The worst fate in the modern world is to go a month without an income. People do all sorts of things to avoid having to go without an income and do all sorts of things to recreate an income when they don’t have one.
I’ve started noticing that people feel more comfortable with steady flows of money coming into them rather than having a higher amount of money sitting in a bank account or having it be the result of a single financial event.
Consider the following popular business goals:
- Obsession with “MRR” (or monthly recurring revenue) in software products
- Boring businesses with monthly “cash-flowing” assets
- Real estate that produces cash flow from rental payments
- Passive income from digital products
We might call this paycheck envy, the tendency to glorify opportunities that produce steady cash flow over opportunities with higher economic payoffs.
I’m not immune either. I’ve written about how creating a diverse range of income streams (despite some being quite small) has been an explicit goal. But am I deluding myself? Am I wasting time chasing a monthly recurring $100 when I could just try to spend more time thinking through what it make take to sell a $25,000 workshop to a company doing work I enjoy? I’d only have to do that once every 20 years to equal the impact of a recurring $100 revenue stream.
What I think is going on is that people are seeking permission in the form of money to live their lives. I sense that the default path way of working, mostly in the form of salaried employment, has shaped the reality of most adults so fully that we see any sort of existence outside of this as suspect.
If this is true, we are placing money first and foremost above the practice and art of living life. We see some evidence of this from the reluctance of people with more than enough money to stop or work less before they hit the formal retirement age. We also see in many retirees who have saved a lot, the shocking data that most spend down very little of what they saved for retirement. Just like we have sunk costs, it seems we have sunk incomes. They are earned in the past and therefore can’t serve our needs in the present.
Personally, I struggled with this a lot in my first two years of self-employment. I operated my life as a CFO, ensuring that expenses were below income. But looking back this was irrational. Not because there was any economic opportunity at stake but the fact that I realized quite soon after quitting my job that I was super excited to be on a new path and wanted to stay on it!
I was putting all my psychological effort into leveling up my inner game but I was scared as hell to spend a dollar on myself if I hadn’t earned. I was stuck in paycheck envy hell.
One thing helped me reframe this. Someone (I really forget who, so if it is you, let me know) told me, “Consider your savings a gift from your former self.” It was a powerful shift in my thinking and helped me become a little less attached to my own money stories. Try a thought experiment. Instead of your current job or working situation, imagine you spend five years working in a different country, company, or industry. It quickly becomes obvious that the amount of money you’d have now would definitely be different. Run this thought experiment 100 different times and you start to feel that the amount you have was not in fact destined by God but more random than you might have liked to admit before this paragraph.
And this is the hard thing about money in general in today’s world. Everything does feel a bit random. It seems like every millennial knows someone who accidentally got rich by joining the right startup at the right time, realizing enterprise sales can be wildly lucrative, or being born with the psychological makeup that makes working in finance or law less painful.
