How You View Money is How You Invest

Do you hold your money tightly or loosely? Do you dream about the possibilities your money could offer or do you lie awake at night fearing its loss? In essence, do you see money as a launching pad or a safety net?

To an entrepreneur, money is a bridge from idea to product. The new creation is what’s important, what it will do to improve lives or make the world a better place. To a capital allocator like Warren Buffet, money is a lever. Left lying around it is useless until it can be astutely employed to leverage the resources of a business into far improved levels of productivity, profit, and growth. To a banker money is inventory. To a consumer, it is a thing less valuable than the thing he or she wants to buy with it. And to a poor man, money is the difference between home and homelessness.

Notice in the preceding paragraph that as we transition from one example to the next, how differently money is viewed. To the entrepreneur and the allocator money is a tool. As we move to the banker and consumer it becomes more commodity-like. Finally it becomes treasure-like for the poor man, guarded and even hoarded. Notice too how the productivity or the compounding effect of money declines as we move through the viewpoints.

A similar continuum can be used to describe how people invest their money. Those who fall somewhere close to the Tool side use money to reach goals and aspirations. In other words, plans and goals occupy their most productive thoughts and imagination, much like an artist with a painting. The tools of her craft are important, but once selected and prepared, they become a mere vehicle for creating a work of art, not allowed to encroach upon her creative imagination or energy.


On the other extreme is the Treasure side of the scale. Folks over here spend much of their time checking balances, comparing returns, and often losing sleep when markets turn sour. Some of these folks chase returns constantly looking for the best performers while others scour the local banks and credit unions for the the best rates on CDs. These investors spend little time thinking of goals or plans beyond worrying whether their money will last as long as they do.

Then there’s the middle, the fat part of the curve as statisticians would call it – the status quo – where the American consumer resides. He and she busily consume all kinds of goods and services including thousands of financial products designed to appeal to them. These are not financial entrepreneurs creating products and services to make their lives any better. Rather they are status quo companies  marketing commodities to the broadest, largest and most profitable part of the financial services curve.


Characteristics that distinguish people from the financial status quo are their abilities to create, to imagine a better present and future and to plan for it. These are folks who are aware of their priorities, who take time to set goals and revisit them often. They track their progress and they stretch their goals when opportunities allow or new ideas demand. These are our clients and we like to think of ourselves as not only their financial advisors, but their financial entrepreneurs.