We hold three misconceptions about money that are almost universal.
The first misconception is: If I had more money, I would be happier. I could move to a bigger house. I could get that new car. My investment portfolio could get to the level it needs to be. I could finally get ahead and not struggle so much. I would have more peace of mind. I would have more free time. I could do what I really want to do—and be happy at last.
The reality is that more money will not give you peace of mind. No doubt you make a lot more than you did on your first job. Is your life more fulfilled because of your additional income? Do you feel freer, more content, more secure, and more alive? Do you have fewer problems now? Do you at last have money figured out? Does more money really bring you happiness? You hope that it does.
The second misconception is: People who make more than I do don’t have money problems. We assume that we are alone in not understanding money. When we see another person who earns more money than we do, we automatically assume that they must have money figured out.
Just because people make more money than you doesn’t mean they are free of the financial problems with which you wrestle on a daily basis. Most people spend up to the level of their income, and their problems follow right along with them. Assuming that your basic needs are well-covered, it makes little difference how much money you make—unless you have a plan.
We are often “insane” about money—we keep doing the same thing over and over again and expecting a different result. Until you have a plan, life is not going to change. It has little to do with how much you make. It has everything to do with your goals and whether your spending is consistent with those goals. Think about it. What is your life all about? Are you heading in the direction of your true purpose? Is your financial plan leading you toward or away from that purpose?
The last great misconception about money is: Someday, one day, it is all going to turn out okay. When people say this to me, I ask them, “Just what is going to happen to make it all turn out? Your next raise? An inheritance? Or maybe winning the lottery?”
I need to tell you this, my friends: Someday it’s not going to turn out—unless you do your part. You’re probably not going to marry the prince or the princess who will bestow instant wealth upon you. You’re unlikely to win the lottery. Your next raise won’t fix all your problems. It’s not going to just work out unless you have a plan that includes your goals and you implement that plan.
What would life be like if you decided to be more satisfied now? What would it be like to have a conscious understanding of money and its role in your life? How would you feel about money if its sole purpose was to provide an avenue to your goals and deeper passions?
We need to better understand the real purpose and potential of money, and how we use or misuse it. Money is simply a medium of exchange. By clarifying our goals, we can put money to work for us instead of the other way around.
The course to success begins by reflecting on why we react and spend as we do, while leaving behind our old beliefs about money. We can then head in a new direction based on knowledge—knowledge founded on where we are and where we want to go. Getting there then becomes a simple matter of steering and adjustment.
If you wish to change your relationship with money, there are three things you must do.
First, gain a clear understanding of how you spend your money and on what you spend it. Second, incorporate your deeper goals into a financial plan and commit to that plan. And third, allow yourself to be satisfied now.
If you are not satisfied with your life, don’t look to money. It will not solve your troubles. Look elsewhere. But where?
Perhaps the ancient Chinese sage Lao-Tzu is a place to start:
Fame or integrity: which is more important?
Money or happiness: which is more valuable?
Success or failure: which is more destructive?
If you look to others for fulfillment,
You will never be fulfilled.
If your happiness depends on money,
You will never truly be happy with yourself.
Be content with what you have;
Rejoice in the way things are.
When you realize there is nothing lacking,
The whole world belongs to you.