Making Money Consciously
How important is money? How much is enough? Is money a distraction from one’s spiritual path? Is it a necessary evil? Is it unfair that some people have more money than others? Is poverty more noble than wealth? Is it possible to become an enlightened millionaire?
Even among highly conscious people, the subject of money is a contentious topic. As an individual you’ve probably wrestled with this subject on many occasions. Social attitudes towards money are so incongruent that it’s no wonder people are confused.
Is money a positive resource or a consciousness-lowering distraction?
Like most people I grew up with mixed associations about money. In some ways money was a good thing; in other ways it was a necessary evil or a distraction from what was really important.
On the one hand, I saw evidence that money was good. It’s not hard to recognize that money bestows certain advantages. Some problems can be solved by money very easily. Money can provide food, clothing, shelter, heat, transportation, education, technology, entertainment, medicine, and so on. Given the way our society currently functions, if you have a lot of money, you have a lot of solutions. Money surely won’t solve all your problems, and it can create new problems of its own, but on balance it’s safe to say that money is a powerful problem-solving tool.
I think Earl Nightingale said it best:
Nothing can take the place of money in the area in which money works.
On the other hand, there are some things I don’t like about money. I don’t like that it’s used as a gatekeeper for certain “privileges” like proper medical care, healthy food, or decent educational resources. I also don’t like how it induces people to behave dishonorably to attain it. While I admire the achievements of today’s titans of industry, many of them acquired their wealth through means I couldn’t stomach.
Conflicting beliefs about money
For most of my life, I’ve been stuck with incongruent attitudes towards money. Objectively, material wealth seemed like a great thing — I should definitely pursue it. Subjectively it seemed like a giant distraction — why should I need it? Intellectually, wealth seemed good. Intuitively, wealth felt irrelevant. I hadn’t yet figured out a way of thinking about money that was congruent across multiple perspectives.
Have you been struggling with a similar internal conflict? If so, you’re certainly not alone because this conflict is largely the result of social conditioning. We have some influences telling us that money is very important, while other influences tell us it’s not. Look at what happens during the holiday season. Advertisers tell us to spend, spend, spend. The more money we spend, the better our holidays will be. Buy your wife an (inherently worthless but nonetheless expensive) diamond necklace, and she’ll love you forever. On the other hand, we might watch a classic holiday movie like It’s a Wonderful Life that tells us we need to keep money in perspective and that relationships are far more important. Mixed signals abound.
This social conditioning affects our relationships too. What assumptions do you make about people based on their income or financial assets? If you know someone’s financial status, but you’ve never even met him/her, do you prejudge that person by assigning other qualities that may or may not be true? What assumptions would you make about a millionaire? About someone who’s totally broke? How would you feel dating someone who earned 10x as much as you? How about 1/10th as much as you?
I believe these mixed associations lead many conscious people to conclude that money itself is the problem. Maybe it’s better to find a way to live without money at all… at least cut its presence down to the bare minimum. If money is truly a distraction from conscious living, wouldn’t the most conscious choice be to shun money altogether? Maybe give up your worldly possessions and join a monastery?
Within the scope of religion, money often plays a confusing role as well. Supposedly Jesus wasn’t a particularly wealthy individual, but today’s Catholic Church is as wealthy as they come. According to United Nations World Magazine, the Church has several billion dollars in gold alone, and when you consider their massive worldwide real estate holdings, their artwork collection, and their tax exempt status, the amount of wealth controlled by the Catholic Church is staggering. While figures are hard to estimate due to the complexity and scope of the organization, some believe the Church is the world’s wealthiest entity, with the Pope controlling more financial assets than any corporation or government on earth. Whether that’s true or not, the Church’s wealth certainly makes for an interesting contrast with the life Jesus supposedly lived. When it comes to your financial future, should you model Jesus or the Pope? Or someone else entirely?
We could go deeper into the quagmire of confusing financial beliefs, but I don’t think that would be helpful, so let’s put the social models aside for now and take a fresh look at money to see what role we would have it play in our lives.
What is money?
Money is a social resource — the primary social resource. Money has no inherent value of its own, but we assign it value through social agreement. If I give you $100, you can withdraw $100 of value from society. The only reason this works is that we agree by consensus that $100 has a certain value. If we all agreed that money was worthless, then money would have no value whatsoever.
Because it’s a social resource, money isn’t a perfect medium of exchange. The value of anything, including money itself, is determined by social consensus. That may be the consensus of just two people, such as when you buy an item from another person. Or it may be the consensus of a large group, such as when you buy or sell stock in public companies.
When your personal valuation roughly matches the social consensus, you’ll conclude that pricing is fair. When your personal valuation drifts from the social consensus, you’ll conclude that certain items are either over- or under-priced.
