Money is Only Worth its Spend

Many years ago I had come across a truism I liked: “The riches of a person are reflected in how they spend their money, while their wealth may be measured by how much they have.”

There are many sayings I’ve heard about ‘the color of money is the same’ regardless of where it comes from, but over the recent years I’ve realized that the ‘quality of money’ can be established too.  I did think of the sources of wealth, some honorable, some dishonorable.  I thought of the names we give to sources of funds, and to heads of expenses.  Nothing seemed to pass all tests until I hit upon a very useful test for the Quality of Money.  The quality of money depends on what it is spent for, what it makes happen, or what causes it funds.

Spend vs Invest

When we speak of spending money in different ways, the question also pops up “Money can also be invested, how is that different from spending money?”.  A simple difference to understand between spending and investing money is to see that money that is spent, is consumed, it doesn’t return in any way except to sustain the status Quo.  In this regard, money is time, and vice versa.  Money invested however, returns manifold, or should return manifold if the investment is accompanied by attention, industry, and doing what it takes to meet the objectives of the investment.  In this way, money that is invested returns bigger, stronger, better over the time that we pay attention, are mindful, and industrious.

The Need and Money

In the bigger picture money gives us time, say by providing sustenance, shelter, and security for another few days/weeks/years, and we make our decisions of how to spend this time.  If we are blessed with fortune and wisdom, we invest this time to return stronger, better, bigger.  Which of our needs do we fulfil first with the money we have, defines a lot about the quality of money we have.

Mapping to Maslow’s hierarchy of needs also gives some great insights into the quality of money that we spend or invest.

Examples of money spent or invested at various levels of Needs

Level of Need Spend Invest
Need for Self actualizationPracticing all what we are able to do, what we truly know.In Self – mind, body, soul
Need for recognition– Fees paid to enter competitions– Self improvement
– Excelling at meeting useful objectives
Need to belong– Socio-Cultural alignment (lifestyle)
– Fees for club membership
– Attending social events
– Build relationships Networking
Security needs– Maintain a house to live in– Educational qualifications
– Monetary savings and investments (stocks, banks)
– Agriculture
Biological needs– Food Shelter from natural elements

We can review the Quality of our Money, and what we are likely to achieve with it, by appropriately mapping our expenses to the needs, and classifying them as spend or investment.  This review of what we are likely to achieve with the time and money that we expend, can give us insights into how we should change, if required, our spending and investing strategies.

It is important to note that Time is a significant factor that affects the quality of money.  At different times, different needs become virtuous. The amounts of spend and investment at the various levels of needs will also change with time for each of us, across different phases of our lives – from child, to adolescent, to adult, with a family, through professional phases, etc.

What is the Quality of Your Money today?

— O —

Requirements?

Understanding & Developing Project Requirements

Requirements –> Strategy –> Plan –> Execute –> Evaluate

These are the five keys for successful project execution. Understanding requirements is probably the most important key because if requirements are not understood correctly right from the beginning, the entire project can lead to a solution way off target. Apart from wasted time, resource, and money, this leads to a dissatisfied and frustrated customer.

The most common trap in understanding requirements is to stay with what we already know, what we have experienced in the past, and look for the most easily apparent solution, rather than the problem which the customer is experiencing. In this case it seems we would be looking for a lock when we already have a key, or simply putting the cart before the horse.

Understanding requirements from the customer’s point of view requires empathizing with the customer, their situation, their needs and wants, their challenges and their aspirations for success. Reading and re-reading their problem statement is something we need to do often, even after we have started developing the solution strategy. Staying with the problem and thinking about it long enough is key.

As we begin developing the requirements, the simplest proof of whether we have understood the problem correctly is to paraphrase it and see if the customer still resonates with our description of it. We progressively detail the problem articulation and successively involve the customer in responding to potential solution strategies with their pros and cons. If the resonance sustains through the design stage, we have the problem(s) identified and isolated.

Re-statement of the problem and getting concurrence from the customer on what it is, as well as what it is not, gives us the clear starting point from where we can start strategizing on the possible solution sets, and paths to them.

— O —

Beyond the SWOT – the ESHF Framework

Enjoy, Suffer, Hope, Fear (ESHF)

Human beings are peculiar phenomena.  More than ability and logic, our decisions and actions are defined by our emotions and feelings.  Dan Areily has written about how our irrationality sets us apart.  Jonathan Haidt, and other psychologists preceded Dan in researching how this leads to creativity and to our happiness.

The ESHF Framework can help us become aware of the motivation and velocity we are moving with.  Projecting into the future Horizons (near/far/distant) we can take charge of our journey towards the goals that are important for us.  We always achieve what we want!

ESHF for:  _______________________________________________

E-njoy

Horizon

S-uffer

Horizon
NO
S

A

R

NOSAR do I enjoy working towards, thinking about, helping others for>

1/2/3 NO
S

A

R

NOSAR do I suffer (tolerate) working towards, thinking about, helping others for>

1/2/3

H-ope

Need

F-ear

Need
NO
S

A

R

NOSAR do I hope to have achieved, thought through>

NO
S

A

R

NOSAR do I fear will come in my way, or bring me pain>

* N: Needs; O: Objectives; S: Specifications; A: Activities; R: Results (Requirements)

— O —

Time, and Time again…

The only value we add to time, is what we gather from it.

Time would pass still, though we would not gain from it if we didn’t pay attention and attempted to gather more, to understand more from its passing.

An example will make it clearer.  Say we are managing a two month project.  As the project progresses over the two months, if we don’t try to understand what the project goes through we will have no reason to do any differently or better on our next project.  We wouldn’t have managed this project if we couldn’t benefit from the numerous learnings it could make possible.  If only we looked for them.

To have managed is to have gained from the time we spend in any environment.

Competency, Performance, Achievement, Growth

Over time we all realize that the most important competency we need is the competency to assess competence. Without it we have no hope of leveraging the unfathomable potential of humans towards any achievement, and we become limited in what we can achieve ourselves.

In the beginning of our contributing and being useful in life, we contribute with our own achievements, driven by our own competencies. As we achieve more in response to the perpetual need to achieve more, we reach the thresholds of our own limitations. It becomes imperative then to be able to help others achieve more with their competencies, to stay together on the growth path, growing in what we achieve together.

We shall soon explore how competencies lead to achievements, what are the intermediate stages and steps, and how we can direct them better.