The Power of Money

Budgeting, planning and saving seems boring but for many this is the only way forward. Solid foundations will hold you when the storms come in and without this everything can be washed away.

Over the last few weeks I have been privileged to work with, or talk to, a variety of people from young children through to musicians and animators.

The one thing that was clear in all the discussions was the power of money, and the importance of engaging with it in the right way. In this blog I want to consider three case studies.

The 5 Year Old

The start of June is referred to as ‘money week’; a chance for schools to focus resources on educating children to engage with money in the right way at an early age.

My focus was on teaching the basics; beginning with pocket money to exploring whether the children were savers or spenders. I also talked about how what they might save for now will change as they get older – from sweets to a house!

In fifteen minutes this is a lot for any 5 year old to understand but one child stood out. When we talked about pocket money he doesn’t receive any (this wasn’t unusual in the group I was with) but he was saving for his favourite football team’s football kit.

Without pocket money he had to think about how to get money and then save. He did jobs for his parents and saved money he was given and so far he had saved over £100. He wasn’t sure how much he needed but it is a lesson for all of us in an age of instant gratification. Working and saving for what we want often gives greater satisfaction than instant gratification and that comes from a five year old!

The corner shop

X-Factor paints a distorted view of ‘success’ in music. The music industry paints a picture that ‘success’ is measured by fame and money. However, for some it is about entering an industry where people want to build a long term sustainable career. This doesn’t mean the artist lacks ambition but like many of us they want to work and earn a good living (and enjoy what they do!)

We spoke to Jo Harman, a successful singer / songwriter, who runs her career with her manager as a business. One of the most striking things about the interview was how she measured success. During her career she has had the opportunities to work with big labels but she has carved her own way.

For Jo the measure of success is happiness, her ethos is that if you are making great albums and a good living then that is a good measure of success.

Clearly many artists chase the unattainable, but if you focus on the basics you can make a sustainable career and perhaps that is the magic formula when it comes to the music industry.

The animator

To be sitting apposite the creator of Morph seemed slightly surreal. Morph was a character I grew up with and is quintessentially British.

We spoke about many things but one thing we discussed was whether in the early days they had compromised what they were doing artistically (or even now). Peter Lord explained that he had an old fashioned view of money. Essentially if you didn’t have the money, you didn’t have it. It was an ethos that he brought into the company.

This meant two things; firstly the compromise they made was not to invest in sophisticated modelling equipment which may have been in part a factor in their success, and second was that the business almost closed because the money wasn’t there and they weren’t prepared to compromise their values over debt.

In an age of instant gratification this company continues to be run on old fashioned values, it means they are careful with the projects they embark on and how money is spent.

The power of money

From the five year old whose parents have taught him that if he wants something he has to save for it, to the music artist who runs her career as a business, and then the animator who retains old fashioned values there is something striking in what they are doing.

They are engaging with money in the right way, and we can learn valuable lessons from their examples.

Budgeting, planning and saving seems boring but for many this is the only way forward. Solid foundations will hold you when the storms come in and without this everything can be washed away.

In summary perhaps success is not about how much we have, but what we do with what we have.

NOTE: This is written in a personal capacity and reflects the view of the author. The post has been checked and approved to ensure that it is both accurate and not misleading. However, this is a blog and the reader should accept that by its very nature many of the points are subjective and opinions of the author. This is not a recommendation to buy any product or service including any share or fund mentioned. Individuals wishing to buy any product or service as a result of this blog must seek advice or carry out their own research before making any decision, the author will not be held liable for decisions made as a result of this blog (particularly where no advice has been sought). Investors should also note that past performance is not a guide to future performance and investments can fall as well as rise.

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