Although there will be serious consequences for doing so, you’re free to opt-out of the social contract of money. Most people would find this totally impractical, but you can choose to assign no value whatsoever to money if you wish. However, if you still want to take advantage of social resources, you’ll need to create your own social contracts on a case-by-case basis. This could include barter or other forms of exchange, or it could involve leveraging relationships to meet your social needs.
For most of us, the social contract of money is far too advantageous to ignore. While the monetary system is far from perfect, it’s more efficient than the alternatives. By assigning a monetary value to our social exchanges and by making it easy to transfer money from one person to another, social trades are performed with relative ease. Buying groceries, going to work, using electricity, or connecting to the Internet are all examples of social trades, and by social consensus, all of these are reducible to money.
Even money itself can be assigned a price, as anyone in debt can readily attest. If you want money today, you can purchase it by pledging a greater amount of money tomorrow.
So money is essentially social credit. It’s an IOU from society, enabling you to extract a certain amount of social value whenever you want. The more money you have, the more society owes you, and the more value you can extract.
How to earn money
Let’s consider what it means to earn money. Since money is a social resource, earning money means acquiring more of that social resource. When you spend money, you convert money to value. But when you earn money, you convert value to money.
One way to earn money is to sell possessions. Take an item and sell it, and you’ll receive money for it. Another option is to acquire items at one price and turn around and sell them for more than your costs. Companies dig up resources all over the planet and sell them for a profit. For individuals this approach might take the form of buying objects, stocks, or bonds at one price and selling them at a higher price. Sometimes value is added in the process (which may just be added convenience), while other times the money earned comes from market inefficiencies.
Perhaps the most common way to earn money is to sell your time. Get a job and trade hours for dollars. The greater your ability to personally deliver a high social value, the greater your earnings potential. The difference between making $10/hour vs. $100/hour is that the latter work has much greater social value. This difference isn’t anyone’s “fault” — the difference is due to the social consensus about the value of certain work. Note the difference between absolute value and social value. Top athletes may not perform useful work in an absolute sense, but their compensation is based on the social value of their service, which is currently very high.
Another way to earn money is to create a system that earns money for you, such as a business. This is my personal favorite, since it can provide far more leverage than selling time. I also find it much less risky in the long run, since owning and controlling a money-generating system is more secure than trading hours for dollars at someone else’s discretion.
You can also earn money by selling money itself… aka investing. By loaning your money or assets to someone else, you can earn interest and/or dividends. How you earn money depends on what you invest in. Investing in a new business is very different from investing in a criminal organization. One form of investing creates social value; the other steals it.
And of course a final option for making money is to steal it. Historically this has been a popular option, but I won’t give it serious consideration here.
If you think about it, there are two basic ways to earn money:
- Make a social contribution, and receive payment commensurate with the social value of your contribution.
- Take advantage of market inefficiencies to extract money without contributing any value.
Option 1 includes getting a job, running a business that provides products or services, reselling items with value added, or investing in any of these outlets. Option 2 includes reselling items without added value, gambling, mooching off others, crime, or investing in any of these.
Here’s another way of labeling these two strategies:
Unless you’ve somehow opted out of the monetary system, you’re using one or both of these two strategies right now. One strategy will likely be dominant in your life — either you’re creating genuine social value and being paid for it, or you’re mooching off the value created by others.
Note that #1 is essential for the monetary system to survive and thrive, but #2 is not. The only way moochers can survive is by extracting value from the contributors. But ultimately someone must contribute, or there can be no value for the moochers to extract.
Incidentally, Ayn Rand wrote a fascinating novel called Atlas Shrugged about what would happen if the world’s contributors left to form their own society, leaving the moochers to fend for themselves. The contributor society became a paradise, while the moocher society fell to pieces. Rand suggested that a system that rewarded moochers at the expense of contributors was evil and that contributors should be free to decide how their work is used (and whether or not they will support any moochers).
Some degree of mooching is to be expected. Children mooch off their parents. Those who are unable to contribute mooch off those who can. Whenever we enjoy the fruits of someone else’s labor without paying for it, we’re mooching. We all mooch off the hard work of our ancestors. But eventually we have to decide whether we’re going to continue to mooch for the rest of our lives or begin making a genuine contribution. Will we remain moochers for life, or will we become contributors?
Obviously your life will include some contribution and some mooching, but what’s your primary strategy for generating income today? Do you contribute social value? Or do you mooch off the value of other contributors?
Let’s consider both possibilities.
