How much money do you need?
Once you’ve reached a threshold where you can provide for the basics of food, clothing and shelter, extra dollars really don’t buy you much happiness. This is a finding that isn’t completely without its detractors but I have found it to be largely true.
This morning, my husband drove me to the airport in our Prius. Sitting in the passenger seat sipping my coffee, I tried to imagine being .0001% happier if I was being driven by a chauffeur in a $250,000 gold – whatever model of car sells for a quarter of a million dollars. Why do people spend that kind of money on expensive cars and enormous mansions? I’ve never wanted a fifty-room mansion or a private jet. I don’t even care one way or the other about flying first class.
I’m a little person and I’m typing this on my iPad sitting in economy. I could pay $600 more to sit 20 rows closer to the front of the plane, but why would I? So I could get my Chardonnay for free in a glass instead of paying $6 and having it in a plastic cup? So I could sit on the plane sooner? I spent that extra 20 minutes waiting to board working on a data analysis plan.
That’s not to say money doesn’t matter at all. We just raised $200,000 in our first seed round for 7 Generation Games. It went to hiring a Director of Business Development to focus on sales and marketing, a new intern and a full-time administrative assistant. We also leased a second office to house our growing staff.
In my youth, I wanted to make as much money as possible because, as I told my friends,
“In business, money is how you keep score.” Having been an elite athlete, I was very focused on keeping score and WINNING.
We still want to make money at 7 Generation Games, but I’ve come to the conclusion in my not-so-youth that there are basically three uses of money.
1. To meet needs: that food, shelter, clothing that I was talking about
2. To achieve a goal: Our goal is to build a company that changes education in America. For that, we need to pay people to make our games, test our games, market our games and provide those people with an office, supplies, etc.
3. For wants: We needed another office. As nice as it would be, we didn’t need an office with a view of the Pacific Ocean. Maybe some day I will get that just because I like to look the ocean. Status – the 50-room house, $250,000 car and penthouse office all falls under wants. You may want it for the status or you may want it because you always dreamed of having a hilltop house in Malibu with an artificial waterfall.
The answer to how much money you need really depends on the use to which you intend to put it. For #1, you really don’t need that much money at all. For #2 and #3, the amount is somewhere between 0 and infinity.
If your goal is to “gain an understanding of American and English literature”, you could go to the library and check out books every day for free, join book clubs, attend free public lectures at the library and universities. There are a lot of goals – losing weight, having a good relationship with your spouse, regular exercise – that you could probably meet for free. There are others, like building a sustainable company, that cost a lot of money.
The same thing can be said for wants – plenty of people seem to have an insatiable desire for status symbols. Others just want expensive things, for example, to be able to fly a plane.
My point – and I know you suspected there was one in here somewhere – is that if you examine the use to which you are putting your money you may find that your startup requires less than you think and you have more available than you think.