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BAM Intelligence

Putting Money In Its Place

What we believe about money will impact how we use it. Unfortunately, a central belief most of us hold about money is fundamentally flawed. We believe that money is either good or bad when, in reality, it is neither.

A belief that money is bad certainly is the minority mindset. But it may be a more dangerous conviction than its inverse, if only because it appears virtuous. After all, how could using less water, less square footage, less medication, less natural resources — less money — be a bad thing? Perhaps because there’s a deceptively short distance between being pro less-[fill-in-the-blank] and becoming anti-[fill-in-the-blank]. And if we’re anti-money, we may also become anti-people-who-have-money, including ourselves if such a circumstance arose.

A friend of mine has a huge heart for people with less — I mean, really less. So much so that he dedicated his life and work to serving them. He regularly goes to the world’s most deprived places, using his powerful combo of empathy, education and experience to rally the necessary aid. Once, when he received a sudden sum of money, I asked him if he was capable of committing financial suicide — by which I meant divesting himself of all the extra decimal places in his bank account — simply because it wouldn’t feel right for him to have such a possession as one so wholly dedicated to the world’s underserved communities. He acknowledged it was possible.

The far more common belief is that money is inherently good. Although this belief appears innocuous at first blush, it’s important to consider its logical conclusion. If money is good, then more money is better. If so, we might be inclined to accept a common lament as true: “If I only had more money, I’d have a better life.” Inevitably, money becomes personified, and thus becomes an unconquerable competitor pitted against the actual people in our lives. In this reality, our friends and family simply can’t compete with money. People let us down, while money only promises to make our hopes and dreams come true.

We need to put money in its place. Specifically:

Money is a neutral tool that can be used for good or ill.

That’s it.

When we believe that money is bad, we typically handle it poorly and strain our relationships. When we believe that it’s good, we tend to put money in competition with people and strain our relationships.

For the pragmatists, if you’ve read this far, please know that those who work to put money in its place tend to do better with it and have more of it. (Yes, this occurs even in cases where people deify money. They’re often forced to part with it — often roughly 50% — to compensate for the relational destruction their mistaken belief causes.)

But what if you realize your money beliefs are mistaken? Is there anything you can do about it, especially considering that our default beliefs were likely learned through our experiences in the first 10 years of life? Yes, it may be an uphill battle, but consider this.

Our experiences form our beliefs, which direct our thoughts, which predict our actions, which lead to new experiences, which then reform our beliefs.

While it may prove difficult to wrestle your subconscious into a new belief, we can at least interrupt the remaining phases of the cycle by imposing the belief we want to inspire. We can choose to alter our thoughts by filling ourselves with an alternative philosophy. Reading and education effectively are training for a new belief. We can certainly impose new actions, like committing to training classes at the gym, and we can invite new experiences.

For example, my fundamental money belief regarding philanthropy and helping those in need was changed through the following process:

1.read Muhammad Yunus’s book “Banker to the Poor: Micro-Lending and the Battle Against World Poverty.” I recognized that it partly conflicted with my belief about poverty and helping the impoverished.

2. Then I took action. I signed up to go on a trip to Nicaragua, to both serve and observe two different micro-finance operations.

3. Before the trip, we were required to read Steve Corbett and Brian Fikkert’s “When Helping Hurts: Alleviating Poverty Without Hurting the Poor…and Yourself.” We also had to meet multiple times to discuss the book and the work ahead, further altering my thoughts.

4. Then I had the experience. I could feel my fundamental beliefs about poverty money changing throughout my time there.

Then, as you might expect, I’ve solidified those beliefs with new reading and thought confirmation, new actions and new experiences.

You might assume that I don’t have trouble deifying or demonizing money, but that is false. Maybe especially because of my profession, I find it’s a daily battle for me. I must perpetually interrupt the cycle of wrong beliefs and wrong thinking. Maybe that’s just how it works.

So what do you think? Do you need to put money in its place?

This commentary originally appeared February 27 on Forbes.com

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© 2014, The BAM ALLIANCE

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As director of advisor development at The BAM ALLIANCE, Tim designs and implements focused educational programs for our advisors around the country. His goal is to prepare them to provide an outstanding experience to each and every client through skillful investment advising and financial life planning.

A central theme drives Tim’s work: Personal finance is more personal than it is finance. Regardless of our income or net worth, Tim believes it is our underlying values and goals that drive our behavior with money, which ultimately determines our satisfaction in work and life. With a passion for relational communication, Tim has been featured on the Today show on NBC, CNBC and ABC’s Nightline, on NPR programs The Diane Rehm Show and Marketplace as well as in The Wall Street Journal, The Washington Post, The New York Times, The Baltimore Sun, Kiplinger’s Personal Finance, U.S. News & World Report and Money magazine, among others.

You can follow Tim on Twitter at @TimMaurer.

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