The moocher mindset
Opting into mooch mode means you’re extracting more social value than you’re contributing. Your focus is on getting as opposed to giving, so you take more out of the system than you give back. The moocher mindset suggests you can always rely on others to pick up your slack. It’s the mindset of unearned entitlement. Since you still need to extract value such as food, clothing, and shelter — value which others must provide for you — you live at the expense of others. Your burden may be shouldered by an individual such as a parent, or it may be shared by society at large, but either way you survive by suckling the social teat.
Sometimes mooching becomes so habitual it’s easy to overlook. Many people who seemingly have contribution-based careers harbor an underlying moocher mindset. They aim to extract as much social value as possible while contributing as little as possible. They work to make money to the degree it’s necessary, while mooching as much as they can get away with. Such people don’t have inspired careers because work is only seen as a means to an end, not an outlet for genuine contribution. Take a look around and see if you can identify the moochers in your life. Who is there to get rather than to give?
Another name for the moocher mindset is the scarcity mindset. Since you aren’t creating value of your own, the money you extract must come from someone else. It’s a zero-sum game. Whatever you gain, someone else must lose.
The moocher mindset makes the attainment of financial abundance very difficult because in order to succeed financially with this mindset, you must embrace certain values that most people would consider negative. Your gain is someone else’s loss, so getting rich requires taking advantage of more people. In order to gain by mooching, someone else must cover your extraction with real value. So the more wealth you accumulate, the more you steal from others.
Most people can’t handle the thought of becoming wealthy at the expense of others, so usually the moocher mindset gives rise to self-sabotage instead. If you fall into this pattern, you’ll experience a love/hate relationship with money. On the one hand, you may want more money, but on the other hand, you may feel disinclined to make too much, since you know that the more money you get, the more someone else has to pay for it. For example, if you make a living as a professional poker player, then you know that the more you earn, the more money others have to lose… not the best motivation for a highly conscious person to achieve financial abundance.
Some people are able to bypass this problem of financial self-sabotage by lowering their consciousness. They learn to make money without rationally considering the consequences of how they’re earning it. They invent justifications to explain their actions while keeping their awareness from getting in the way. Ultimately this is the mindset of criminals.
The more you align yourself with the moocher mindset, the more difficult it will be for you to experience financial abundance and remain conscious. Ultimately you have to choose one or the other: be conscious or be wealthy. You can’t have both if you subscribe to the moocher mindset. If you find yourself stuck at a certain level of income and unable to go any higher, an underlying moocher mindset is probably the culprit. This is the mindset that leads you to ask, “How can I get more money?” instead of, “How can I contribute more value?” It’s also the mindset that says it’s a bad idea to earn more money, since your gain is someone else’s pain.
The contributor mindset
Now let’s consider the contributor mindset. This mindset recognizes that the best way to make money is to provide fair value in exchange. Create genuine social value, and receive payment commensurate with that value. Due to market inefficiencies, sometimes you’ll be underpaid, and sometimes you’ll be overpaid, but the basic idea is that you earn money by contributing.
If you want to earn income as a contributor, you must contribute social value, not personal value. Many would-be contributors get stuck on this concept. Personal value is whatever you say it is — you’re free to decide what has value to you personally, and it doesn’t matter if no one agrees with you. Social value, however, is assigned by social consensus. If you believe your work has tremendous value, but virtually no one else does, then your work has high personal value but little or no social value. Here’s the key point: your income depends on the social value of your work, not the personal value.
If you want to generate income from creative work, then your work must have social value. There’s no getting around that. No social value, no income. If your skills and hard work are not in alignment with the creation of social value, then you will not be able to generate income as a contributor.
This isn’t an unfair system — it’s just how the monetary system works. Since money is a social resource backed by social value, it makes sense that you won’t get paid much for providing something of little or no social value. The saying “Find a need and fill it” certainly rings true, assuming we’re referring to a social need or desire.
This web site, for example, has a fair degree of social value. Whether you or I value it as individuals is financially irrelevant. It successfully generates income because the overall social consensus is that this site has a certain level of value. And that social value makes it possible for the site to generate income. If there was no social value to this site, there would be no income potential.
Another name for the contributor mindset is the abundance mindset. This mindset says that wealth can be created from ideas and action. Your gain is a reflection of the social gain you’ve contributed. If you want to earn a high income, you must contribute a lot of social value. The more social value you create, the more money you can earn. This is a win-win mindset because you’re putting value into the system for the benefit of others.
Under the contributor mindset, you receive money as payment for your social service. The money you earn is society’s way of saying, “In exchange for your valued contribution, you are hereby granted the right to extract $X of value from society at a time of your choosing.” This is a beautiful thing!
The only real limit on your income is how much social value you can create. If you want to earn more money, then develop your skills and talents to facilitate the creation of lots of social value. The best way to increase your income is to figure out how to deliver more social value. Focus on giving, and the getting will largely take care of itself. The systems to reward social service are already in place, so all you need to do is plug your service into the existing marketplace.
