One of the more common laments I hear about money is, “How can I take charge of my money?”
But how can you take charge of your money when most of what you think about money is just superstition?
It seems reasonable to assert that if you want to create mastery in your relationship to money, you first need to, at the very least, understand its basic nature. But most of us don’t.
We all have strongly held beliefs about money, but most of us have no idea what money actually is.
Here are just a few things we think are money, but are not:
Cash is not money—cash is just a representation of money. More and more retailers these days don’t even accept cash as payment.
2. Bank account balances
Money is not the numbers you see in your bank account, that’s just bits and bytes.
3. Credit cards
Your credit card does not physically contain money.
Nope. Not money.
Just paper you can exchange for #1 or #2.
As it turns out, we can’t actually ever see or touch money.
Because here’s what money is: Money is just a promise, delivered in measurable units, that can be exchanged later for something you want, value or need.
And I submit to you that that is the ONLY thing that is fundamentally true about money.
But we don’t live like that, do we?
Instead, to grapple with money’s conceptual nature, we all make things up about money and believe them and live like they are true.
Once belief is operating it acts like a kind of programming language upon which all your money behaviors are built.
I call this your Money Operating SystemTM, and you can’t do anything about it until you understand that it is now installed and in charge.
Your Money Operating SystemTM has now been installed as the context of your entire financial landscape. The amount you save, the amount you spend, whether you invest, how you invest, how you negotiate for a salary, and how you feel about all of that is informed and controlled by that overarching belief that you, unwittingly, installed.
Your Money Operating SystemTM came from your past, it got created in one of your first formative experiences with money. Think about your early memories of money. It’s totally obvious, and, simultaneously, it’s not easily discovered.
When you go looking for it, it’s like the air that you breathe or the water that you swim in about money. It’s how things always go.
It is a basic statement or assertion that you not only believe to be true, it defines and limits what is possible in your relationship to money.
Your Money Operating SystemTM is pre-coded, like your DNA. It determines how you access and interact with the wider world and how you do all things financial.
Here are some of the Money Operating SystemsTM I see most frequently:
1. There will always be enough money
People with this belief can be high earners, sometimes they are salespeople or their compensation is somehow performance based.
But sometimes they’re average earners who live simply, so they just don’t realize how much money they actually need to save, and they need to be careful about being lulled into a false sense of security around money.
For example, I once met a man with this Money Operating SystemTM who had just retired at age of 66 and was totally confident about his financial security. He only needed $50,000 a year to live on, so he was shocked when I told him that the $120,000 in his savings accounts was likely to fund only a few years of retirement income.
He believed that there would always be enough money, but didn’t stop to check the reality.
2. If I am good, the universe will give me what I need
So, while this looks like a positive world outlook, it doesn’t tend to lead to productive financial behavior.
Saving and investing rarely happen, because these folks believe that their financial health is a function of virtuousness.
There’s often some kind of formative religious beliefs existing in conjunction with this Money Operating SystemTM, which can mean that financial behaviors are in bad symbiosis with overarching ideas about religious doctrine and good will.
3. Money makes me valuable
These people have money very intertwined with their self-worth.
Other people often perceive them as powerful around money and business. If they are successful, their ego and confidence grow with their bank account.
If they are unsuccessful at producing results, their confidence suffers and can often spiral down.
Interestingly, I when I discovered my own Money Operating SystemTM, I found that I had two running my show. This was one of them.
4. There will never be enough money
This one is pretty self-explanatory, and people with this Money Operating SystemTM will either be over-spenders or under-earners.
This actually was my other Money Operating SystemTM and it created terrible dysfunction in tandem with “Money makes me valuable”.
It’s really unfortunate that I ended up with two belief systems that so obviously contradict one another, because as I was manifesting “There will never be enough money” by overspending my high income, my confidence was plummeting because I didn’t have money to prove my value.
5. Money is bad/the root of all evil
These folks conflate social problems with a capitalistic society. They find virtuousness, if not righteousness, in living without a lot of material possessions, and are really successful at finding evil rich people to vilify.
Their negative opinion of money causes them to take active steps to reassure people that they are apathetic about having money in their life, which leads to destructive financial behavior.
Again, these are just some of the Money Operating SystemsTM that I’ve discovered through working with my clients and discovering my own.
I’m a 3, 4, combo, and I have both Money Operating SystemsTM working simultaneously, all the time. Yours might be something different.
Whatever it is, the core of it will be in very basic language because you created it as belief and could understand it when you were a child. You may have something very sophisticated sounding that you say to yourself or other people now, but that’s always on top of something really elementary.
And your brilliant mind is very effective at not only gathering evidence for what it believes, but at creating situations that reinforce it.
So you’ll have complex patterns of behavior and dialogue that keep these situations in place. You have a network of behaviors, often unconscious, that produce results that reinforce your belief and appear as evidence of your belief.
Just like any other kind of dogma, your Money Operating SystemTM is a belief system.
Systems inside of systems inside of systems multiplied by seven billion.
And just as a sidebar, given all these very different ways of being around money, is it any wonder that money is one of the leading causes of divorce? Can you imagine how awful it is for the people involved if “There will always be enough money” gets together with “Money is the root of all evil”?
For the most part, our Money Operating SystemsTM aren’t serving us well.
We can hardly even talk about money.
We can hardly talk about it, but we need a lot of it:
It takes roughly 20 times your annual income in savings to retire adequately. So, for example, if you want to replace $100,000 in income during your retirement, you need about $2,000,000 in savings.
That number doesn’t take Social Security into account, but it’s a good working number.
But this year, just under 20% of households aged 55 to 64 reported having no retirement savings or pension. In the same study, 25% of respondents said they had no idea how they’ll pay their expenses in retirement.
Not having enough savings to support yourself in retirement means living on limited, if any, income, and in some cases feeling like a burden to family, friends and society.
Inadequate savings translates into and experience of having extremely limited choices around healthcare, lifestyle and activities.
Definitely not the picture of golf course tours and trips to Europe we see in the press.
Despite technological advancements and being at the world’s highest historical standard of living, we are still spending more than we make.
We are grossly underprepared for retirement, and policy shifts make it seem more and more likely the cost of this underpreparedness will, at least in part, be shunted off to younger workers. Yes, I mean you.
When you get ahold of your Money Operating SystemTM, though, you can dethrone the unwanted king of your financial kingdom.
Once you accept that money does not mean about you what you think it does, you can release negative beliefs and experience more confidence and peace of mind.
When you can see the Money Operating SystemTM for what it is, then you can begin to act conscientiously, and consistent actions over time can produce miraculous results.
If you heed the lessons of your own psychology, with proper planning and execution, you can experience the miracle of compound interest and achieve your financial goals.
In the comments below, tell me, what do you think is your Money Operating SystemTM?