You should know by now that money is just a convention and its main function is to solve the “double coincidence of wants”. We already talked about it in the latest post of this 30 days writing challenge.
But how do you treat money once you have it, once it’s somewhere in your business accounts and it starts moving around, following invoices, budgets and so on?
Is money a goal by itself? Something you strive for? Or it’s just a resource that you use in order to reach other goals?
The answer to the questions above is that money is both.
And this is probably the most confusing thing about the whole concept.
Knowing Which Sides Of Money You’re Looking At
Being able to shift your outlook, from goal to resource, and back, based on the current context, is one of the most precious abilities you can acquire, as an entrepreneur. Or at least that’s what I believe based on my own experience. This ability is especially helpful in one of these "below the line" decisions you have to make: if you judge things correctly, the ship will keep sailing, if not, well, the decision was "below the line" so the ship will go down.
Especially in the beginning, when the “gravity” of money is bigger, it’s difficult to detach yourself from that pull and keep a lucid approach. Many of us are entering into this entrepreneurship adventure pushed by the desire to have more. As long as you know your limits, there's nothing wrong with wanting to have more. If you have more, you can also give more. But if you focus only on that, you will handle money in a very limited way. There's a very subtle balance between treating money as a resource (focusing on spending it) and treating it as a goal (focusing on accumulation).
One way of strengthening this ability is to ask a very simple question, every time you need to interact with money (buying, investing, saving):
“Where am I right now and how this will help me long term?”
At first, it will feel awkward. “I just have to pay the damn salaries, what’s with this stupid question? I just need to.” It’s perfectly right to feel like that, until you create the habit. In time, it will get better and asking this question will unfold a whole new string of other questions. Continuing our example, these questions may be: “Am I paying enough salary to these people? Am I getting enough work from them? How much salaries are taking from my entire budget?”. The more you ask, the more interesting the answers will be.
Slowly, you will grow this awareness, this clarity about how money comes into the business, from where it gets out and how “oiled” the mechanism is. You will start to understand when you need to think in terms of “money as a goal” and when in “money as a resource”.
More often than not, in any business, “money as a goal” is a legitimate approach. There are certain levels that you need to reach, in terms of financials, and when you are on that path, you should keep your focus on them.
But often times money is just some fuel for making things happening.
One More Thing
Focusing too much on the “money as a goal” approach can create serious issues, especially long term. Everybody asks you: “how much money do you make?”. In my experience, when seeing money as a goal, you have a hard time working with it. When you look at it like a resource for building more value, it becomes much more manageable.
But, as I said, it all depends on the context.
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This post is part of a 30 days challenge on business, you can find the entire list of articles here.
I'm a serial entrepreneur, blogger and ultrarunner. You can find me mainly on my blog at Dragos Roua where I write about productivity, business, relationships and running. Here on Steemit you may stay updated by following me @dragosroua.
