The Four Masteries of Money, part three (#683)

(If you missed parts one and two, you can read them here and here)

Thus far, we’ve talked about the two masteries of money that most people who struggle with money claim to struggle with – creating it and accumulating it.  This week and next, we’ll move into two of the subtler masteries.  Without next week’s mastery, it won’t matter how much you earn or how much you keep because it will continue to mysteriously disappear.

Without this week’s mastery, it won’t matter how much you earn or how much you keep either – because you haven’t yet made it matter…

The Third Mastery:
Using Money

I’ve always suspected that the first official “financial” transaction between nations involved the trade of several chickens for a goat, and that both nations (or what we would today consider to be “tribes”) had members who violently protested that “our chickens are worth way more than their goats” and vice-versa.

Far fetched though that may seem, compare it to this highly-abridged history of currency in the modern world.  In some ancient Oceanic cultures, conch shells were used to facilitate the exchange of goods and services, as people “shelled out” for food and lodging.  Later, workers in the salt mines of Mesopotamia were paid in salt, or “salarium”, creating the first “salaried” workers and no doubt the first grumblings of comparative salt envy.

As trade grew more complex, and it became completely impractical to carry shells, salt, or even chickens in your purse for barter, precious metals began to be the universal currency, leading to the establishment in the 19th century of the gold standard system that enabled easier international trade.

In the last 70 years, what we call “money” has changed forms again, and the coins and paper we carry around are no longer backed by gold but rather by faith – our faith in the government’s ability to continue to back our currency at a comparable level to other government’s ability to back theirs.

So if what we use as money has progressed over time from chickens to shells to salt to gold to faith, what exactly is this money stuff that seems to have everyone all worked up?

Well, one answer is “whatever we make it up to be”, and while this is essentially true (see the launch of Brixton’s own internal currency last month as a startlingly modern example), it might be useful to create a shared definition, at least for the purposes of our conversation through these tips.

So here is what I’m talking about when I use the word “money”:

Money is a practical tool created to facilitate the exchange of goods and services.

When viewed in this way, much of what we believe and/or worry about money becomes nonsensical.

One of my favorite money experiments, which I first came across in the book “Money Freedom” by Patricia Remele, involves substituting the word “shovel” (another practical tool) for the word “money” into many of the most limiting beliefs and ideas that are present in our culture.

Here are a few of my favorites…

  • The love of shovels is the root of all evil
  • It takes shovels to make shovels
  • Shovels don’t grow on trees
  • Shovels are a corrupting influence in our society
  • He is better than me because he has more shovels than I do; he is worse than me because he has more shovels than I do

So if money is just a tool, how do we decide where to place it in the hierarchy of values of our life?  In the grand scheme of our lives, how important should money be?  How do we evaluate the value of a tool?

The answer is surprisingly simple: by its suitability for the job we are using it to do.

How valuable is a hammer?

If we are looking to pound nails into wood to construct the frame for a house (or stakes into the ground to hold up our tent), incredibly valuable.  If we are looking to  turn a screw, screw in a lightbulb, or get a table at our favorite restaurant, not very valuable at all.

How valuable is a paintbrush?

If we want to change the color of a room or forge a copy of our favorite Picasso, indispensable.  If we want to learn how to dance or go traveling to the South Seas, utterly useless.

How valuable is money?

It depends entirely on what you are trying to use the money for.

Here are some of the most common things people attempt to use money for with a few of my thoughts on the relative value of money as a primary means to that end:

1. Using money to get security

In Supercoach, I tell the story of a client with a net worth of nearly 600 million dollars who told me that he woke up every morning wondering if today was going to be the day that he lost it all.  In my research into the differences between miserable millionaires and happy ones, it quickly became apparent that financial security doesn’t come from the amount of money in your bank balance, it comes from your ability to create more of it whenever you want.

In this sense, money is as poor a substitute for the mastery of creating as the handle of a screwdriver is for a hammer.  You can sort of get the job done with it, but it won’t last forever and it won’t necessarily work for you when the going gets tough.

2. Using money to get power and/or freedom

Any time you attempt to create an internal experience (power, freedom, etc.) through external means (accumulating a certain amount of money), you are bound to struggle.

There is a famous story of Alexander the Great’s encounter with the ascetic philosopher Diogenes.  When Alexander asked Diogenes what he could do for him, Diogenes’ only request was that Alexander step out of his sunlight so he could continue to enjoy the day.  So impressed was Alexander by this encounter that he is reported to have said “Truly, were I not Alexander I would have wished to be Diogenes.”

