Weekend Reading: Two Types of Money Problems
This article appears as part of Casey Weade's Weekend Reading for Retirees series. Every Friday, Casey highlights four hand-picked articles on trending retirement topics and delivers them straight to your email inbox. Get on the list here.
Published in 1943, Abraham Maslow's Hierarchy of Needs outlines how human needs progress from basic necessities (like food and shelter) to higher-level desires (like affection and self-esteem). This hierarchy is essential because addressing needs out of order doesn't work. Your financial well-being follows a similar pattern.
READ THE ARTICLEThe two types of money problems: Type 1 problems are straightforward and include necessities like food, water and shelter. They can be resolved with more money. Type 2 problems, however, involve more nuanced psychological issues like self-esteem and achieving your full potential. When Type 1 problems are solved, you can face more complex questions, like the fulfillment of your work, fear of failure, maintaining your lifestyle, etc., which fall under Type 2 problems.
Type 1 problems are static and individualistic, as they are about personal survival. On the other hand, Type 2 problems are dynamic and pluralistic, involving comparisons with others and adapting to changing life circumstances. This goes to show that material problems don't disappear with wealth; they transform into intrinsic problems.
Your hard-earned dollars can keep a roof over your head and food on your table, but without understanding the meaning behind the money, how can you expect it to bring you a purpose-filled life?