- Kickigai Weekly
- Posts
- On money
What is money?
Money is a story humanity has accepted to believe so our ancestors would stop fighting and killing each other over food and shelter.
No matter if you lived in Ancient Rome using the denarius aureus, the shillings in the Middle Ages or any currency we have nowadays, the role of money has never changed but how we see it is unique to each of us.
It’s no secret that people feel very differently about money and these feelings drive their behaviours. You probably know wealthy people who don’t mind spending lavishly while others are penny-pinching every purchase. You might know people who struggle to make ends meet and ones who are content with what they have.
Growing up in the south of Italy, money has always been a taboo topic. It was clear that working was how people survived but nobody talked about it. For one reason or another, money became a looming unspoken objective that drove me and many of my teenage friends to choose our careers.
Over time, I’ve met my fair share of people, from retail workers to very wealthy people. Each of them deals with money very differently and here is what I think the phases of wealth look like:
The pyramid of wealth
Poor: €0 - €100k
Every expense is stressful and your job takes most of your time so you can’t get out of the loop that easily. Life is hard and you feel stuck.
Comfortably poor: €100k - €250k
Small expenses like groceries or eating out don’t matter any more but you still have to worry about rent and annual vacations while depending on your job.
Comfortable: €250k - €1M
Your only worry is big purchases like a house or a car. Everything else feels easy. Investing becomes important and most of your network is invested in assets instead of cash.
Rich: €1M - €3M
You can buy almost anything you want. You have probably left your job, are taking time off to explore new career paths or have your own company.
Comfortably rich: €3M - €10M
You don’t work for money anymore and you do anything you want regardless of the price. Your investments cover all your expenses and time becomes your most important asset.
Very rich: €10M - €100M+
Not much changes after this point but you get to impact beyond your community (more about this below). Some people decide to buy a private jet, donate millions, buy luxury homes or become full-time philanthropists.
Of course, the numbers might change based on where you live and some people get to jump a few levels at once, for example after selling a company, making the right investment or even winning the lottery.
But is this it?
Will climbing the financial ladder from one level to another set you financially free?
It turns out it’s not.
Like many of you, I love having clear steps in front of me so I can visualize exactly how to go from where I am to my desired goal. So it should not be surprising that I was hooked on the concept of the pyramid above.
Over time I learned that that’s only part of the story and numbers pave in comparison to how we feel and behave around money.
Wanna know how’s your relationship with money?
Ask yourself: “How do I feel when I open my bank account?”
No matter the number you see on the screen, you’re definitely in one of these 3 phases:
Phase #1: Survival
In this phase, money provides food, shelter and covers basic needs. It sounds easy but it’s extremely subjective because it’s about loss aversion, or the fear of loss overcoming potential gains.
Someone going paycheck to paycheck might fear becoming homeless just as much as a millionaire might fear a change in fortune and the loss of his 3-floor house.
No matter, if you are starving, you have your basic necessities covered or already have some savings, if you fear losing what you have and going back to square one you are in survival mode.
Every decision you make is clouded by this fear which prevents you from taking action: changing jobs, moving to a new city, investing your savings and so on.
Phase #2: Freedom
Once you have enough money to cover your necessities and you conquered your fear of going back to nothing, money becomes a tool to have a better life.
In its simplest form, a well-paying job and some savings give you the freedom to go on nice vacations, eat at expensive restaurants and buy things you like.
It turns out that most people in this situation, stay in the same job because it pays for their lifestyle, not because they particularly enjoy it. It’s an asymmetrical decision given the time spent working is 5-10x the time spent enjoying what money can buy.
On the other end of the freedom spectrum, having “enough” money aside gives you the freedom to choose a job you enjoy and untying your self-worth to the amount of money you make.
But how much is enough? There is no magic formula but it’s probably lower than you think because when what you do is fulfilling enough, you become happy without spending too much for leisure.
Here is a simple test to see if you’re financially free (no matter your income):
Financial freedom is about attention. The less you think about money, the more free you are.
Phase #3: Power
Power sounds like a daunting word, mostly associated with evil. But what is power?
“The capacity or ability to direct or influence the behaviour of others or the course of events” - Oxford Dictionary
At this stage, money is how you amplify your actions and/or influence the behaviours of others. This can take many forms: making sure your family has the best possible medical care, giving your kids exceptional education, supporting your community through donations or even investing to solve problems that you care about even if they are far away from you.
Needless to say, money gives you even more power to control others, manipulate decisions and further your interests to the detriment of others. But don’t be afraid because money has never turned anyone into something they were not. Someone who is manipulative and has sociopathic behaviours always had them, even when they were poor too; money simply amplifies the reach.
As you’ve noticed by now, I’m fascinated with the role money and wealth play in our lives and have much more to share on this topic. If you’re also interested in this, hit reply and let me know what you’ve always been curious about.
If you enjoyed this issue, share it with someone who wants to learn about money!
This week's top scientific reads
Latest European funding rounds in health & bio
Huma raised €73M for their integrated platform that powers hospitals with services including virtual care, patient apps and clinical trials 🇬🇧
Overseed raised €6.7M to become the first French manufacturer of 100% medical cannabis medicines 🇫🇷
HepaRegeniX closed a €15M Series C to advance the clinical development of HRX-215 for liver regeneration 🇩🇪
Asceneuron raised €92M to develop drugs for neurodegenerative disorders 🇨🇭
SamanTree Medical raised €13M for their medical imaging platform specialised in tissue removal surgeries 🇨🇭
CatalYm raised €138M to develop immunotherapies for cancer patients 🇩🇪
More from us
10 steps to join the startup world
A workbook to help you find your ideal role in the startup ecosystem.
From understanding the key players to finding hidden opportunities, this framework will guide you every step of the way.Land your dream job with 1:1 private career coaching
Get actionable and tailored advice from someone who has overcome similar obstacles and doubts in their career.
You can book a 60-minute session by donating to any charity.