The 3 Skills Of Money: Making, Managing, and Spending

The Notorious B.I.G. hit the nail on the head when he said "Mo' money, mo' problems."

But in response to this philosophical rap lyric, the question should be asked: why does more money cause more problems?

It's because more of anything maginifies problems inherent with systems and habits.

These systems and habits are formed by the 3 skills of money...making money, managing money, and spending money.

Most people are good at one of these skills which is a contributing factor why married couples tend to handle money better than single people. More than likely, they have complementary money skills.

Some people are good at 2 skills...but to be great at all 3 takes intentional learning and focus.

Let's look at the traits and upside of each skill.

Rainmakers - Making Money

I know people who can smell a dollar before its printed. They just have an instinct for making money.

A lot of times, you will find these people in jobs like sales, investment bankers or business owners.

They are sharks in search of the blood in the water.

Being able to generate income and not having their earning potential capped is a driving force for them to reach their potential.

With an exciting skill like making money, the downside can be dullness of managing it.

And when you don't fear not being able to generate money, the need to save it isn't as pressing.

Executives - Managing Money

Knowing how the flow of cash is working within their personal life is important. 

When expenses get out of hand in one area, they are great at finding substitutes or eliminating the expense altogether.

Making sure that bills are paid on time and having their money organized and automated are strengths they really lean on. 

In tough times, their ability to manage money is on display by their ability to spread it out as long as possible.

However, the focus on the money in the system can cause them to be very conservative with investments and risk taking. 

It can also take their eyes off making more money and increasing income.

Ballers - Spending Money

I'm going to answer a common question about this one...how is spending money a skill and not a flaw?

Because we HAVE to spend money. The word spend literally means "pay out money in buying or hiring goods or services".

People who have negative emotions towards money like shame, guilt and anger tend to associate the word "spend" in the negative because that's their experience, but any millionaire will tell you that spending money is crucial.

After all, it takes money to make money.

The reason its a skill is knowing WHAT to spend your money and WHEN to do it.

When I buy a stock, I am spending money. I spent it on an investment.

When I buy food, I am spending money. I spent it on nourishment.

When I buy a van, I am spending my money. I spent it on transportation.

The "skill" of spending money is in the maximizing of every dollar spent.

The skill in buying stocks comes in predicting whether it will fall or rise 10% in the coming months.

The skill of buying food comes in getting more of it for less money like BOGO deals, buying in bulk to get more for less or going to a certain resturaunt because they offer a cheap lunch option.

The skill of buying a van is getting one at a fair price that is big enough to haul my family AND to haul furniture so I can start a refurbishing business.

Spending money in positive ways to maximize the value recieved and to use it the spent money to make MORE money is quite the skill to have.

The Triple-Threat

If you want to be rich, you HAVE to have all three of these skills incorporated into your finances, but you don't have to be good at all of them to do that. 
 
You can pay other people for the skills you don't have with money.
 
If you are great at making money, but don't manage or spend it well, then you can hire a CFP to help with that.
 
If you know how to manage and spend well but aren't good at generating money, then you can use your spending skills to invest in assets that create cash for you like real estate and dividends. 
 
My advice is this...
 
Get great at one, good at a second and outsource the third.
 
If you do this, you will be a Triple-Threat and will find that mo' money, won't mean as many problems as others have had.

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