How Do You See Money ?

Think for a moment about how you feel when you hear the word “money.” What is your immediate emotional response? Is it confidence, peace, security, and hope? Or is it anxiety, hopelessness, fear, inadequacy, or guilt? Where are those feelings coming from? What expectations and experiences are creating your level of comfort or discomfort in money matters?

When it comes to money, we live in a world that often promotes illusion rather than reality. Consider for a moment a few of the myths we sometimes fall victim to in the area of money.

Myth 1: Money and “Things” = Success and Happiness

Many of us have been programmed to see “success” in terms of symbols—a fat paycheck, a bigger office, a more elaborate home, a BMW, designer clothing, a villa on the Mediterranean. We assume that the people who have these things have the happy, successful, secure lives we’d all love to have. If we’re successful, we think, we, too, will have these things. In fact, we want to be successful so we can have them.

There are three big problems with this assumption.

First, many of the people who own these things also own huge debts and have lives filled with stress. They have a high consumption lifestyle but no real wealth or financial security at all. They have “big incomes, big homes, big debt, but little net worth.”^[4] In addition, many who truly are successful don’t have all the “things.”

Second, symbol is not substance. The office, the boat, the BMW may be great, but they do not necessarily bring happiness or represent the kind of contribution in the workplace and in society that gives you the rich, deep sense of life satisfaction that comes from knowing you’ve made a meaningful difference. In addition, once the novelty wears off, many people find they’re no more satisfied with their lives than they were before they acquired the “things.”

Third, symbols are often acquired at an enormous cost in terms of broken health and broken relationships both at home and at work—a price that far exceeds their value. Those who acquire symbols at such a price often end up with impaired judgment, depression, and “burnout,” creating problems for themselves, their families, and the organizations in which they work.

Just suppose you could have the villa, the clothing, the new home, and so on at the price of no time with your family, huge interest payments, the stress of barely meeting your financial obligations, tension in your marriage, and no security if you were to lose your job. Or you could have a more modest home and fewer toys, but with greater flexibility, quality family time, no consumer debt, money growing in investments, and less stress. Which would you choose?

Studies show that happiness is not a function of money and things. And most of us would probably agree. In truth, “The best things in life are not things.” But we still get caught up in the “money and things = success and happiness” myth that drives us into long hours and huge debt to acquire things that in the end only exacerbate the problem.

Myth 2: The Best Financial Improvement Strategy is to Increase Income

When we’re in financial stress or we want to increase our financial freedom, the most obvious solution seems to be to increase income. So we decide to work longer hours, take on a second job, or get both parents into the work force to bring more money in.

At first, some things may seem better. If we’ve been struggling, we find that now we can pay our bills. We can provide nicer things for our family. We find we can afford a more expensive home, more expensive clothes, more expensive cars—so we buy them.

But we also discover that we have far less time at home, more job-related costs, and a higher tax rate. And with “consumer debt” habits, our spending increases proportionately. Before long we find that while we’ve been sacrificing vital personal and family time to get on top of things, we’re in financial stress all over again—only at a higher level. We’re still living in a delicately balanced no reserve situation, thinking, “When I make that next $50,000, then I’ll start investing in something that will bring me some return.”

As Robert Kiyosaki observes in his book, Rich Dad, Poor Dad:

[More] money will often not solve the problem; in fact, it may actually accelerate the problem. Money often makes obvious our tragic human flaws. Money often puts a spotlight on what we do not know. That is why, all too often, a person who comes into a sudden windfall of cash—let’s say an inheritance, a pay raise or lottery winnings—soon returns to the same financial mess, if not worse than the mess they were in before they received the money. Money only accentuates the cashflow pattern running around in your head.^[5]

More than what we bring in, it’s how well we manage what we have that makes the difference. As Thomas Stanley and William Danko point out in The Millionaire Next Door, most Americans who actually have the peace of mind of real financial security aren’t all that visibly rich. They save and invest and live frugally. Most live in moderate homes, wear inexpensive suits, and drive American- made cars. They own substantial amounts of appreciable assets, but don’t display a high-consumption lifestyle. Most are married, and in half the cases, spouses do not have outside jobs. And as we observed in Chapter 2, they didn’t inherit their money or win the lottery or a game show prize. They’re people who have simply learned to put principles of sound financial management into practice.^[6]

Myth 3: Money = Privilege = Children’s Success

With the need to earn money to provide for our families, it’s easy to fall into the trap of thinking that the more money we earn and the more privileges we can give our children, the better parents we are. We think that if we can provide the best clothes and the best cars and send them to the best schools, our children will have the opportunity to do more in life. And that means we must be doing a good job.

But providing things and opportunities to do is often at the expense of providing the opportunity to become. We all want our children to gain character strengths such as, honesty, integrity, and thrift. Will more money and “things” help them develop important qualities such as these? Not necessarily. In fact, there is evidence to indicate that often the relationship is inverse . . . the greater the money and privilege, the less opportunity many children have to learn character traits that are best taught through sacrifice, cooperation, and the need to prioritize and choose.

In addition, the economic need is only one of four basic and vital needs of all family members. At least equally important are their mental, spiritual, and social/emotional needs. If we’re always away from home—physically and/or mentally—and focused prima- rily on earning money, we may not be able to meet those other vitally important needs.

We would do well, both as parents and as partners, to consider the whole spectrum of family needs and determine whether the extra money is worth the opportunity cost. There is a point at which family members need us more than they need what our money can provide. Working with the family to solve economic concerns may be a far more productive path than buying for them.

As a result of these and other myths, many of us tend to see money as a limited resource. It seems there’s never enough, and we’re always trying to figure out how we can get more. Often, we work long hours. We take on second jobs. We sacrifice irreplaceable time with the family. And frequently, in the end, we discover that getting more money doesn’t necessarily solve the problem.

Probably, most of us would say that deep inside, we know that money can’t buy happiness, and that real peace of mind comes from financial security and not from an excess of “things.” But a fly on the wall would never believe it! What that fly would see is people rushing from store to store or surfing the Internet, charging “wants” as well as perceived “needs,” racking up huge credit card debts, paying interest for years, sometimes arguing with a spouse, bemoaning a lack of funds, and trying to get rid of the headache that seems to come up every time they get a bill in the mail or try to balance their bank statement. An observant fly would be forced to conclude that acquiring “things” is a very high—but costly—value to most people in our society.

^[4]Stanley, Thomas J. The Millionaire Mind. Andrews McMeel Publishing, Kansas City, 2000, p. 4.

^[5]Kiyosaki, Robert T. Rich Dad, Poor Dad Warner Books, New York, New York, 1997, p. 65.

^[6]Stanley, Thomas J., and Danko, William D. The Millionaire Next Door. Longstreet Press, Atlanta, 1996, pp. 8–11.