Defining Your Relationship With Money
I write about medicine here, specifically urgent care medicine. But I spend even more time talking about money. The reason for this is that I recognize a strong relationship between the quality of work one can do as a doctor and the financial situation the person is in.
Working Without Needing The Money
This relationship might be more apparent to you if you imagined for a moment what it would be like if you had all the money you needed right now and were still who and where you were in your life. Your first thought might be “I’m getting out of this career today!“. You may even take some time off to recuperate from years of non-stop work. Likely, after some time, you will miss some things about working as a doctor. It might come in the form of wanting to interact with colleagues again, helping that occasional patient out, keeping up-to-date on the science of medicine and maybe even wanting to keep up your skills.
If you decided to go back into medicine while fully financially independent you likely will do things differently. No more late night shifts, no more working your tail off to keep up with the volume, no more trying to please the management and you may even practice less conservatively. No more 10-12 hour shifts. You would work enough to be helpful but not so much that you would feel exhausted.
Money’s Value, Beyond Work
But your relationship with money goes beyond your work. Many of our daily decisions are based around money, how much something costs, what it might do to our net worth, and how it would affect our retirement date.
Some believe they don’t care about money, they feel neutral about it. Perhaps this is a genuine emotion as in they don’t put any value on it in order to give it less power. Others hate money, they can’t wait to get rid of it as soon as they obtain it, they perhaps fear it. Others love money, they hoard it, they want more of it, to them it may have intrinsic value.
Living Without Needing Money
In order to put your relationship with money into perspective let’s imagine for a moment that you had so much money that you no longer needed to make decisions based on how much something cost. This is hard to grasp for most of us, but assume for a moment that your assets runs so deep that 3 of your financial advisers guarantee you that you could buy 5 islands a year and still wouldn’t run out of money. Or just imagine you have a money genie.
Again, you’ll probably quit your job with this new sense of freedom. Your first thought might be that you are going to spend so much more time with your kids and significant other. You now will pursue all the things you have been so passionate about all these years. You will help your family and friends with their financial trouble. You will eat at the nicest restaurants, you will get a personal trainer and you will write that book you never had time to write. You will take vacations whenever you want, and buy homes in each corner of the world.
Let’s think this true. Your kids still need to go to school so you would have the first part of the day to yourself, just because you are no longer making decisions based on money doesn’t mean the rest of the world runs without it. You may get those painting lessons and guitar lessons at home every day followed by your own private yoga instructor. You still would need to find time to practice these new-found hobbies, your time budget didn’t change unfortunately in proportion to your financial budget. The hours you have off you could spend with your SO but how much of your partner could you truly tolerate before some frustration sets in… nothing wrong with your partner, but everyone needs a balance.
Next, you get your realtor to buy you a house on a Greek island, you buy a house in Fiji and you buy a gorgeous mansion in Southern France. This of course is accompanied with a ton of paperwork that needs to be filled out followed by hiring people who will take care of these properties. You might be able to get a power of attorney to ease the paperwork, get an estate manager to handle everything but they still need someone to report to. And oh my, if you are a poor communicator then you better be ready for some disasters. Nevertheless, you manage to find the time to visit every one of these new homes in the first year but you have friends back home still that can’t get away from their life and as for your kids … they still need to learn algebra and they have their own friends they want to see.
At home you may have a yoga instructor coming and going, a private chef, a few butlers (are they still called butlers?) and a chauffeur. However, soon a time will come when you are tired of having so many strangers come in and out of your house. You likely also used an agency to hire these people since you aren’t going to do all the background checking yourself so several times a month your chef will be replaced with a fill-in and that brings even more strangers into your house.
When you get bored with doing all these things for yourself you start reaching out to friends and family and try to help them out. Suddenly, you realize that there is only so much money you can throw at family/friends before they start either demanding more or feeling inferior to you which leads to a whole different set of problems.
Inevitably, after a few years of this, you likely will fall back into a routine that’s quite familiar to you. You will wake up, make your own coffee, see your kids off to school, make a new dish perhaps you saw in a new cookbook and spend time on a new project (which happens to be staffing orphanages in Mexico with volunteer doctors). This is no easy task but you love it and by the time you have made your calls, sent out the emails it is time for your massage which you decide to push-off because your partner wants to meet you for a late lunch before the kids get home.
