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Good With Money vs. Good With Resources

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.

Just Got Your First Job? Here's What To Do With That Paycheck

On Tynan

Summer is just beginning, which means that in my family as well as many others, people are graduating college and preparing to enter the workforce. I just heard that one of my cousins got a job. My first reaction was to be excited for her, and then the second was to be a little bit nervous: the habits she builds in her first few months of receiving a paycheck are very likely to affect her entire life an an enormous way.

While the amount of money you earn is important, what you do with that money is far more important. There is no shortage of people who make hundreds of thousands or millions who end up bankrupt or severely in debt. It happens all the time. But at the same time there are plenty of people who earn very little money but spend it wisely and never have a financial worry in their lives.

Money trouble is a leading cause of divorce. It's can be a huge source of stress. Not having enough money restricts your freedom, making it impossible to change jobs or to move to a different city.

Most Americans don't have enough money to handle an unexpected $1000 expense. This is MOST Americans, not just those who don't make a lot of money. And almost everyone will eventually have a $1000 expense they aren't expecting. A car breaks, they miss a flight, they get injured, their water heater floods, they get into a car accident, or they lose their job.

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