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Know Your Money

(This covers the eighth chapter from Rabbi Daniel Lapin‘s book Thou Shall Prosper. Each chapter is one part of a set of core principles that approach business and money as spiritual practices, referred to as the ‘Ten Commandments for Making Money.’ I’m reviewing the eighth ‘Commandment’ here. My plan is to go through all ten. You can find out more in this post discussing my thoughts on the book. All quotes, unless otherwise attributed, come from the book.)

Your money is a quantifiable analog for your life force – the aggregate of your time, skills, experience, persistence, and relationships.

Most of us don’t like being judged by how much money we do or don’t make. We’d protest that not everything we do in life has to do with creating and maintaining income. Rightly so. We don’t get married, start families, attend church, make friends, volunteer, etcetera and ad nauseum, with the express intent of increasing our wealth. Still…

As oversimplified as this may sound, my money is really me and your money is really you. You may say that there is more to your life than your money, but there is truly nothing more to your money than your lives.

Money is a numeric analog for how you run your life and what you have done for others. Money is a metaphor for the strength of your human relationships.

Money is a combination of a claim and a promise. Money is intangible. It is only as good as the invisible network of trust that links vast numbers of humans into a loose kind of unity. It is a claim against other people for goods and services you need, and it is a promise on their part to supply those goods and services to you.

[emphasis has been added where it suited me]

See, while it’s true that we aren’t all about our money, our money is entirely about us. Do you want to know what is really important to you? Examine your bank statement. How you make money. How you spend it. How you save it and give it away. All of that reflects more about you as an individual than any other single aspect of your existence. Money literally touches every part of your life.

And that reminds me that money is dangerous, because unchecked it will fuel the negative impulses in our life. For example, we might spend a bulk of our income on some temporary form of comfort to the detriment of our future. Or we find ourselves overworking just to gain some approval with a bunch of zeroes attached to our annual income. Maybe we try to control what our money reflects about our priorities.

No one can serve two masters, for either he will hate the one and love the other, or he will be devoted to the one and despise the other. You cannot serve God and money.

Matthew 6:24

What can we do to help keep money in its place, and keep it from feeding the worst in us? Here are a couple of vital steps that are covered in the chapter:

1. Become fluent with financial statements. First of all, you need to get a firm hold of your own finances. You need to know exactly how much is coming in, and where and when it’s going out. You have to make and keep a monthly household budget. You have to know your money.

Know well the condition of your flocks, and give attention to your herds,
for riches do not last forever; and does a crown endure to all generations?

Proverbs 27:23

Once you’ve mastered your own finances you should understand the finances of the companies you work for and invest in. Explore and educate yourself so that you understand the financial health of the source of your income and how you’re growing your wealth for the future. Demystifying those things puts your wealth in its proper perspective.

2. Determine what’s valuable about you and to you. You must develop a working understanding of value. What gives something value?

Value is not an attribute or physical property possessed by things themselves, irrespective of their relations to men, but solely an aspect of these relations that enables men to take account, in their decisions about the use of such things, of the better opportunities others might have for their use.

Friederich Hayek

Value is determined by the process of exchange. A thing is worth only as much as another is willing to trade for it. Since not everyone is willing to trade the same amount for a given thing, the value of that item or service varies from person to person.

So to determine what is valuable about you, you need to determine what items or services you can provide to a community around you that is largely agreed upon as being of value.  That community can be large or small, local or global, niche or universal. All that matters is that they see the value of what you are offering and are willing and able to pay you for it.

Then turn that around and understand that it’s just as true for you. What are the individual parts of your life (the things you own, the relationships you have, the hobbies you enjoy, etc.) worth to you? Identify what you believe is valuable to you, and then determine whether or not your actions reflect that.

Finally, here are a couple more quotes from the chapter that stood out to me:

To convince a particular woman to marry you, I explained to men, it is not enough merely to desire her. You must also understand her. […] Trying to understand the woman is the only way to win her.

Specifically, identify and understand her needs. Knowing her emotional needs will create intimacy and strengthen the bond between you.

[A]nyone with a reputation for reliability can create money. Its nature is to serve as a medium of exchange between people and it should never be adulterated.

This chapter also talks about trustworthiness a lot. Rabbi Lapin makes a strong case that the existence of money, any money, rests entirely on our ability to trust the commodity or entity that backs it.

That’s my take on Rabbi Lapin’s Eighth Commandment for Making Money. Keep looking here for my thoughts on the Ninth Commandment: Act Rich: Give Away 10 Percent of Your After-Tax Income. Feel free to comment and share your thoughts and questions about this chapter, whether you’ve read the book or not. Thanks.

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July 9, 2011 - Posted by | Read and Reviewed, Work and Money | , , , , , , ,

2 Comments

  1. […] Know Your Money […]

    Pingback by Thou Shall Prosper « A Bodey in Motion | July 9, 2011

  2. […] Seventh Commandment for Making Money. Keep looking here for my thoughts on the Eighth Commandment: Know Your Money. Feel free to comment and share your thoughts and questions about this chapter, whether you’ve […]

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