C.R.E.A.M. is a Constraint

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Quick Takes:

  • Cash is important, no matter your goal
  • Whether it be big or small, cash will always be a requirement in life
  • It's important to think of cash as a constraint rather than the goal itself
  • Understand what your ultimate goals are, and how much cash you need to achieve them
  • You always need to either expand your constraint to fit your goal or fit your goal within your current constraint

Cash rules everything around me. Does it rule everything around you? Does it rule anything at all?

People love to tell us that money doesn’t matter. But if it doesn’t matter, why are most of these people either filthy rich, working a high paying job they hate or poor and unhappy? Seems like some contradictory advice.

In a sense, then, cash does rule everything around us. Unless you want to be a bonafide vagabond (which, of course, would be awesome), money is going to be a factor in your decision-making. Even if you’re a free spirit and want to travel abroad, you’re going to need funding somehow. Now, that funding can come from your savings, remote freelance work or even as a local dish washer, but you’re going to need cash to travel.

I could go on and list all the things you want that you need money to buy, but I’ll stop here. We all know that if we want a nice house, we need a downpayment.

So, does money rule everything around you, or is it the material things that money buys that rules everything around you? Or, could it be our consumer mindset to spend-spend-spend that’s the ultimate ruler?

All of the above.

Cash has become the ultimate goal for many of us. Regardless of the driver, money has been the measuring stick of success in our society. And when pop culture popularizes songs like “Billionaire" by Bruno Mars and grants celebrity status to startup CEOs like Mark Zuckerberg, it’s easy to see why money seems so important.

And it is, don’t let me fool you otherwise. But not in the traditional way we’ve been conditioned to think. Cash is a constraint, not a goal; it should never be a goal. However, money is a very real part of the reality we live in, and to completely disregard it would be idiocy.

If we think of cash as a constraint, however, we are able to reconcile our need for money with our desire to transcend that need. We can then work within this constraint to achieve what it is we really want.

Cash isn’t a Goal, it’s a Constraint 

Why do you want to make $1 million dollars? A friend of mine asked me that the other day, and I couldn’t give him a straight answer. Sure, on the surface I knew that my goal was to become a millionaire, but I couldn’t even tell myself why, let alone him.

I quickly realized that my desire to make money wasn’t for the goal of making money, it was for the freedom that money would afford me. I wanted to become a millionaire so I could travel on a whim,  be untethered to a 9-5 job and have all the experiences I envision myself having. Money wasn’t my goal, it was just a necessary input to the goals I wanted to achieve.

Therefore, I had to shift my thinking from money being a goal to money being a constraint. If I wanted to live for the summer in Barcelona, for example, I'd need to expand my constraint so a summer abroad could realistically fit in my plans. To expand my money constraint, I would either need to save up or continue to build location-independent business (sorry, being a local dishwasher isn’t an option I’ll entertain).

So even my desire to grow my business is a constraint, and not a goal like I’ve always thought. A functioning location-independent business allows me to achieve my goal of travel.

I challenge you to think about your goals. I’m sure money will be a component, but think about the reasoning behind the desire for money. Once you get deep enough, you’ll find the true driver of that desire. When that desire is uncovered, you’ll have identified your true goal. Maybe that goal is the same freedom that I seek, or maybe it’s something more traditional: home ownership, perhaps.

Even with home ownership, view the downpayment and the monthly mortgage as constraints, not goals to work toward. The goal is the house, saving the downpayment is a necessary step to getting there. If you want a larger house with a larger mortgage, all you’ll have to do is expand your constraint.

Going even further, a certain savings goal, whether that be to build an investment portfolio or an emergency fund, would still be a constraint. If you want to build a $10,000 portfolio of diversified investments, the cash constraint is $10,000, the goal is the diversified investment portfolio. Want a larger portfolio? Well, you’ll have to loosen your constraint.

The End Game

The result of this mindset shift is that you’ll never be controlled by money again. You’ll understand that the need for money is a reality, but the cash itself is a constraint that needs to be adjusted for you to achieve your underlying goals.

Too constrained by money to live your desired life? Expand that constraint. When you know that your goals are worthy and that cash is only a component and not the end-goal itself, working hard to loosen that constraint will be easier than you think.

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