When it comes to money, there are two kinds of people: 1. those who know money matters, and 2. those who think money doesn’t matter. I honestly believe the second kind are fooling themselves; the first, at least, know what world they live in.
That is why I always advise parents, whatever their social and educational background, never to tell their children that money doesn’t matter, because we can cripple them mentally and send them out into a world that doesn’t really exist.
Many people think that in the old days (hundreds and thousands of years ago) people were happier because they didn’t use money but bartered instead. That is a serious error of reasoning, because barter was not an exchange of things but the payment for one thing with another (it was money; the concept of “money” just hadn’t been invented yet). If banks had existed back then, I imagine people would have taken their cows to the bank and put them in a fixed-term deposit. See “11 curious facts about money you probably didn’t know“.
So much for the eternal debate about today’s capitalist society, where only money counts: society has always worked the same way. The more you have, the more you can afford. If you have nothing, you will have a harder time than someone who has something or a lot.
Of course, we could all move to an island where everyone wears a loincloth, hunts with a bow and arrow and prays to the rain god in summer. The problem is that personally I wouldn’t be happy on that island. And neither would you.
That said, we do need to help our children understand a message that probably even we find hard to grasp.
Nobody wants money for its own sake.
If we stop to analyze what we are really after with money, it isn’t adding to our collection of zeros in the bank account, or tying our self-esteem to our bank balance.
Money itself doesn’t give us pleasure. What gives us pleasure are all the things we can get thanks to money. It sounds like the same thing, but it isn’t, and this simple detail is why we see people with a lot of money living in constant bitterness.
In other words, people who wouldn’t recognize happiness if you put it right in front of them; people who once thought money would solve all their problems and, when they got it, found themselves much worse off. People, then, who don’t understand or have twisted the meaning of the link between money and happiness. Take the case of Markus Persson in our article “Why becoming a billionaire turns into hell for the newly rich“.
There are certain human needs that every person needs to meet, and money is clearly a natural facilitator for meeting them, but when we approach money the wrong way, we can start creating more problems than we solve.
Spare yourself messages like “the rich man is not the one who has the most, but the one who needs the least”. It is true up to a point, since you don’t need a phone or electricity to live, yet we still have them. And they have to be paid for.
Saying that money doesn’t buy happiness is completely false. You know it, I know it, we all know it, because not being able to feed your children is not happiness. Not being able to buy them their textbooks isn’t happiness either. And nobody finds happiness in the middle of being evicted from their own home.
Working 12-hour days all your life at something you hate for peanuts, only because you have bills to pay, isn’t happiness either, even if you have the mental strength to put up with it.
What are the basic needs everyone wants to meet?
1. Security, comfort and certainty
We all want to feel secure on every level, whether we are talking about health or a roof over our heads. We want to avoid pain, stress and worry, and have at least a minimum of comfort, stable if possible. We want our family to be protected and at least not to go without the basics.
Unfortunately, what we call the basics is very expensive nowadays, and not everyone can afford it. But if we have it, we want to be certain we will keep having it.
Having a job often gives you comfort and security in the short term, but not the certainty that you will keep it. Having money today to cover your expenses gives you security today, but not certainty and security tomorrow.
That is why, contradictory as it may sound, to have all this covered, with stable passive income from our investments and an emergency fund that protects us against adversity… to have all this in the long term, we are going to have to risk it in the short term.
In other words, we will have to step out of our comfort zone to seek that long-term security, with no certainty that we will achieve it.
Put like that, it seems to involve too much risk, and sometimes all you need is to create another stable source of income, do some financial planning just in case, and little more. No, you don’t always have to become an entrepreneur, because entrepreneurs also need people to work for them.
Still, you also need a bit of excitement and some risk, because if everything were covered and stable, without any ups and downs, it would be what doctors call “a flat EEG”, which is what happens when brain death has occurred.
And one need, sometimes unconscious, that human beings have is the need to feel alive.
2. You need a purpose
Everyone needs to feel like somebody in one way or another. Serious problems arise when we don’t know who we are or what we want, or what we hope to achieve. And that situation is very similar to “depression”: if you don’t know where you want to go, nobody can help you get there.
You need a purpose, and the lack of one is not caused, as some mistakenly think, by a lack of money, because if a lack of money leaves you without any purpose, that should be your first purpose: to earn more money.
That is why finding something you are passionate about as early as possible (cliché as it may sound) can save you a lot of headaches in the long run.
3. Affection
The truth is that we are not made to be alone. And I’m not only talking about having a romantic partner, who may disappear. We need a circle of friends who value us for who we are and not for what we have, we need family ties that are as healthy as possible, or a partner.
We may go through spells of being “antisocial and apathetic”, but sooner or later the call of affection will ring in us; otherwise, it would be a very bad sign. Even people who have serious difficulty relating to others or forming relationships of any kind see a big improvement in their lives after getting a cat or a dog.
You need to feel loved by someone, and here money can’t help you, although it can help you spend more time with that person or have financial stability that keeps worries out of the relationship, so you can focus on what really matters.
4. Kaizen
It’s a Japanese word we are not very familiar with, but since I brought it up again the other day, let’s repeat how important its meaning is.
Kaizen is the need for constant improvement and growth in every sense. If you have a company, you have to improve it and make it grow. If you are a salesperson, you have to grow as a professional and increase your sales. Whether we are talking about your personal or professional life, you have to keep growing.
If you’re not growing, you’re dying. It’s like a stock. If it stays too long in a sideways trend (neither up nor down), it risks falling. Likewise, if our life forms a double or triple top, our trend will start heading down.
Don’t go to bed a single day without learning something new, and don’t let a week go by without acquiring new skills or knowledge.
Try to make sure that when you review your personal and professional situation next year, you can say you have improved in every way.
When it comes to finances and our personal wealth, I don’t think I need to explain what Kaizen would mean, do I?
