Beliefs About Money
By Steve Gillman
I occasionally write on beliefs about money in my various
newsletters and on my websites. It is fascinating to me how many
things are believed, both consciously and unconsciously, about
money and financial matters, and yet how rarely these beliefs
are examined. Today I want to look at limiting beliefs that keep
people from succeeding. We can see that there are many ways to
succeed financially, and many of those ways are not that difficult
to teach. But that isn't enough in many cases, and the problem
is often in the things we think about money and making a profit.
For example, some people feel or believe on some deep level
that money is "dirty" or "immoral," even
if they don't express that thought consciously. If you suspect
that unconscious feelings and beliefs like this may be holding
you back, you may need to change your mind. Let's start the process
of change with the following explanation. Hopefully it will create
a new perspective for you.
How Is Wealth Created?
People often misunderstand how money or wealth is created.
You can see this in the belief that wealth is limited, as expressed
in the saying "a piece of the pie." But in reality
wealth is not necessarily like a pie to be divided up, and it
is very important to understand this.
If the wealth of the world was like a pie, if it was a set
amount, then of course everything you gained would be at the
expense of others. A pie can only be split so many ways after
all. And it certainly wouldn't be a very nice feeling to get
a bigger piece if it meant that an equal share of suffering fell
onto others. The guilt that this idea causes may get in the way
of many people's success. There are also many horrible public
policies that result from this pie metaphor, because it's based
on an ignorance of basic economics.
Now for the good news: This idea is mostly false (almost no
idea can be expressed in a way that is 100% true or false). Wealth
is not a static quantity of goods or money. It is something forever
imagined and re-imagined in the mind of man and then created
in the world.
The average poor person in America today has flush toilets,
hot water in the shower, and often a car. These are things which
were unknown to the wealthiest individuals of centuries past.
This is not meant as an argument against the reality of poverty,
but as a reminder that things have gotten better. In fact, there
is no unresolvable problem that prevents the whole planet from
someday being wealthy. Poverty rates have already been declining
for generations now, and it is entirely possible that someday
poverty will not exist. Muhammad Yunus, the founder of Grameen
Bank - which has lent billions of dollars to millions of poor
people to help them develop businesses - agrees with this idea.
He has suggested that there will come a time (possibly in this
century) when extreme poverty will be something we see only in
Obviously there is more wealth now than in the past. Let's
take a closer look at how that happens.
Suppose a potato farmer learns how to produce twice as many
potatoes in the same amount of time and with the same land, using
new techniques or machinery. Suddenly there is more wealth in
the world, and it wasn't at anyone's expense. If another person
creates art, the potato farmer now has more potatoes to trade
for it, or to sell to make money to buy that art. Both men are
now richer. If a house cleaner buys tools and chemicals that
make him more efficient, he makes more money for his time when
he cleans the home of the wealthy potato farmer. He, the farmer,
and the makers of the tools and chemicals are all wealthier as
a result. This is the essence of wealth creation and distribution.
Wealth is created. When you understand the value that you
help create, you will feel better about it, and the result will
be a change in thinking that changes your future. Even in areas
that seem to be zero-sum games, like buying and selling a house
for a profit, you are often creating value: You are helping a
seller and a buyer get what they want.
As long as you do not use force or fraud to get what you want
in life, you generally have to create value to become wealthy.
If there is no value created, no person has a reason (nor an
obligation) to give you money or other good things in exchange.
By definition then, if you conduct yourself honestly, and you
get rich, you have created great value in the world. Start with
that as the basis of what you believe about money.
More Beliefs About Money
Here are three questionable beliefs or feelings about money
that are fairly common. I also have included an alternate perspective
you might replace each one with.
Money Is Bad - It can be used for evil or good. Focus
on examples of the latter to change your perspective. Oh, and
the Bible says "The love of money is the root of
all evil." Putting money ahead of one's spiritual salvation
is the issue. Regardless of faith, you can see that there are
things more important than money. That's a good reason to make
some; to help us with our higher values. Here is a better belief:
Money Is a Powerful Tool and I Choose How to Use It
Money Is Scarce - A pervasive and useless idea, as
discussed above. Wealth is created, and as more real things are
created, more money is printed to represent these things. Money
is more abundant now than ever before, because there are more
ideas than ever, which has lead to an abundance of creation of
all sorts. Look around and you will see that there is no scarcity
of money. Here is a better belief: Money Is Abundant
Business Is Dirty - Some see business as taking advantage
of people, and many particular businesses do act in unethical
ways. But this does not mean that doing business is itself unethical.
Fortunately, when businesses do cheat employees or customers
they often suffer the consequences. Consider the salesman who
is "so good he could sell ice in the arctic." No matter
how persuasive, he will probably sell that ice just once, and
then suffer the consequences of not properly serving others.
Business serves people, and profit is the reward for doing
it well. When a company doesn't properly serve consumers, it
usually fails unless governments exclude competition or require
people to purchase their products and services. To succeed, a
business serves customer's interests as defined by the dollars
those customers choose to spend. Even when done only for profit
a free and fair market forces companies to think of how to best
serve others. If one company does not offer what people want,
after all, people do not have to buy their products, and another
company will very likely find a way to serve those potential
customers in order to make money from them.
Business should be all about honesty. As it is, not all players
are honest, but we often learn about the dishonest ones when
their companies dramatically fail. But in general honesty is
very good for bringing customers back again and again. In other
words it is profitable to treat customers well, as good business
The products and services we value, from medicine to wonderful
music to paper and food , are provided by businesses. Business
people had to use their minds, money and resources to figure
a way to provide what we need, and all that is asked for this
service is a price we are willing to pay. Yes, willing, because
if not, we wouldn't pay it, right? So when you think of business,
try to see it as the noble pursuit it often is and always can
be. Here's a better belief: Business Can and Should Serve