worry about bills, being able to buy a few extra nice things for yourself or others, being able to afford a nicer home, more land or privacy, a better view, enjoy your favorite foods more often, experience a wider range of events, travel in comfort, and list goes on.

It is also true that after a certain level of income/wealth there’s no further measurable gain in happiness. This makes perfect sense. Money is a vehicle to store value, and most people value things that are reasonable and have physical and emotional limits. For example, most Americans want to be driving a really nice new car, but have no desire to own 20 new cars. And there’s only so much food we can eat, days we can travel, and so on. In other words, money only goes so far because we have limits.

Happiness obviously isn’t something you can directly purchase. If you’re an unhappy person, buying anything is unlikely to change that. Many people have tried, only to find themselves as unhappy people with a lot of money (or stuff). But money can absolutely ‘buy’ freedom from unhappy circumstances, problems, and anxieties, and provide a wealth of opportunities, comforts, and experiences that can bring more happiness in life.

The only way to get money is by taking it from someone else

This misbelief gets to the heart of what money really is – stored value. Most people think we get money by essentially convincing someone else to give it to us. That could be by doing work for them, or tricking them into it, etc. But either way, they need to part with it for us to get it. In reality, the way we get money is by providing value – not time – our value. No one will pay you to sit and do nothing for 8 hours. You’re paid for the value you provide in that 8 hours. Some people can provide massive value in just a few hours, and are paid accordingly. Others offer little value to the marketplace and spend many hours providing lower value for much less money. Value means that someone else has to recognize it as a benefit – in other words it has to help them do something or gain something. So you only get money when you help others, or introduce a GAIN into the system.

That’s what most people misunderstand. They think they’re taking from the system when they get paid, pulling money OUT of circulation, but in fact they have added money to it – they have given part of themselves in some way – their labor, their skills, their creativity, their counsel. That is why economies grow as populations grow; more people giving of themselves into the collective value system.

Any business that wants to grow, or employee that wants to earn more money, can only do so by providing more value. The employee has to become more reliable, more educated, more creative, more disciplined, more forward-thinking, and so on. And a business must do similar things, offering higher quality services, better products, more consistency, a better experience, and so on. Money simply provides a way to capture and store that human value for later trade. Like a battery.

Now, let’s be clear that people certainly have value outside of a marketplace – as a husband, wife, father, mother, daughter, sister, friend, ally, volunteer, advocate, and the list goes on. But in terms of our society’s established marketplace, the only way to gain more (earn more money) is to give more of yourself. The smartest people simply find ways to add value by doing something they already love to do, have passion for, can do more easily than others, are more efficient at, are more skilled at, have more experience with, etc. So in that way it could be said that those making more money have found ways to help the most people, in the most effective ways.

So, making money is the opposite of taking from someone. It’s giving of yourself to others, in the context of the marketplace.

A penny saved is a penny earned

This is a very common misbelief. And while there’s certainly value in saving money, budgeting, and spending prudently, saving money is not nearly as powerful as earning money.

The main reason is that we can’t save our way into wealth. Preventing water from running out of the tub means we’ll only ever have that amount of water, or less. We need to open the tap to add more water. Preferably we’re doing both – plugging the drain AND running the water. That running water coming in (‘in come’) can take many forms, including salary, business income, investments, and so on. But it doesn’t come from saving money. Even if you save thousands on a car, you have still only spent money. It is not the same as income.

True, saving money means there can be less need for generating income. If you find a laptop on sale and save $100, then when it comes time to buy groceries you have that $100 sitting in the bank to use. You don’t have to find a way to earn that $100.

However, this approach leads to a scarcity mindset (the idea that money is hard to come by…see below), and it very often drives one to think in terms of less, not more in life. What can I get by with for another year? What can I do without? What don’t I need? And while this can be helpful as one part of an overall money strategy, it often becomes the only strategy, and that’s faulty. It becomes a life of living on less – pursue work you can easily get, keep doing what you’ve always done, never improve your skillset, never seek new opportunities, never grow, never change. That’s very limiting in life.

Don’t forget that if you live on less, it actually means you give less of yourself to the marketplace. In turn you resign yourself to being less – at least in terms of the marketplace, which rewards better skills and personal growth. And often times this means to get more money you have to give more of your time. This is a very common approach – offering less value and instead putting in more time. This is why people work extra hours, multiple jobs, weekends, long commutes, more travel, and so on, but still never seem to catch up. If anything they end up less happy, without any freedom or time of their own – always giving away more of their time but not increasing their value.

When we think in terms of earning less money, we often live more limited lives. It’s a vicious circle, because the smaller we think and act, the less value we offer (and therefore the more of our time we have to give instead), which leaves less time for opportunities to grow and improve, and so on. Soon we find our lives have collapsed down to the level of our shrinking bank account, and we’re trapped by both a lack of both time and money.

Money is hard to come by

The prevailing attitude toward money is that it is in short supply. The feeling is that while billionaires and corporations may have a lot of it, us regular folks have to fight over the scraps. This is wholly untrue, and a scarcity mindset is very limiting when it comes to money (and a lot of other things by the way, like love, health, happiness). There is an unimaginable volume of money available in modern society, and access to it – the ability to obtain it – is boundless. Our capacity to earn money is closely tied to our desire to help others, our ability to learn, and our imagination. Do those things have limits? Maybe, but you won’t find the edges of them in your lifetime.

When this mindset is flipped, and we instead think of money as abundant and everywhere, we find ourselves naturally finding ways to bring more of it our way. We no longer waste time trying to save a few bucks. Instead we assume there’s much more money to be had out there by offering more of ourselves, by learning new skills, and by helping others earn more money and improve. People will spend their whole lives clipping coupons and searching for deals, but never pick up a book on improving themselves. Spending days corralling pennies in a corner of the room, as hundreds of thousands of dollars blow out the front door.

With an abundance mindset, we can come to understand that becoming a more valuable employee, a better businessperson, a smarter consumer, a better money manager, or simply a wiser taxpayer can generate returns far beyond that of a stock or bond. We make more money by becoming more ourselves. We just have to look beyond the misbeliefs of the masses, become unwilling to part with our most precious resource (time), and brave enough to improve ourselves in ways that truly help others realize their goals and dreams.