What did the most powerful man in the world admire about this poor philosopher who lived in a barrel (literally) by the side of a road?  He was as free to live his life on his own terms as Alexander himself.

While it is certainly true that you can use your money to influence the actions of others, it cannot ultimately take away from the ultimate power within each individual, what holocaust survivor Viktor Frankl called  “the last of the human freedoms – the freedom to choose.”

3. Using money to save time

One of the interesting things that came from my research is that happy millionaires don’t value money nearly as much as they value time. While many people will spend hours and hours to try and save a few hundred dollars, the happy millionaire will (happily) spend hundreds of dollars to save a few hours of their time.

4. Using money to get stuff and/or experiences

This is the specific use money was actually designed for – to facilitate the exchange of goods and services.  Using money to get experiences (like a great vacation or an amazing seminar 🙂 or stuff  (like food, clothing, and shelter) is the equivalent of using a hammer to pound a nail.

Which nails in particular you choose to pound (and of course which experiences and stuff you choose to use your money for) is a function of what you’ve decided is important.  And as always, the most important choice you make is what you choose to make important.

5. Using money to get money

The comedian Jerry Seinfeld used to do a routine about why he wasn’t an investor:

People always tell me, you should have your money working for you. I’ve decided I’ll do the work. I’m gonna let the money relax. Youknow what I mean?

‘Cause you send your money out there – working for you – a lot of times, it gets fired. You go back there, “What happened? I had my money. It was here, it was working for me.” “Yeah, I remember your money. Showing up late. Taking time off. We had to let him go.”

While many people in the current economy could find cause to agree with him, there is no question that one of the ways you know you have mastered money in your life is when a certain portion of your money is working to earn more money for you while you sit back and relax at home.

The only danger with getting too caught up in the investor mindset is that it is easy to lose sight of what the money is for – that is, why are you seeking to accumulate more money in the first place?

If it is for greater security, power, or freedom, well, as the disclaimer always says, “the value of your investments can go down as well as up and cannot be guaranteed.”

If, on the other hand, it is to purchase a more diverse set of stuff and experiences for yourself and others and your experience of the creation is a joyous one, well, the more the merrier!

6. Using money to give hope, possibility, and a chance for a better life

Most books I have read on charity or philanthropy talk about the value of giving of yourself, rather than of your money. While there is no doubt that giving of your time, energy, and attention can be a wonderful gift to both yourself and your community, what nobody ever talks about is how much fun it is to put your money to use, even if you don’t yet have very much of it!

Each December, we give money to each of our kids with the instruction that they find a way to use it that will create a better world for others.  Last year Oliver used his to support Breast cancer research; Clara used hers to support a children’s hospital and 6 year old Maisy split her money between a charity that prevents cruelty to animals and one that builds schools in impoverished areas because she couldn’t believe there were kids who didn’t have the chance to go to school.

Over the years I have given away as little as $10 to feed a hungry child and so much to one organization that they thought we were joking, but in both cases the fun we had doing and the sense of contribution it engendered were the same.

So whether you’re struggling to make ends meet or pretending you don’t have ten years worth of savings put by and need to continue to struggle, consider borrowing this line I wrote on the back of my checkbook nearly twenty years ago:

“A portion of all I earn is mine to give away.”


1. Write down the amount of money that you would love to create in the year ahead. Now, spend that money in its entirety – that is, write down exactly what you will use every penny for.

By doing this, you transform money from an object to be hoarded back into a tool to be used. And while a great workman may love his tools, he’s unlikely to ruin his (or anyone else’s) life in order to get more of them.

2. If you knew that a portion of all you earn was yours to give away, who would you want to give it to?

Make your list, get out your checkbook, and write out a check today.

I once asked a particularly persistent fundraiser what the smallest amount I could give was that would make a worthwhile difference to her cause. She replied, “Even if it cost us more to process your gift than the amount you gave us, it would make a difference to our cause because by giving us money, you are enrolling your heart.”

Have fun, learn heaps, and use your money wisely and well!


Related Articles

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I’ve always suspected that the first official ‘financial’ transaction between nations involved the trade of several chickens for a goat, and that both nations (or what we would today consider to be tribes) had members who violently protested that ‘our chickens are worth way more than their goats’ and vice versa…

The Four Masteries of Money, part four (#684)

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