Make
Money By Making Peace With Money
Do you know anyone that is
totally comfortable with their relationship with money? Talking
about money is a social taboo. And we often avoid looking
at our financial issues when we are by ourselves. Money is
our culture's most loaded concept. Many people are more comfortable
talking about their sex lives than their financial issues.
Wealthy, poor or making ends meet, rarely is anyone satisfied
with their financial position.
Becoming empowered in your
relationship with money requires both inner work, like clarifying
values and goals, and outer work, like establishing a financial
plan and investment or savings options. This article is designed
to explore both the psychological and practical aspects of
money management.
The Meaning of Money
Objectively, money is a concept
and a resource.
Money is an abstraction, a
symbol—"just a piece of paper. " In some cultures
it is rice, metal or other substances which equate to value
and meaning. In and of itself, money has no meaning.
Money is a medium of exchange—a
standard or common denominator when exchanging goods or services.
We perform services or sell goods and in exchange we are given
money.
Money is energy—a fundamental
resource. It can be used as a tool to help us get where we
need to go. It needs to be channeled and invested. Because
it is energy, when left to its natural rhythm, money flows.
Because we have assigned so much cultural meaning to money,
it takes on a life of its own.
Money Is a Mirror
Psychologically, money is
a mirror. We have projected onto it our most inner desires,
our deepest fears and the elusive things we hunger for. Some
of the qualities we have projected onto money include:
Money is power. It carries
with it the ability to influence other people. How people
hold and use their power varies. For some, having money means
"I am better than you." Others choose to use money
as a way to do good works in the world.
Money is safety and security.
It enables people to meet their basic needs for survival:
food, shelter and protection. Our mainstream, corporate culture
presents other "necessities" which require money:
to play in this social sphere you need a car, computer and
education.
Money separates people. Throughout
civilization people have differentiated between the "haves"
and the "have nots," the upper class and the lower
class. Money can cause rifts in families and throw long-standing
friendships into question when one friend greatly changes
his/her financial position.
Money is all the things we
want in our heart of hearts. Some of them are elusive: "money
is freedom," "money is happiness," "money
can bring peace of mind," and "money is love."
Money is a responsibility.
For some, this responsibility is a burden. Managing money
takes a lot of time and energy.
Money is opportunity. It is
an enabler. It opens doors. For some, money is freedom. Money
is acknowledgment—reward for one's labors. In theory
it says you are making a contribution to society. It is society's
way of recognizing the individual's contribution.
Money is an obsession. Some
can never have enough. They are driven to acquire more and
more out of fear of losing it all and becoming poor like parents
in the Great Depression. When we forget that money is a projection
screen and not a guaranteed path to inner peace, we are in
danger of chasing a "false god." People become addicted
to the pursuit of money. This pursuit can break up marriages,
wear down health, and still never end. All the money in the
world can't fill the void people feel inside. In essence it
is a spiritual void.
Overall, the issue of money
is complex. Rarely do people say that "money is fun."
If money is indeed a mirror for our culture and the times
we live in, the charge around money brings a strong message.
Today many of us are alienated from our deepest values and
from other people. More and more people are asking "what
is the point of it all?" We work longer hours and yet
have less time to enjoy the fruits of our labors. Many people
who "have it all" by society's standards find that
having gotten there, there is no "there" there.
How Much Money Is
Enough?
The key issue with money is
not how much you have, but how you relate to what you have.
Some of the happiest and in some ways "richest"
individuals do not have the highest salaries or the largest
quantities of money. They are people who use their money in
ways that follow their values, are able to save toward future
goals, and who do not need to be validated by the quantity
achieved but rather by the quality of it's use. Getting caught
in a cycle of "I never have enough" creates a trap
that impedes the essence of life.
I like to answer the question
"how much is enough" by saying "whatever I
need to do the things I really care about." The answer
is different for each person. If you have children, it is
different than if you are childless. If you enjoy living a
fairly private life in the country, it is different than if
your sense of purpose takes you traveling around the world.
At different times in our lives, we may find different answers
to this question.
In trying to answer this question,
it is important that we look to our hearts a well as our minds.
What we think we want may not be what we really want or actually
need. Learning to become honest with oneself takes time and
courage. Some steps you might want to take h help you answer
this question include:
Giving yourself permission
to have what you REALLY want. Many of us suffer from a lack
of entitlement. We do not ever let ourselves consider what
we REALLY want for fear that we can't have it, don't deserve
it, aren't worthy of it or would be bad or greedy to want
and have it. Unless we have experience being validated for
what we want is hard to validate ourselves. The danger here
is that if we never let ourselves consider what we really
want, we will waste our resources and energy. There's a saying,
"you can't get enough of what you don't really want."
We can only be happy if we learn to be kind to ourselves.
Letting go of old baggage.
