Working Out Your Money Muscles

Playing the money game is something really fun, when you do it with an easy heart. And by that I mean that whenever you focus only on the money part and lose the game part you derail yourself from a path of joy and learning. Making money is just something you do in the process of creating value. The focus must always be at creating value, not at money.

In today’s post I’ll share some of my money game experiences, I will show how money can be compared with a fitness workout and I’ll take a closer look at one very scary notion related to money, and that would be debt.

The Money Game

For me money is just a source of energy. I wrote about that before so if you want to know how you can make money with a purpose, just go and read that post and return here a little later. If you already read it, than you know what I mean: each time you interact directly with money, you break an energy flow. And direct interaction with an energy flow can be really dangerous. You should consider using switches for manipulating money, the same way you manipulate switches for electricity, in order to light your room or make it warmer.

Money is just a part of a game, is something you use in the process, is not the process itself, nor the goal of your actions. People tend to forget this and they do it especially when one part of the game become a little naughty: when they are caught in debt.

Debt and win are just two faces of the same coin (ironically, I use a money object in order to describe a money concept). If you win money in the process of creating value that simply means you have more resources than you had in the beginning. If you used more money than you had at a certain point, well, you just created a debt. The problem with debt is that is very often perceived like a threat or a burden. And it surely is, as long as you don’t know the value you created with that debt. If you used that money in order to build something, you created a certain value. (If you didn’t and just spend it on a shallow lifestyle, well, that’s another problem and your debt should really be a problem for you.) But if you created value, your only question is:

Is my created value bigger than my debt?

If the answer is “yes”, you’re on the safe side, and the money game is working for you. If the answer is “no”, well, you should do your best to create more value.

That’s what makes the difference between successful people and losers. Successful people know all the time if their created value exceeds or not their financial debt. And most of the time, that value is well over the debt. Losers (sorry for the term, but it’s the most appropriate term I found for this category) never know where their created value is compared with their debt. At the first sign of a debt they consider something is wrong and stop doing everything, start complaining, become irrational or simply run away.

A Personal Example

Several years ago I wanted to start a print business. I was doing fairly well on the online business, being market leader on the automotive category, but I wanted to expand the business in the print. I started a printed magazine, with free distribution at gas stations. I will skip the logistical and strategical details, and I will focus only on the money game.

I was able to print 6 editions of the magazine, which in turn created a debt of 20.000 USD. The revenue was zero. Advertising was really weak those times and other monetizations strategies proved to be really slow. At that point I freaked out and closed the business. For the next months I worked like crazy to cover the 20.000 USD debt from other sources, called the print business a loss, and moved on.

At that time, that was the biggest debt value for me: 20.000 USD. Years later, after more experience and several learned lessons, I consider this debt insignificant. Compared with the created value, the magazine, it was really nothing. The magazine had no competition, it was backed up by the online version, it could have been a blast. I guess the debt could have been even bigger, maybe 30-35.000 USD and the created value still bigger. But I freaked out. It took me 3-4 years to learn that simple lesson: assess what you created and if you feel is bigger than the debt, just move on!

And when I learned this, I started to take bigger risks. I implemented of course some techniques, strictly related to investment strategies, like portfolio diversification, long term and short term investments and so on, but the bottom line is that I was able to increase my all time financial debt limit up to 100.000 EUR. That was my higher – or should I say lower – debt limit, including credits, investments and so on. From 20.000 USD to 100.000 EUR it’s a big leap.

But when I had that 100.000 EUR debt I was sleeping so much better than when I had the 20.000 USD debt, Why? Because I knew that the associated created value was way bigger than the debt. I knew that all I’ve created could have been exchanged for money at a way higher rate. It was the created value assessment that let me sleep so well. I was finally out of the money obsession, and my focus was on the value, hence the money game started to play really well for me.

Money As A Fitness Workout

Ever went to the gym? Then you know the drill: you gradually increase the duration of your exercise and in the end you achieve fantastic levels of endurance or speed performance. This is the principle behind fitness: increasing resistance and continuing to push against this resistance. This is how you loose fat, become stronger and feel better. You fight against an increasing resistance, you don’t keep the fitness machines at the same beginner levels…

That’s exactly the same in the money game. If you stay at your current level you will never achieve more money power. If you constantly keep your debt boundaries at the same level, you will never break out. Sounds really insane to continue on a path of debt. But it’s not a path of debt, as long as you always know what exactly you achieved, what you created with that debt. Of course it will be so much difficult to work against bigger resistance, but the results will also be bigger.

