How to Build Real Wealth: The Truth About Money?

Most people are struggling for money or anxious about it. This is a fact. Recently, Dan Koe wrote an article that I think is particularly good. I want to read it carefully and explain his logic to everyone.

Original source: The Truth About Money (And How To Make A Ton Of It)

The Importance of Money

Money is very important. Today, it has a close connection with real life and will affect every aspect of your life, especially your health, relationships, and romance.

Elon Musk once said that people need a career they like and a good love relationship (love is also a type of interpersonal relationship).

So how to say it, I think money is very useful, this no longer needs too much explanation.

The Real Obstacle: Cognition, Not Money

Dan Koe tells us that actually your pain because of money is not because of the money itself, but because you haven’t mastered the skill of “making money”. Naval also said something similar: making money is a skill, you need to learn it.

And this skill is not the biggest obstacle, the biggest obstacle is your cognitive level about money.

What Dan Koe wants to tell us is how to implant the cognitive level of making money into your mind, this is the first step you need to learn to make money.

He mainly discussed these points:

1. Money itself has no problem, but psychological cognitive problems do exist, you need to get rid of this mentality caused by money scarcity.
2. Discuss the difference between work, career, and earning income by doing things you like.
3. Some new perspectives on money, that is, how to achieve your life goals through money.
4. In any environment, what is his logic for making money, because making money is essentially a skill.

The First Hurdle: Breaking Psychological Cognitive Limitations

Many people are talking about wanting freedom, right? I want financial freedom, I want life freedom, I want everything, to do what I want to do.

But in reality, people are at least spiritually free. But we actually still have some requirements, or we still have some desires.

But, people actually have a psychological problem, which is about making money.

Most people don’t think they can make money, and think that working in a company, starting a business, selling things as sales, or doing physical labor for a long time, no matter what method, you feel these are all because of the pathology of this society.

You actually don’t realize that about self-development, there are still some business or commercial logic that you need to learn, and you can’t simply attribute it to the pathology of this society.

I actually think this hurdle is the hardest, which is your psychological cognitive limitation.

First is to break this limitation. Many people think: “I’ll just lie flat like this, I don’t want to make money either, I can’t make money either, I can only make this much money, I can only make physical labor money.” That’s because you actually have a psychological limitation.

Sometimes people also make excuses for themselves, saying money is not everything, or asking: “Why do I need to make so much money? It’s enough, right?” So, many of his limitations are already naturally there.

But sometimes you will realize that with money, once the initial survival problem is solved, you will still want to gain self-esteem, status or autonomy. For example, you don’t want to work anymore, you want to help others, but if you don’t have money, these wishes are hard to achieve.

So, these are actually all related to money. But because of psychological limitations, you haven’t seriously dealt with this matter, and therefore it’s hard to realize: actually making money can become very easy.

As long as you combine making money with things you like, you can make money. But people actually haven’t seriously thought about this.

Five Levels of Money Cognition

Your view of money determines your personal development level. If you want to solve money problems, you need to improve your cognitive level. The levels mentioned here can actually be divided into several points:

1. Survival
2. Status
3. Autonomy
4. Creativity
5. Contribution

1. Survival Stage

The survival stage is what we call how to solve life problems. Because of realistic pressures like mortgages or eating, you don’t have the energy to think or do things you like. At this stage, you must do things for survival.

Most people are in the survival stage. And the survival stage is actually treating work, treating making money as work.

2. Status Stage

The second stage is called the status stage. The status stage means: you have reached a state where you have a sense of security about money, and then you need to make others feel you have value. At this stage, it’s because you have a skill that can get you a better job, or you started a business that can pay life’s bills. Then you can also enjoy some life, right? To feel this surface luxury.

3. Autonomy Stage

When you reach a certain degree from the status stage, you will find that this surface life bill payment and desires are not what you want. You may want to do some happier things, because after all, cars, mansions, watches will become outdated, and everything becomes not that important. At this time, you actually start to enter a “creativity stage”.

4. Creativity Stage

At this stage, you have actually broken away from the process of learning skills, learning work methods or experiencing some training in the “status stage”, and entered a kind of creation. At this stage you can try to feel different economic models, business models, or experience the value of real things; and you can start to have some ideas, to make some improvements.

When you combine the skills gained from the status stage with some ideas from your second creativity stage, you start to do something.

5. Contribution Stage

These things can be sharing your thoughts and ideas, sharing your cognition and views. When you go to be your most authentic self, actually you will have some contribution to society.

Because you are a real you, not someone who works for work, or does things others tell you to do for the survival stage. You are not an executor, you are an artist with ideas and creativity.

Others can always feel the most real you, and then you will feel that work is no longer work in the traditional sense, but a kind of rest and enjoyment, because you are really doing something you want to do.

