I've been thinking about people who are "good with money" lately. Certainly, being "good with money" is superior to being "bad with money" - people who are bad with money spend a lot of their life in unnecessary stress. Generally, being "bad with money" would mean not being in control of your spending, having debt unnecessarily (if you're just carrying around a lump of debt, you only need to cut your spending in the short term to get rid of it, and then you can go back to your old spending levels debt free), and otherwise not managing their finances well.
Yet, "good with money" by itself doesn't predict success all that well. Oh, to be sure, it helps a lot. But we all know people who you'd call good with money who aren't successful in general.
I've been thinking on the reason why - and I think it's because money is only one of many resources. You've also assets, both securitized assets (stocks, bonds, real estate, whatever) and assets that are more intangible and impossible to buy/sell/trade as a security - more amorphous things like prestige, credentials, and of course, skills and experience.
I also think the word "resource" isn't the best particular word, since there's a lot of things that are resource-like that aren't really resources... obviously our relationships aren't resources, but can also be invested in similar to a resource. You can go out of your way to do nice things for people who have done right by you, you can be thoughtful, you can go out of your way to travel to a place if someone you really admire is there.
Being good with money guarantees none of the above.
There's some people who are "bad with money" who are good with other resources. Yeah, their spending is haphazard and they've got debt that doesn't make good sense to have, and they don't manage the debt all that well... and yet, they're good at picking up prestige, credentials, and they spend the time and money to take care of people, improve their relationships, and otherwise are "good with resources" (except money, in this case).
Some people are good at controlling their spending and managing debt and finances, but they never deploy their money intelligently towards getting new skills, credentials, prestige, securitized assets, and building relationships. Money is only one resource, after all.
So we could look at it like this -
Bad with money, good with other resources: Will have stress and money problems, but will be connected, respected, skilled, and so on. This person always has a little stress for money reasons, but carries considerable earning power with them so probably doesn't get into too much trouble (hopefully).
Good with money, bad with other resources: Builds a fat bank account, but never converts it into anything really interesting. Earning power doesn't rise so much, except to the extent they buy securitized assets.
Bad with money, bad with other resources: Life will be a total mess. Constantly stressed out with money. Spends money on stupid shit when has it. Doesn't build skills, abilities, prestige, credentials. Doesn't take good care of other people and invest into relationships. In line for a very hard life if nothing changes.
Good with money, good with other resources: Manages finances intelligently. Builds a fat bank account, and then intelligently looks for other situations to deploy the cash in the bank to serve them well. Goes through periods of spending a bit more to increase their earning power, and then keeps spending flat or low to bank even more cash, which then gets deployed into even better things. Life is pretty sweet.
I want to be in that last category. But bad-with-money/good-with-other-resources might not be such a bad category. Those people actually probably exceed good-with-money/bad-with-other-resources overall. (But try to move into the final category - it's a pretty sweet category!)
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