If you find yourself in debt and unable to assess your associated created value and you run away from the game, it’s like quitting the gym after warming up. You simply can’t progress and doom yourself to remain at the same financial level.

If you find yourself in debt, you assess your associated created value and chose to increase it, well, you’re in the game. You are still working out that gym and pushing against bigger resistance. You build your money muscle.

This is what I did when I first faced a significant debt: I ran away without assessing my associated created value. I freaked out because it seemed so difficult for me. I just totally skipped gym and stopped exercising. It was only after years of learning that I started to exercise again, in the real life, and started to push against bigger and bigger resistance. And it was only by continuous exercise that I become so much better at assessing my created value.

Are you doing the same? Are you striving to work out your money muscle by increasing resistance all the time? Are you achieving right now financial abundance that sounded like dreams 3-4 years ago?

Than what are you waiting for?

Running For My Life - from zero to ultramarathoner

The spooky thing about depression is that it sneaks in. There aren’t really trumpets and loud voices announcing: “Hail, hail, this is depression entering the room, all rise!” Nope. It’s slow, silent, creepy. It doesn’t even look like depression. It starts with small isolation thoughts like: “Maybe I shouldn’t get out today, I just don’t feel like going out”. And then it does the same next day. And then the day after that and so on. And then it starts to whisper louder and louder in your ears: “Why would you go outside, you loser? Didn’t have enough yet? Want more people to make fun of how much of a big, fat loser you are?”

And then you start to breath in guilt and shame, instead of air. Every breathe you take is putting more dark thoughts into your body.

Until you get stuck. You can’t move anymore. At all.

If you want to know how I got out of this space, eventually, check out my latest book on Amazon and Kindle.

Running For My Life -from zero to ultramarathoner

Dragos Roua

The guy who started all this. Entrepreneur, ultra-marathoner, tanguero, father and risk taker. I'm blogging here, but I also spend a lot of time in this marvelous space.. You're invited, by the way.

This Post Has 6 Comments

  1. Playing the “money game” in the stock market for more than 10 years, the lesson for me was that, there are always two types of “money plays” that have to be distinguished:

    A short play: is when the short term outcome is more visible. Is like investing in Romanian real estate in the early 2000’s. The trend was so clear, it was almost impossible not to make money in the short term. The key here is “short”. Even though the temptation is to increase your gains for longer terms, you have to let go of them. Just take a smaller profit for 1-2 years at the most and run!

    A long play: is when you can see the creation of the value after a longer period of time. Is like your paper magazine investment. In short term is very likely you will take a dip from the short players. Maybe is a business partner that is playing short and he wants his money back so he can invest in short term investments. In stock markets, you can short the longs by borrowing their shares and selling them back at a lower price and you keep the difference (called “short selling”, and it allows you to make money if your bet that the price is going down is correct). Going long term takes a lot of faith and discipline, but is also more rewarding. It is about winning your own battle with these two powerfull emotions: greed for more and fear of loosing. 10 years, is by definition a “long” play and historically has been proven that is the time frame when wealth starts compounding and leveraging itself. If you hit the 1 million mark in 10 years, almost automatically you will be embarking for the 10 million journey in the next 10 years. Unless the greed and fear takes over and you will not resist the temptation to switch to a short play.

  2. @io_da wow, a lot of insight from somebody who clearly has played this game a lot. I really dig your “historically proven” sentence about 10 years for a million and another 10 for 10 millions. I really dig it 🙂

  3. Some years ago I learned that (for me at least) focusing on creating value opened the money flow, whereas focusing on money prevented the flow. These days, I put my time and effort into creating value and let the money thing take care of itself. This approach can be scary at times because there is often a lag between creating value and being rewarded for it. But experience has proven that it all works out in the long run. This is a great post and your gym analogy is a good one.

  4. Like I said before I rather put it back in to the business then spend it on extravagant material things. At least not everyday, any ways. I like buying property, personally.
    Some may say that it is a safe investment but I also have my little side businesses that are still being nurtured.
    I love the what you say about money muscles. It is very true.

  5. @Jonathan: thank you for commenting here, I appreciate it. And yes, the gap between your creation and your reward can be long sometimes. But the reward always come. That I know for sure.

  6. @BunnygotBlog having a “side business” it’s a great way to diversify your investment portfolio with minimum risk. Thanks for commenting here. Again 🙂

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