Written by Today we’ll be discussing the proverb, You should not hoard your money and die of hunger. We will discuss basically what is the purpose of money? Why we collect it, why we’re interested in it and what we should do with it.
I do believe that we often are spending a lot of time collecting it. And we’re not a hundred percent sure what we’re going to do with our money. And so that’s what we’ll discuss today. Any thoughts or comments that you have share them? And I’d love to read and hear about them.
First and foremost, let’s talk about hoarding. Like why do we hoard things? Some of it is an emotional attachment. Some of it is a fear of being like, oh, I really will need it later.
What is your relationship with money?
And so you’re dealing with two things, I think in most times in life. And the way I’ve heard it described is you’re either running towards pleasure. Or you’re running away from pain and money is one of those relationships as well that we often overlook that we want our money to help us to feel good.
And sometimes that feeling, we don’t think really much deeper than just the knowledge. That’s like, Hey, I need money. That money is going to alleviate a lot of my current stresses. I don’t have to worry about my bills and nobody has to call me if I have enough money that I don’t have to work. If I don’t want to, or I could work in a different job and maybe not be paid the same, but I enjoy it so much more where we really end up putting as a society money on this pedestal.
And when we put money on this pedestal, it naturally makes you think, well, that’s what I’m trying to get. I’m trying to get the money. And then once I have the money, then my life should be better. And so as a result, most people don’t really discuss the spending part, like why I collected the money.
Why do you want money?
So I believe the knowledge is like, okay, I know I need money. I need money to pay my bills, keep my lights on, keep the car running, things like that. But we don’t get to discuss as often the understanding, why do I want this money? What am I going to spend it on? You know, how much am I going to spend and make sure that I still have some where I’m comfortable, where I don’t have to worry about all the stresses of money.
I do want to eliminate the financial stress. But at the same time, I also want to know that my money is generating something for me. And we talk about that with the passive income, and then most people, your largest expense is going to be your retirement. It is funding your ability to not work for a long period of time.
And as a result, we end up putting money aside because we’re like, okay, if I have enough money sitting aside, then there’s nothing that will mess me up. So we end up eliminating financial stress as just having this vault filled with money that we can swim in anytime we want.
What am I getting this money for?
And so we hoard the money. So I encourage us to always start with the understanding, what am I getting this money for? why do I want this money? Do I want to pay for my kids’ college? travel more? Do I just want to not have to work in the stressful job that I have? And then let’s put an actual number.
That way, most of us were stressing because we’re like, okay, I need to be like a millionaire, so they don’t have to worry about money. That could be true. But you may find that you don’t have to actually get that amount. You maybe you could just become a multi thousandaire.
If you actually write down the things that you want, then you can say, okay, this is what total two. And put that a certain amount. And then you can then go a step further and say, okay, this is how much I would need in reoccurring income. This is how much money I would need consistently coming in so that I can maintain this lifestyle that I can’t accomplish.
Take an accurate count
The goals that I have for me and my family and that number more times than not is going to be lower than just the number that you’re thinking of, because we’re often thinking, okay, if I just have, like I said, my vault full of money, then I won’t have to even think about it. Well, the truth is if we spend a little time thinking it in the beginning, then we don’t have to really think about it either.
So when you talk about your understanding, why you want your money, that’s where you start at. I want the money and then you list the things that you want. I encourage you to get to 50, if you can. And I talk about that in the wisdom metric framework, where we talk about just designing your life, structuring your finances.
Design your life and set your goals
If you design your life, if you write down all the goals that you have, I’ll then encourage you to say, okay, from there, which goals would I want to accomplish in one year? Which goals would I want to accomplish in three, five or ten? Or if it’s just more than 10.
And the way I’ve heard the example put is if you have a jar and you have like Boulder, small pebbles and sand, you know, how would you fill the jar, you have to put the boulders in first because that’s the only way they’re going to fit. So you have to put the pebbles in.
And they have to put the sand in third because the sand fills in every look and cranny, the boulders have to go in first, if you put the pebbles in or the sand in first, the boulders won’t fit and what they represent in your life is your overall goals that you have, like life goals. So you really only have like two or three of those, just things that will take your whole life to accomplish essentially.
Short, Medium, and Long Term Goals.
You have some goals that are medium. That maybe those goals just need a good five year plan. And then you have your short-term goals, which are, I’m going to say are one to three year goals. If you spend all of your time focusing on your short-term goals, an example of the one that I struggle with and I’ll just write, put myself on French street.
You know, I like my house to be clean. I just like the feeling of a clean house, mom was big on doing that. She has instill that in me having a dirty house it’s like, my mind is cluttered. Like I have to have a clean house so that I can then have a clear mind. And so, as a result, I would end up spending the first several hours of my day making sure the house is clean. So I then could start my my day.
Well, I end up running out of time. So I have the clean house at the beginning of the day. But as you know, when you have like kids and stuff, your house is dirty by the end of each day. So if you have to clean your house at the beginning of each day, then you ultimately end up kind of wasting away several hours each day, and then you don’t get that feeling of the clean house for very long.
When you have kids now, we’ve shared the load now. The kids do a lot more as far as the chores and they’re able to help a lot so that I’m able to make sure I focus on the things that I need to get done, but also at the same time that I have that clean house feeling, that I do feel like I perform better in.
Take a step back
And so I had to take a step back and be like, okay, Dre you know, cleaning your house. That is a very short-term goal. The long-term goal that you need, that’s where you should start each morning. The numbers and the studies show that you’re peak somewhere. It says like maybe like three or four in the morning that your brain is like optimal.
If you went to sleep at a decent time and then around noon, it kind of teeters off. And then from there, it pretty much like, kind of goes downhill, just decision fatigue and I talk about that in my book champion of change.
You have to design each day in a way where, okay. I only have 24 hours in a day and Oprah has the same 24 hours, the rock has the same 24 hours. And someone who lives in poverty has the same 24 hours.
What am I doing with that time?
And you have to say each day, I’m going to accomplish something towards my life goals. I’m going to accomplish something towards my medium goals. And then I’m going to accomplish something towards my smaller goals, but I have to spend some time on my long term goals each day.
So when you know exactly what you want, then you won’t be hoarding the money because you have a place that the money’s going to go. You have allocated it and you are intentional in your life. And so as a result, now, you don’t have to hoard anything. Most of the time we hoard things is because we just don’t know exactly what tomorrow’s going to hold.
So we’re like, maybe I don’t need it tomorrow. If you design your life in a very intentional way. Sure. You won’t know exactly everything that’s going to happen tomorrow, but you’ll be more comfortable spending the money because the money is already put away for tomorrow. That is to say you’ve already put the money away for emergency.
Final thoughts
You’ve already put the money away in your passive income fund. You’ve already put the money away in your retirement fund. All that stuff is already taken care of. So the money that’s left, you can comfortably say, okay, I can spend that, that money can go towards my short term desires and needs.
I just want to stop and buy that or wear that which looks really good and drives really nice. I just want to buy that because you’ve already allocated the money first towards your long term, your large, your medium term, your medium goals and then your short term. Which is just the kind of things that you like without having to think about it and really that ultimately is what you want to do.
You don’t want to be hoarding your money because you’re not so sure about tomorrow that you forget to feed yourself today, that eating quality food is important.
Resources:
Image from Freepik.com