When we say “money is power,” we usually mean it in terms of “wealth accumulated.” Underlying this definition is the belief that money only retains its power as long as we don’t spend it.
As a simple example, we would say that someone who has $100 million can “buy or do anything they want.” They could own a fancy mansion, buy their way into a VIP table at an exclusive restaurant, or kickstart an influencer business much more aggressively than a non-wealthy person — but whichever of these moves they choose to make, each one would weaken their power insofar as it reduces their overall net worth. If that person spends the entire $100 million on a single real estate properly which ends up decreasing in value, we would say they’ve lost, or perhaps even wasted, all of their financial power.
This is a narrow but pervasive view of money, and it is why so many of us play the “get-rich-any-way-whichever” game. We equate money to potential, and we think the more potential we can rack up, the more powerful we’ll be.
The truth, however, is the opposite: The person who sits on $100 million but never spends it has zero power, and the person who spends their $1,500 deliberately each month has a lot of it — because they exercise their potential rather than just collect it.
We all understand this when it comes to our “personal” potential: It doesn’t matter what talents, skills, or good traits you might have if you don’t use any of them. “You’re wasting your potential!” we might implore someone who is hanging up their tennis rack too soon, but then we turn around and praise people who made fortunes only to hog them for three generations.
The true power of money lies in how you spend it. Some of the wealthiest people are starting to understand this. Bill Gates, MacKenzie Bezos, Warren Buffett — they have realized that their (financial) potential is growing faster than they can use it, and so they’ve begun making efforts to ensure all of it will actually be used, aka spent towards meaningful ends. Hence the giving pledge and massive charitable organizations in their names, employing thousands of people tasked only with finding good causes to give to and for.
If you’re living paycheck to paycheck or only have a very modest amount of savings and investments, it’s easy to feel as if you don’t have any financial power. Nothing could be further from the truth. Whether you spend $500, $1,000, or $10,000 each month, each of those dollars is a vote. A vote for the person you want to become. A vote for the world you wish to see. A vote for which causes, companies, and people you are supporting. You can vote blindly, or you can spend your dollars deliberately — and that determines your true financial power more so than how many votes you cast.
Let’s say you believe a certain brand of goat cheese is bad for the environment. You want to stop buying it, but you don’t think your $10 spent on goat cheese each month will make a difference, and so, at least if the store doesn’t have any other kind, you keep buying it regardless. This is a true example of wasting your financial power. Because our own numbers are small, we stop believing in “strength in numbers” altogether. But if everyone who has these same feelings about that particular brand of goat cheese also keeps buying it because they don’t think they can make a difference, well, everyone will be right!
The opposite scenario starts with one person, and that one person may as well be you: You boycott the brand of goat cheese, and you tell your friends why you’re doing it. Before you know it, five more people also stop spending $10 on that brand, and then 50, and then 5,000. If a million people choose to not spend $10 on that goat cheese each month, that’s a $120 million hole in one company’s revenue. It could easily be the difference between record profits and bankruptcy. But we rarely think about what’s possible. We think about the size of our wallets and conclude they’re not big enough — and then we go back to trying to accumulate more money.
None of this is to say that saving, investing, and planning for retirement are inherently bad. As with your personal potential, you need to decide which parts of it to capitalize on when, and going all-in all the time is neither possible nor advisable. Up to a certain amount, it is reassuring and inspiring to save some of your potential. But what that amount is for you, only you can determine, and it’s probably less than you think.
Regardless of how much you choose to save, what’s important is being deliberate in how you spend whatever money you do choose to employ. Which electricity company are you supporting? Are you becoming a learner, for example by buying books, or are you just idling, entertaining yourself with silly movies? Do you support a friend’s art project with a $10 donation, or do you blow your weekend budget on alcohol? These questions will reveal more about your financial power than the balance of your bank account ever could.
As long as we accumulate it, money is nothing but potential, and we all know potential is an easy thing to waste. Wealth is not strength, and riches aren’t supremacy. The power of money lies in how you spend it.