Money And Happiness
Back to the question, how do you feel about money? Do you believe it’s your key to finding happiness? Is it able to set you free? Is it capable of bringing you closer to your family and friends? Can money create more time for you to do the things you always wanted to do?
Money is sort of like food. You certainly can’t do without it (don’t over think it). You want a lot of it, but you need only so much of it. Too much will hurt you and the quality of the money is much more important than the quantity.
Money As A Tool
If you use money as a tool it can bring you great satisfaction. A tool is only useful in the hand of a craftsman and that tool needs to be taken care of but it’s only a small cog in the wheel of the end product. If you can use money to create your financial independence then I believe you have made the best use of money. This is no easy task, it isn’t always a set dollar amount that someone can determine for you.
If you ask “I am married with 3 kids and I hate my job, I don’t want to work another day in my life, and I want to stop working today and forever at my age of 35, how much money do I need to accomplish this?” then you are not viewing money as a tool, you are viewing it as a savior, you are looking for something that will save you from your current situation. For this person there is no answer, not $500,00, not $2 million, and not $10 million. No sum of money can create what this person is looking for.
You certainly can’t hate money if you are going to use it as a tool. You need to understand it, appreciate it and hone it. You need to learn more about it and realize what it can and what it can’t do for you in the society you live in.
To be more specific, if you live in the States money can create a passive income for you if you invest it in stocks and/or bonds. It could also support your lifestyle if you decided not to invest it and just kept it in a savings account but of course it would no stretch quite as far. Money can be used to purchase an annuity which will give you a set payment every month until a certain age or until your death. Money can be used to buy a business that will likely generate an income or it can be used to buy rental properties which, with some management, will also generate income.
You would want to learn how your money can be saved in either tax-deferred accounts or taxable investments so that you can get the most value out of your money. This is what I hope to show you on this website. It’s just my way of working with money and there are a ton of more ways of doing it. There are far more aggressive ways of handling your money which likely will create a higher return and a few more conservative ways. I am not trying to tell you what to do with your money because I am not trained as a financial adviser and am fairly new to the game. However, what I do with my money over the years should leave a nice trail for someone to learn from. Some things will work, some things won’t.
I want to create a stash of money that will grow on its own through my investments in the market. I want to then learn enough skills in life that I can generate income through various means (diversification) which decreases my reliance on that initial stash and also increases my margin of success. So I view my savings as a stepping stone to allow me to comfortably work on the various things in life. I may decide to do consulting, coaching, writing or teaching. There are endless ways of generating extra income. We all have talents or interests that we can develop which can then be monetized.
Why Money Has Nothing To Do With Happiness – For Me
The last thing and perhaps the most important thing about money that I would like to mention is that I don’t associate money with happiness. So, when my friends feel sorry for me because I live in a small apartment without a car and spend little on traveling it is because they think I must be making a sacrifice or be unhappy. It took some time, but I realized that a 3 bedroom house up on a hill doesn’t make me any happier than my small apartment in a nice part of town. I traded a large house for a great location. I realized that not having a car will improve my health, my mental state and save me money. I decided to move to a city (Portland) that allows me to live without a car quite easily. I also realized that flying on a packed plane for many hours just to get to a crowded destination and rushing through multiple tourist sites wasn’t my definition of happiness. I have tried to align my needs with what is best for every being around me. I decided to be vegan (which happens to save me money on my grocery bill and may save animals from suffering) and I decided to get rid of the car (which saves me a ton on car expenses and decreases pollution) and I decided to not travel on a jet airplane multiple times a year (which helps my pockets and decreases my carbon footprint).
I encourage you to build a healthy relationship with money. Create various scenarios and sit down and think them through, what can money really do for you? If happiness is what you are after then do what makes you happy – don’t over analyze this, just do it. If you hate money (you can’t hold onto it to save your life) then explore that and heal that relationship. If you love money then you aren’t reading this post and are a master of accumulating it. If you want to use money as a tool then start learning about what it can do for you and you can start living your life instead of waiting to be rich or waiting to retire.
What is money able to do for you right now? And what is it you would like it to do?
Do you recall a time when money made you really happy or made you truly sad?