Money Archetypes
Money Archetypes
I have been thinking about money a lot lately. No, not in the way you imagine. More about how each individual has their own personal relationship with money and what it means to them. Although I have lamented in the past that money is just an intermediary, It still has a profound affect on our personality and character. Not withstanding that personal finance is indeed personal, I think that there are a few basic money archetypes that describe how we interact with this complicated subject. In the realm of financial independence, there are two specific patterns that seem to come up repeatedly in my observations.
My research has not been as wide and vast as you might hope. I have not scoured the literature nor probed the most brilliant minds locked away in their ivory towers. Nope, I have done something a little more basic.
I have observed my children.
The Money Maker
My son is fast and loose with coin. It’s as if those few quarters in his pocket burn a hole in the fabric. There is always something new to buy. Some new piece of electronica that should adorn his bookcase. I have no doubt that at fourteen years old, he spends more money on himself than I do.
So you think this would alarm me. You think this would make me fear for his future. But I don’t. Because there is one thing that he does that he is even more skilled at than spending.
My son knows how to make money.
It started before he even had cash in hand. In elementary school he would leave for school with a handful of yucky Halloween candy, and return home with old cell phones, watches, and video games. Often they were broken until he fixed them.
He told us he loved to trade candy because his poor trading mates would eat the candy, and then later realize they had made a poor decision. But by that time, they had nothing left to trade back.
He is now a master of eBay. He buys broken electronics, fixes them, and then sells for double the price. He is known around the neighborhood for his technical skills, and often gets paid a good commission for his repairs.
He always has cash on hand because he lives in a world of abundance. Abundance is one of the principal money archetypes.
Penny Pincher
My daughter, on the other hand, holds tightly to one of the other major money archetypes.
Scarcity.
While unable to make as much money as my son, her cash goes a lot farther. She is extremely careful with what she spends her money on. She values her things deeply and puts a great deal of thought into what she wants to buy.
She likes to make every penny count. She does not see the world as expansively as my son does. Nor feels the same elation at the prospect of turning a profit. Money is just not that important to her.
She does value things, but unlike my son, vibes more on relationships and feelings. She is the first one to jump at a new experience and plunge head first, while my son is reticent.
Which is Better?
Although we like to place a positive connotation on abundance and a negative on scarcity, I think when it comes to money archetypes, the comparison is a wash. My son will look at the world in big, bold swaths and probably make and lose quite a bit of money over a lifetime. Yet as parents, we have drilled in enough knowledge about saving, compounding, and investing that his bank accounts will always be adequate.
My daughter will likely be more frugal, take less economic risks, and concentrate on value. She may never make as much money as my son, but will probably never spend as much either. It is even possible that she will lean towards minimalism or at least valuism.
But she will also live a life full of purpose, experiences, and relationships. And in this she will be wealthy beyond her dreams.
Which Archetype Are You?
Strangely enough, I think that I am probably more like my son than my daughter, although I lean both ways. My wife is more like my daughter than my son, but she also leans both ways.
Maybe these money archetypes are like our genes, and then our environment modifies our true tendencies.
What do you think?
Which archetype are you?
I lie somewhere in the middle as an average of the two. I do lean towards the more conservative. However I suspect my actual point at any given time varies based on the situation.
I guess it is not all black and white.
I used to be a spender and am now a pincher. I think this can be a fluid dynamic that changes over life. An interesting thought, for sure.
TPP
I guess it can. For some reason I always saw it set in stone. Maybe some nurture and not just all nature.
I have fraternal twin college freshmen. One subscribes to abundance and the other to scarcity. I hope tgey find merits and a balance in both archetypes in their twenties.
Certainly makes you think about nature vs nurture in the comparison.
My daughter is a saver but usually it is for a larger purchase so I guess it is almost like a hybrid of your kids.
That is amazing that your son is following your footsteps as an entrepreneur. That takes some serious skills fixing broken things and then flipping it on Ebay.
