Beliefs About Money
Money
Matters
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I cover beliefs about money more than once in this newsletter
and on the website. This time 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 business.
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 nothing 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 with its ignorance
of basic economics.
Now for the good news: This idea is 99% 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 cable
television and hot water in the shower - things which were unknown
to the wealthiest individuals of centuries past. In fact, there
is no unresolvable problem that prevents the whole planet from
someday being wealthy. Poverty rates have already been declining
for a while 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. He has suggested that
there will come a time when extreme poverty will be something
we see only in museum exhibits.)
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 using the same time and 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. Understand the value that you help create,
and you will feel better about it, and the result will be a change
in thinking that changes your luck. 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 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 ones 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. Better belief: Money
Is A Powerful Tool
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. Better belief: Money Is Abundant
Business Is Dirty? - Some see business as taking advantage
of people. Customers are treated unfairly at times, but that's
a recipe for failure. 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. Soon after he will
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
fails - unless governments exclude competition or require purchases.
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.
Business is about honesty. Not all players are honest, but
we often learn about the dishonest ones when their companies
dramatically fail. Honesty is very good for bringing customers
back. In other words, it pays, as good business people know.
The products and services we value, from medicine to wonderful
music to paper and food , are provided by businesses. Someone
had to use their mind, 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 is and can be. Better belief:
Business Serves People
As mentioned I will cover more beliefs about money in future
issues of the newsletter and on the site.
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