The Entrepreneur’s Growth Path

From the above four levels, we can see that everyone’s different views on money determine what behavioral manifestations they will have. For example, if you start a business, you will actually enter the following stages:

1. Survival mode This is the most basic stage.
2. Status mode You need to go through this mode to gain some connections and resources.
3. Creativity mode You must do something creative to get customers.

At the same time, this thing itself will also help others, only in this way is it valuable, and you can succeed in entrepreneurship. So you can see that entrepreneurs themselves include these stages.

The Art of Life: Making Money While Playing

Actually, I also mentioned through Naval before, that if you do things you like, you can persist, and you can also get paid. So, the art of life is “making money while playing”, this sentence is from Dan Koe.

When we first enter this society, we are actually told to “do this and that”, and then go to work. Actually this is brought by the social system, we are trapped in this responsibility, trapped in this cage. One third of life is work, if you don’t like this job, then it’s actually quite sad. When we are in survival mode, if we treat it as a career, sometimes we need to do something challenging. Only in this way can we pursue and quickly enter the “status stage”. Because when you do challenging things, whether for your thinking, training or life, at least it will bring some tempering, making it easier for you to enter another stage, which is the so-called status stage. In this way, you can slowly transition to the so-called creativity stage and contribution stage.

You make a certain contribution, and life becomes more meaningful, this is also what Dan Koe wants to tell us.

The Truth About “Lying Flat”

Some people may ask: “Then why should I enter such a life state?” Actually, if you really don’t work and choose to “lie flat”, you will find that you will actually crave work. Some people may refute saying they won’t, but once a person completely stops working, his personal value actually has nowhere to be reflected.

The “work” I’m talking about here refers to doing things you really like. For example:

1. I wrote an article today
2. I went to see something very good and fun, and share it with you, talking about my experience and thoughts

These are also a kind of work. But this kind of work can be seen as a play, a kind of playing.

The Essence of Money: An Energy Exchange

Money itself has no meaning, money is just a tool. The reason we can use money to help health, build relationships, and do things we want to do is because money itself represents a kind of energy.

This energy comes from you helping others solve problems (whether in life or other aspects), and thus through equivalent exchange gave you money.

So essentially, as long as you do something you like and can create value for others from it, then making money is not a problem at all, and you won’t be trapped in the work circle. Many jobs nowadays, such as executives or many working people, basically everyone is trapped in survival, status and position, without further entering the stages of creation and contribution.

How to Learn the Skill of Making Money?

Finally, let’s talk about how to learn the skill of making money.

That is to say, there are differences between people. But when you do these things, they are all people like you, people like you will be attracted by someone like you. There are thousands of people, as long as 10 people, 100 people, 1000 people are attracted by you, then you are actually providing some value to these people.

The reason why we say you need to become is the premise: can I become an expert in the problems encountered by these 1000 people.

I can feel what the problems are inside, because I am truly and realistically feeling this product, so what I produce is expert-level work in this field. My product actually develops like a plant, like a person, constantly growing and evolving.

And I can have some people like me, such as seed users or angel users, to help this product grow. I believe that in this era of digital products and services, Everything can be sold, right?

The Essence of Products: Solving Problems

From this perspective, when we start thinking about selling something, we can actually view it, whether it’s software, products, courses, or 1V1 consulting, as an ecosystem, or a “niche”. These things are essentially all products, you don’t need to care too much about the form, the key is to solve problem.

Solve problem is not achieved overnight, the premise is that you can truly feel the problems inside, and can truly build something. This thing can be an idea, or it can be your thinking. Everything, as long as it can make another 1000 people feel “Yeah, it works, it’s good”, that’s enough.

The Importance of Promotion: Even Good Wine Fears a Deep Alley

In addition, there is actually a saying: “Even good wine fears a deep alley”. After you make something, how will your seed users come? You still need to promote, that is, promote yourself to others. You need to rely on this ability to attract others and deliver truly useful things to them. I think when many companies say “growing with customers”, this is actually what it means: you need to truly walk into users, and they are your target users. By continuously iterating and persisting with your product like a plant, I believe it will definitely be able to grow.

Why Understand Psychology?

1. Human psychology is very subtle (a) Many times you need to feel the essence of this matter (b) This decision is judged by yourself

2. The critical nature of decisions (a) Decisions determine whether you can make a contribution, or produce contribution (b) This contribution is based on “the right people, the right things”, not indulging yourself on a wrong path

Summary

To summarize: Your pain about money comes more from “cognition” and “mindset” rather than money itself; making money is a skill that can be learned, and the real obstacle is often your misunderstanding of money and self-limitations.

Transform from “money scarcity anxiety” to “value creator”: break the scarcity mindset, improve money cognition, treat making money as a learnable skill, by doing things you like and can solve others’ problems, achieve creation and contribution, and naturally receive rewards.