This goes hand in hand with giving yourself permission to
have what you really want. Once you are clear about what you
want, you can get rid of old things you don't need and make
space for the new. These exercises quickly move beyond money
and material possessions to other aspects of life we want
or need to let go of. As you start cleaning out your closet,
you might find yourself examining the quality of your hobbies,
your friendships, and the ways you spend your time. You may
find yourself exploring how you live and how you take care
of yourself. Your entire life may feel lighter as you let
go of all parts that no longer serve you.
Living simply. Whether this
means a meager or an elegant lifestyle, one can still live
simply. Articulating your values and then basing your actions
on them helps simplify your life. If you are not a particularly
materialistic person, you may find your greatest joy in nature.
If you love beautiful possessions, you may find yourself choosing
a few special pieces rather than having lots of mediocre ones.
Find things that will stand the test of time—make possessions
high quality and lovable. Hoarding comes from fear of not
having enough, and this puts us in an unbalanced state. It
doesn't serve us or others. Nature provides enough for all
its children. If we think this way and take just what we need
then it will be true.
Staying grounded. After defining
what you truly want and need, keep a journal of what money
goes in and out. Are the things you are spending your money
on consistent with your values and goals? If not, make adjustments
in your behavior. How much money do you really need to do
the things you really want to do? Your journal will give you
the date you need to answer this question. As you add up the
different expenses, you will learn exactly what it costs to
be you. Some expenses may be reducible. 0thers may be fixed.
How does your income relate to your outgo? Is there any money
you are putting aside for the future through savings? How
are you balancing today's needs with tomorrow's? These are
all questions that will help you be more grounded with money.
Making Money Work
For You
A financial plan is a plan
to organize and invest your resources to take you where you
want to go, whether that is comfortable retirement, a new
career doing work you love, buying your dream house, sending
children to college, making a charitable gift to an organization
or leaving an inheritance. The first steps to developing a
financial plan are to define your souls and take stock of
your resources. Most of the hard questions are not mathematical
problems but questions of philosophy, values and strategy.
For instance, how to balance
having a career and raising a family is certainly not a question
of dollars. No matter how much money you have, this balance
can be problematical. But an accurate assessment of your resources
can help you make an informed decision about how much you
need to work and how much to stay at home raising a child.
Likewise, taking stock of your resources will en- able you
to know what it would mean in dollars and cents to change
careers, move to a new city or even leave a relationship.
There are no right answers.
A professional financial planner
can help you undertake this task, working to develop a plan
that will allow you to realize your goals and affirm your
values. This process may also help you confront unrealistic
expectations about how far your resources will carry you.
Defining Your 'Make
Money' Goals
If you could create your life
the way you really wanted it, what would be your financial
goals? You can think of things you want in the short-term
(6-12 months such as purchasing a new computer), medium term
(2 - 5 years such as buying a house or financing kids' education)
and the long term (like retirement and estate planning), and
make a list of each. You can then estimate how much money
YOU will need to achieve each of your goals. For example,
a new computer requires $2500, purchasing a house will cost
$200,000 and requires a 20% down payment and to retire on
an income of $50,000/year requires $1,000,000 of capital invested.
Setting goals is a very personal
process based on your values and interests. Do you wish to
live simply and at a slower pace than our mainstream culture
requires? Do you want to help preserve the earth's resources
for future generations and only consume what you really need?
If your answer is yes to either of these questions, the amount
of money you need will be smaller than if you aspire to the
1997 [2001] version of the American dream: a new car, a big
house, fancy vacations, and designer clothes. If you have
a passion for a hobby like sailing or skiing, you will need
more money than if your passion is to take walks in the woods
and draw pictures of trees or write poetry.
Are you a person who wants
to work hard for a while to have more time and freedom in
the future? Are you a person who wants to live moment to moment,
and not over focus on twenty years from now? Are you a single
parent wanting to provide the highest quality of life possible
for your children and wondering how to trade off time with
your children and material things? Do you believe the best
"insurance" is the way you take care of yourself,
body, mind, and spirit over time?
What feels most important
in setting your goals is knowing what really matters to you.
We can starve ourselves emotionally, spiritually and materially
no matter how much money we accrue. Likewise, we can nourish
ourselves in those same ways if we can really listen to our
hearts and let the amount of money we pursue follow from our
truest desires.
Taking An Inventory
of Your Assets and Liabilities
Having set your goals, you
need to take a close look at your current financial situation.
Are you a saver, a spender or some of each? Have you been
putting aside money for the future in the form of savings,
investments, real estate, a pension plan, life insurance or
a will? Do you need to pay-off past debts in order to pursue
current and future goals? This inventory may also suggest
changes in spending and saving habits in order to give you
the money you need to invest toward your goals.
Regardless of your income,
you can plan. Everyone should try to save money that can be
tapped for emergencies. Two months salary is generally recommended
for this purpose. Check into retirement or savings plans at
work (which can lower your taxable income) or set up a self-employment
savings plan for yourself.