Generating income from social contribution is a very positive experience. Consequently, it won’t lower your consciousness like the moocher mindset. With the contributor mindset, wealth and consciousness are not in conflict. In fact, they synergize extremely well, especially if you reinvest some of your income into expanding your contribution.
If you adopt the contributor mindset, just be aware that members of the moocher mindset will sometimes mistakenly count you among them. As you work to increase your social contribution and thereby earn a higher income, moochers will project their values onto you, concluding you’ve become greedy and must be taking advantage of others for personal gain. Don’t let moochers dissuade you from your path though. Let your inspiration come from the desire to provide even more social value. It would be less honorable to withhold your value just because others misinterpret your motives.
Pro bono contribution
Under the contributor model, you always have the option of making a contribution pro bono (i.e. for free). You don’t have to receive the full social value for your work if you don’t want to.
I like having this option because it means I can make my work accessible even to those who can’t afford it. This web site represents a tremendous personal investment of time and energy, so it certainly isn’t free from my point of view. But because I can leverage technology to keep my costs low, it’s practical for me to provide abundant content without requiring an access fee for every visitor. Paying for the value received is entirely optional and is left to each individual visitor to decide for themselves.
Money is social credit, so when you decline to receive money for your work, you decline the social credit you’ve earned. While it’s perfectly fine to decline the social credit you’ve earned, be sure to consider what you could do with that social credit if you choose to receive it. Could you re-invest it to make a bigger or better contribution? If so, then paid work makes more sense than pro bono work, since you can use the money to expand your mission and serve even more people. Money makes you more of who you already are, so if you’re already a contributor, more money can allow you to expand your contribution.
You can also aim for a nice balance between paid work and pro bono work. It doesn’t have to be either-or.
Making money consciously
Contributing social value is the primary strategy for making money consciously, but by itself it’s still not enough. The problem with social value is that your personal values won’t perfectly align with the social consensus. I’m sure that if everyone on earth were like you, the demand for certain products and services would shift dramatically. For example, if everyone were like me, fresh fruits and vegetables would have even higher social value, while factory farming would have none whatsoever.
When you attempt to provide social value without achieving congruence with your personal values, your motivation will be very weak. You won’t be inspired because you’ll be doing what you feel you should do, but not what you want to do. I often see this happen with people who jump into blogging on a topic they think will make them a lot of money, only to give up after a few months because they can’t stomach it any longer. Please don’t do this to yourself.
Alternatively, when you attempt to satisfy your personal values without providing any real social value, you get the starving artist syndrome. You may be inspired by work that totally fulfills you, but it won’t pay the bills. Please don’t do this to yourself either.
The solution is to find an area of overlap between your personal values and social values, and work within that area of overlap. This will allow you to do what you love and create something that others value as well. Don’t force yourself to choose between your integrity and your income — choose both!
Social values and your personal values will fluctuate over time, so be prepared to adapt. In my early 20s, I launched my computer games business. At first it aligned perfectly with my personal values but not with social values — I loved the work, but I wasn’t making any money. After several years I reached a point of balance, where I was enjoying the work and making a nice living from it. Further down the road, my personal values changed, and the work no longer inspired me even though it still had social value. So at that point, I opted to change careers and started this personal development business.
Personal development is a field which has high social value, and it also aligns beautifully with my personal values. Consequently, I can generate substantial income in this field and be very fulfilled at the same time. Don’t underestimate the importance of alignment between personal value and social value. Both are essential if you want to make money consciously.
Unless you’re really inflexible, it shouldn’t be exceedingly difficult to envision a way for you to contribute social value that also aligns with your personal values. This is a problem that can be solved if you put some thought into it. For most people the more difficult challenge is how to transition. For that I’ll refer you to the article The Meaning of Life: Transitioning.
Two simple realizations can help you achieve a congruent mindset about money and push beyond limiting financial beliefs. First, you must consciously adopt the contributor mindset and abandon the moocher mindset. And secondly, you must find a way to contribute social value while achieving alignment with your personal values. Once you’ve internalized those two mindsets, you’ll be in a position to generate abundant income while serving the greater good.
If you want to generate income without lowering your consciousness, you have to get your limiting beliefs out of your way. Holding yourself back from earning more money doesn’t serve anyone. Limiting your income only limits your contribution. The conscious reason to earn more money is that you can put those social credits to good use. Use them to expand your service to others. If you’re living an honorable life, then it’s a good thing for you to receive more money. You’ll be a good custodian for it. The more money that flows through your life, the more resources you can invest into your life purpose.