The Things That Money Can Do For You
(and the things that it can't)
There are certain things that money can do really well and things that money can’t do at all.
Contrary to popular belief, the real purpose of money is not to buy crap.
I’m not encouraging being cheap. I don’t even like the word frugality…there’s something lame about that word’s connotations of knitting your own cardigans etc etc.
It’s just that I’m against spending on stuff that is obviously <redacted>.
Leased BMWs, Netflix, junk food, booze, minibreaks, passive entertainment, knick-knacks, endless soft furnishings etc etc
No, the purpose of money is to get you the lifestyle that you want.
Having money (what I call financial runway) allows you to move house, move neighbourhood, move job, move career…even move countries. It allows you to take a break from work (a sabbatical or mini-retirement) when you want one.
It gives you options that people simply do not have when they are living paycheck to paycheck.
Money is an effective antidote to serfdom. It can’t buy courage directly but it does allows you to be braver.
How can you be brave (and rational) when you are struggling with debt? You can’t.
The best reason to pay off your mortgage is to create a bomb-proof financial foundation...that frees you to take <more> risk in your career or in your investing. This is more about psychology than it is a financial decision.
If you can’t be brave in your career and investing…well, good luck with building wealth.
Once you have got the lifestyle that you want, it’s okay to keep going and keep earning and investing…but this is just a way of keeping score in a game.
At that point the numbers don’t really mean anything more than digits on a sports scoreboard.
But money is always important. It represents stored energy and optionality.
There are many people in The Prison Camp who say things like “Money isn’t important”.
For the most part, this is pure cope.
There are 2 types of people that say that money isn’t important.
The first (and most common) type of person that says money doesn’t matter is the person that doesn’t have any.
There is a tendency for humans to see where their arrow has landed and then paint a bullseye around it. We are great at thinking up arguments that support our current outcomes. Most opinions are after-the-fact rationalisations of prior decisions.
This is why most people who say “money isn’t important” are broke.
“Poor people validate their financial ineptitude by using irrelevant comparisons. They’ll argue; Well money isn’t as important as love”. Now is that comparison dumb or what? What’s more important your arm or your leg? Maybe they’re both important.
Listen up my friends: Money is extremely important in the areas in which it works and extremely unimportant in the areas in which it doesn’t. Although love may make the world go round, it sure doesn’t pay for the building of any hospitals, churches or homes. It also doesn’t feed anybody.
Not convinced? Try paying your bills with love. Still not sure? Then pop on over to the bank and try depositing some love and see what happens.
T Harv Eker
Interestingly, Eker is American but describes an attitude that’s more common in the UK where the remnants of the feudal system linger on in people’s minds.
People that built some wealth the hard way (the only way for 99% of us) understand the importance of money in our society.
You may be able to find counter-points to this. Sometimes rich people will say that money is not important.
The celebrities that say that money isn’t important are typically actors or musicians or influenzas trying to curry favour with the plebs public. The message is “I’m just like you”…(they really aren’t).
These celebs sometimes say they want to pay higher taxes (but don’t). They seem unaware they could just wire extra money to the tax authorities if they really wanted to (I can give them HMRC’s bank details).
People say lots of things. If you notice a gap between what people say and what people do…always go with what they do. Anyone who hasn’t got that message from the last 4 years has not been paying attention.
Money is extremely important in the areas in which it works and extremely unimportant in the areas in which it doesn’t.
You can not buy health and fitness with money.
You can not buy love or self-esteem or inner peace with money.
You can not buy good mental health with money.
I used to think that flexing with money was stupid because I thought that all status-signalling was stupid.
Now, I’m not so sure about the status bit. Maybe humans can not resist making comparisons and inventing status hierarchies?
Let’s talk a bit more about the benefits of having a calm and clear mind.
Getting your personal finances in order is necessary to achieve this but it may not be sufficient.
Behold the following graphic which represents the concept of The Prison Camp:
Did you think that it was just a co-incidence that - 10 years ago - I chose an image that included a sick hut and an isolation cell?
No, it was not an accident and not a co-incidence. Health issues and introversion (aka self-imposed isolation) were a big part of my journey.
This is why I don’t just limit myself to writing about to money. I was a finance geek myself but I realised it would be a terrible fate to end up as an unfit finance geek who never exercises.
Fitness is a catalyst for changes in other areas of life. It's the best place to learn mastery of self...it changes your bio-chemistry...and bio-chemistry is upstream of everything.
I found exercise to be an essential part of removing financial anxiety. Exercise is necessary for good mental health (regardless of what is happening in your bank or brokerage accounts).
In my health coaching, I am now helping people quit alcohol, lose weight and escape the trap of depression.
In my financial coaching I focus on money and investing which are my areas of deep-subject matter expertise (I worked in corporate finance for ~20 years and since then I have done financial coaching for ~10 years).
When money is in its correct place (i.e. working for you in the background) then you are freed up to tackle the bigger challenges of health, career, relationships, meaning & purpose etc.
Love to everyone
Barney
If you would like to talk about financial coaching, please read this first and set up an introductory call with me. Please hit reply if you have any questions. I look forward to speaking with you!