Paying off credit card debt
with high interest payments is also a priority. It is hard
to get a 16 to 20% return on your money, and that is often
what credit cards charge you for your unpaid balance. Once
you have some basic financial planning in place, you can begin
to look at investment portfolio options.
Tools That Can Help
You Make Money
There are conventional investment
vehicles you can choose to put in your portfolio, including
stocks, bonds, and mutual funds. You may also own real estate,
precious metals, art and other collectibles. Most people have
to save a part of their earnings on a regular basis to build
this portfolio. It's important to remember, the higher the
potential return, the greater the risk.
One of the most important
tools for building your portfolio is regular savings. The
earlier you start saving, the more time your money has to
grow and the more time you have to build your net worth. If
you enjoy reading up on investing and are willing to take
responsibility for managing your funds, you can educate yourself
to decide what belongs in your portfolio. Even if you decide
to manage your investments, you may wish to consult a financial
planner, to help devise a strategy for the portfolio and to
evaluate individual companies or funds. For those who find
investing too detailed or too scary, a financial professional
can work with you to build a portfolio that meets your financial
goals.
Unconventional Investments
In addition to building the
kind of investment portfolio we've just described, investment
can also take on a less conventional flavor. You may choose
to invest in yourself. This can include massages, yoga classes,
healthy foods, psychotherapy, acupuncture and personal growth
workshops. By using a percentage of your funds for self-care,
your might hope to realize the long-term returns of better
health, deeper self-knowledge and inner peace.
Investing in yourself might
also include letting yourself pursue something you feel real
passion for but can easily put on the back burner because
it isn't a necessity. For example, if you love beautiful craftwork
you may choose to allocate money to purchase one or two beautiful
pieces each year. If you love cooking, you might choose to
invest in a really good set of pans to cook with.
Other unconventional investments
might include putting your money into causes or small businesses
that are doing things you believe in. You may choose to investment
in solar power or wind power or support sustainable agriculture.
You may choose to become a shareholder in a small business
that makes ecologically sound products. You may or may not
expect to get a financial return from these kinds of investments;
however, the investment will be the empowerment of using your
money to create a better society for everyone.
Still another unconventional
investment is creating your own business. You may wish to
pursue a great idea, work at home so you're with your children,
get rich or live simply and reduce your dependence on the
corporate lifestyle. You may need to invest time and start-up
money into your business, and have enough savings to carry
you through the first couple years of start-up.
Socially Responsible
Investing
Socially responsible investing
has become popular for people who are concerned as much about
the companies in which they are investing and what they are
doing as the financial return they are getting from their
investments. Socially responsible investing screens out companies
that have practices you don't want to support or don't approve
of. You may not want to invest in companies that manufacture
tobacco products or weapons, that discriminate or pollute
the environment. Or you may seek out companies that produce
products that improve our society.
It is the belief in the social
investment community that there is a double bottom line. If
a company has practices that cause harm, then it will have
liabilities that will hurt its profits through litigation
or legislation. If a company mistreats its employees, then
it will eventually lose their loyalty and productivity levels
will fall. Just as with investing in general, you should be
able to receive a competitive return if you implement a professional
investment strategy.
Insurance
When people hear the word
"insurance" what comes to mind are associations
such as "fine print," "can't trust" or
"don't understand." Why do we have such negative
connotations about something that is actually simple and potentially
useful?
Most simply, insurance means
protection against loss. Some kinds of insurance are mandatory.
When we buy a new car, we cannot even drive it out of the
showroom without a certificate of automobile insurance. We
buy our first house and we must purchase an umbrella protection
insurance policy to indemnify us against loss due to theft,
burglary, and other people's injuries while they are visiting.
Other kinds of insurance offer financial protection for us
and our families. Health insurance can help prevent catastrophic
monetary loss due to personal sickness or injury. And life
insurance is designed to keep our families together if we
die. In the insurance business there are two sayings: "the
premium isn't the problem—the problem is the problem"
and "people don't plan to fail—they just fail to
plan." Insurance can be seen as an investment to protect
your goals. When you insure your goals, then they can be accomplished
even if you are sick and unable to work or if you have died
and are no longer here to see the end of your dreams.
Creating a Conscious
Relationship With Money
Our goal in writing this article
is to provide you with some basic tools—inner and outer—to
help you build a conscious relationship with money. Unless
you are already financially independent, you trade off your
time and life energy in order to acquire money. Having an
understanding of what money means to you is critical in determining
how to make money work for you so that you can direct your
energy into making sound investments to support you in meeting
your personal goals.
Authors Details: Make Money By Making
Peace With Money.
Linda Marks (Steve Fahrer & Barry Goldwater contributors)
LSMHEART[at]aol.com |
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