Money, money, money – the good, the bad, and the ugly

money-treeFrom the day you’re born until the day you die, money will always play a huge role in determining how good your quality of life was, is, or will be.

That’s a pretty profound realisation, isn’t it?

I’m not going to say that money is everything because it’s not—you can be super rich, but still feel utterly miserable.

Nevertheless, I am certain that being financially literate and knowing how money works will help you improve your quality of life.  Yes, being financially literate will help you make good financial decisions that grow your money.

But it’s also about avoiding painful financial mistakes that can set you on the path to financial ruin.  Either way, it wouldn’t hurt to improve your financial literacy!

What is good about money:

  • Money gives you control over time.  And control over your time is the biggest lever on the path to happiness.
  • Money gives you confidence.  Just enough.  Don’t overshoot and become arrogant or cocky.
  • Money has a direct correlation to your life energy.  Why not respect that precious commodity, your life energy, enough to become conscious of how it is spent?
  • It often comes to you at its own.  I am not talking about the lottery.  That’s a disguised tax on people who can’t do math.  If your goal is to make meaning (by trying to solve a problem in innovative ways), you are more likely to make money—than if you start with the goal of making money, in which case, you will probably not make money or meaning.
  • Money when spent wisely on the right things is a great lever to achieve something good.
  • Money is exactly like sex.  You thought of nothing else if you didn’t have it and thought of other things if you did.

Is that last one a good thing?  Hmm, I wonder.   Anyway, that brings me direct to

What is bad about money:

  • It’s a lot more fun to spend money than to invest it.
  • We tend to spend lots of money on material stuff to impress other people, not realizing that those people couldn’t care less about us.  We’d be shocked at how few people care where our purse was made or how much noise our car makes.
  • You think spending money on frivolous stuff impresses people, when in reality it just makes you look insecure and pompous (this is particularly common among young people who come into money for the first time).
  • Our education systems mainly teach us how to earn money, but forget to teach us about handling, investing, and spending money.  That’s the primary reason why most people have money problems; they were never schooled in the science of cash flow management.  People who cannot control their cash flow work for those who can.
  • We are too focused on it and forget to have a good time—going for a hike, a bike ride, a swim, reading a book, or doing anything else that’s free (or cheap).  Having cheap hobbies is a large, yet hidden asset on your personal balance sheet.
  • The record shows that for society, the richer we become, the harder it gets to live within our means.  Abundance is harder for us to handle than scarcity.
  • It makes us forget what we really want more of.  Generally, it is more time, not more money.

What is ugly about money:

  • Some people think that money alone will make them feel good.  On the contrary, it is having meaning in your life that makes you feel good.
  • Money makes us forget that prosperity is not just about making money; it’s more about the freedom to live the way you want—with peace of mind, in harmony with others, and enjoying physical health.
  • Money “motivates” us to spending the majority of our time in a job we hate, so as to make enough money to spend a part of our time in a life we don’t hate.  Does that make any sense?
  • So much dissatisfaction comes from focusing on what we don’t have (like not “enough” money) that the simple exercise of acknowledging and valuing what we do have can transform our outlook.  By living on less, you can actually enjoy life more.  Financial independence is as much psychological as material freedom.  The constant strive for more money makes us forget to question our past assumptions about what is “enough” for us to live happily and well.
  • It distracts us from simplifying our life.  In a simple life, you tend to spend less than you earn and this alone can bring peace of mind.
  • Saving money requires closing the gap between your ego and reality.  Not easy to do, but worth pondering about.
  • People think money is exciting.  However, managing your money should be boring, but hardly anybody sees it that way and pays a high price for going into “exciting investments”.

What about that ever present dream of becoming a millionaire?

A lot of people don’t realize that when they say they want to be a millionaire, what they probably mean is that they want to spend a million dollars—which is literally the opposite of being a millionaire.

Others, who won’t admit to liking money that much, say, “I don’t want to be a millionaire.  I just want to live like one.”  Yeah, for real.  That kind of attitude will make it happen.

By the way, who still thinks that $1 million is a glamorously large amount of money?  Reality check: Most people will need that amount to cover their definition of a pretty mediocre retirement a few years down the road.  See also Anchoring Bias.

We all know that it’s important to put money away for emergencies, education, and retirement.  Why don’t we do it?  I don’t know.  Perhaps you could tell us by dropping your comments below.

Luckily, there are two angles to growing your nest egg.  You can save more or spend less.  Since money has a direct correlation to your life energy, why not respect that precious commodity—your life energy—in becoming conscious of how it is spent?  See also Happy Money.

In conclusion, I believe that wealthy people are not smarter than poor people, they just have different and more supportive money habits.  Perhaps the greatest obstacle people have in becoming rich is that they “think they already know” everything about money (Overconfidence Bias), yet it is precisely your version of what is right that has led you to your current financial status.

No one is ever born knowing how to manage money; therefore, do browse the Tacomob website to see whether you can learn something new about prospering slowly.

An excellent start on that learning journey is the video series Hidden Secrets Of Money (5 episodes).

“I can’t put it any more simply or emphatically: How we behave toward our money, how we treat our money speaks volumes about how we perceive and value ourselves.  If we aren’t powerful with money, we aren’t powerful, period.” — Suze Orman

“More than money itself, what most people need is peace of mind.  If you don’t take control of your finances, they will control you (no matter how much you earn).” — Dave Ramsey

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