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Maslow pyramid of money

How do you build stability with the Maslow pyramid?

The financial Maslow pyramid, like the traditional Maslow pyramid, describes the levels of life built on each other, built one after the other. Only here from a financial point of view. Here you will need more and more money to move above, after all, you cannot jeopardize the levels below.

The Maslow pyramid of money
There are many places to hear that if you have a dream, work for it, set money aside, and make it come true. Be it a dream vacation, look at the price, or even book a trip, but buy a suitcase now. Every time you see the suitcase, it will remind you of the trip. Even if you have booked the trip, paid the advance, the obligation to pay will also tick there and will drive you towards your dreams.

In my view, this is not exactly how it works. Probably if you’re fighting for your own financial stability, repairing a constantly soaking roof will be more important than a foreign dream trip. After all, according to the Maslow pyramid below, security is more important than self-realization. Even if you go for your own money, you won’t enjoy the journey from the bottom of your heart if you know it’s not nearly all right back home. In fact, you probably won’t even pay if you’re just soaking your roof.

But let’s take a look at how the pyramid is built. Without it, basically no investment will work, and if you have loans, chances are it will fall on your head as well. By applying this scheme properly, you can successfully balance your long-term and short-term goals.

Maslow pyramid of money
Maslow pyramid of money

 

Parts for your stability

1. Survival money, which is the level of physical survival of the Maslow pyramid

This level is about your mere physical survival. How much money do you need to make

  • you can eat
  • dwell somewhere
  • if you take medication regularly, how much to take

So without it specifically, almost certain death would await you. In food don’t count anything like joining friends with a garden grill. Just how many of you are in the household and the minimum amount of food per month.

If you’re “just” here, we can’t talk about real security. If you look at the picture, you can see that this is just the level of physical survival. Without physical survival, no dream can be imagined (who would have thought?), so you need to know what level you can no longer go below.

2. Security money

This level includes the budget, maintaining financial balance. This is where your emergency reserve is built up and you also have the opportunity to maintain your health (eg dentist).

This is the Security level for the traditional Maslow pyramid, so everything that serves your security is built here. Therefore, this section is not just about your short-term security. Here you can plan your retirement, here with insurance you make sure that what you have made that remains, and with insurance you protect not only the objects but also yourself. Thus, life insurance, accident insurance and health insurance also play a key role here.

In addition to maintaining your housing, your budget also includes developing it. So even the cost of a renovation is here.

If you would like to reduce this amount, please contact us to review the value for money of your existing contracts. In many places, it turned out that the customer had already paid for unnecessary items.

3. Freedom money

This is the level of “social needs” on the traditional Maslow pyramid.

At the financial pyramid, it contains the small pleasures of life here, making you feel somewhat free. It can be a holiday, but here you can also eat that dinner with friends that missed out on the cost of food for the first point.

The parts for your growth

4. Gift money, this has been the traditional Maslow pyramid Recognition level

It may sound weird why not dream money is coming now. After all, you usually set aside from your own salary for yourself.

This level in the traditional Maslow pyramid is the “level of recognition”. If you’re helping someone because, say, they are sick or have a problem (e.g., the storm has taken the top of their house), you can pocket some level of recognition for it. They may not celebrate you noisily, but the feeling of well-being is fixed.

You give up that amount in favor of someone else. This someone else may be your own child and you are paying for his or her teaching out of this. But this is the money you have helped your loved ones, acquaintances. (But you can even help strangers with it.)

By the time you reach that level, you already have the stability, so that’s the money from which you can start a business. This is because a business involves a risk, so it is possible that you will never see part or all of this amount.

Entrepreneurship, on the other hand, is not self-realization. I saw few people who became entrepreneurs because they wanted a corporate tax number for themselves and also wanted to tax after their business. You typically start a business because you have a goal, a dream, for which it is a tool. This, in turn, requires a capital that you can risk for your growth.

5. Dream money

This is the pinnacle of the traditional Maslow pyramid, i.e., self-realization.

It means anything to you, you can achieve it here. When everything else is fine.

It also requires money, so you can realize your dream of self-realization, that is, with good feeling, if you live in safety and freedom anyway, and your environment is in order. To make your own really big dreams come true, you probably also need significant capital. And you can achieve this amount by taking more risk than for stability. Then you don’t have to work entirely for your own dreams yourself, but you do need to know how much time is available to you, and you have to train yourself to be able to do this.

Questions:

  1. At what level do you currently feel?
  2. How do you coordinate the levels in order to move up the Maslow pyramid?
  3. What do you think the same pyramid looks like as an entrepreneur?

If you have any questions, you can contact us here. I would also love to read your opinion in a comment.

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