I am probably like my daughter in that I don’t tend to spend much on myself but when I do, it’s a doozy (think brand new Tesla for instance). But I tend to hold on to these large purchases for a long time (last car I drove for 11 years or so, this one is probably on a similar path).
Teslas are an achilles heal.
Like you, I lean both ways, but I wouldn’t be FI without being an abundance oriented risk-taking money maker. Now that we are not working both my husband and I are more frugal. Different strategies for different times.
I like that you added risk taking into it.
I was just doing some research on this ten minutes ago and it turns out the real key may be what’s called the G-Factor (no not in honor of Doc G). The G factor is a quotient of general intelligence based on more than IQ but on many cognitive fronts. It turns out personality can be broken down into 5 types with each type being further broken into 2 sub types and it seems these are biologically and not environmentally determined. In other words you can’t really train frugality into an entrepreneur, BUT frugality can be equally lucrative. You can make a run by hitting a home run or by hitting 4 base hits. Either way its a point toward victory.
I’m like your son. I own BTC because I see huge creative destruction in the idea. Trading crappy candy is like that. It’s creative destruction. It is not investing however. A lot of my financial life was devoted to building business and figuring out means to make money. In college I tutored Physics Math and Chemistry. I only needed to know the courses I tutored cold not the whole field to give value to my students. So I knew first year chem cold and organic chem cold and first year physics cold and pre-meds beat a path to my door, because pre-meds were all about learning just enough to pass the test. My college even separated the classes into professional school chem and majors chem for example because the majors needed to learn the knowledge in a deeper way, not just be in a gunner’s competition to learn 10 things. So I was Mr see one, do one, teach one, and it paid for my pizza and beer. It later paid off when I took the MCAT because these subjects in the main were the exact subjects the MCAT tested. I scored in the top 1% nationally so that “business” had a direct impact on my life’s work. Home run. In college I had zero interest in medicine, in fact the pre-med community sent me in the other direction. I’m all ADD and pretty type A.
My wife OTOH became a couponer. Through couponing she could go to the store buy $100 worth of goods on coupons and come home with $10. Day in, day out we acquired stuff basically for free. My wife is super organized and studied the economics and understood the game theory of how to maximize benefits by melding multiple coupon’s and opportunity (sales and such). She had binders of coupons organized and in seconds could extract $50 of savings from a binder. She dug the challenge. My Wife is a bit OCD and very competent but not competitive. She balances my ADD. I’m all about driving on a trip to make 600 miles before sundown, she’s all about having a cooler packed with baloney sandwiches and drinks to allow that to happen.
How this plays out has a direct impact on FIRE success I think. Great article.
I love it. OCD and ADD create…wait for it…harmony. I guess some of the key is embracing and making the most of your money Archetype. But can you change it? Can you alter your money phenotype? Stay tuned for tomorrows post.
Combo archetype : Spend some, Save some. I believe that you have to enjoy your earnings and save some too.
I’m a bargain hunter at heart. If you do a bit of research and price shop , use coupon codes, you’ll see some differences.
Sometimes big ones. Not one for extreme miserly measures. I like what I like. Had a relative who was extreme. She grew up during the depression and would clean out diners of their sugar, salt and condiment packets. We had some laughs about it , especially when I discovered that she had filled my bag with bread and butter from the table without my knowing. RIP Mimi.
My grandma grew up during the depression in an orphanage. She was similar.
Combo archetype : Spend some, Save some. I believe that you have to enjoy your earnings and save some too.
I’m a bargain hunter at heart. If you do a bit of research and price shop , use coupon codes, you’ll see some differences.
Sometimes big ones. Not one for extreme miserly measures. I like what I like. Had a relative who was extreme. She grew up during the depression and would clean out diners of their sugar, salt and condiment packets. We had some laughs about it , especially when I discovered one time that she had filled my bag with bread and butter from the table without my knowing. RIP Mimi.
I was more like your daughter. Only now in mid-life am I learning to hustle!