Capital is Queen in My Dream of Money Mastery

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Changing Beliefs about Money

Today’s post is about how accomplishing my dream of personal finance mastery is going to require more than technical change. It’s going to require adaptive change.

A technical change is a skill or a task you can learn, like balancing the checkbook, monitoring the bank balance, or waiting 24 hours before making any unplanned purchases.

An adapative change is a shift in values, beliefs, and underlying behavior.

It can be safely concluded that:

  1. A technical change cannot really take hold unless it is accompanied by an adaptive change (this is why diets do not work); and
  2. An adaptive change is harder to accomplish than a technical change, so a lot of times we skip it. This is why so many of us are still overweight, even if we’ve been on diets.

I recently realized I need to consider some adaptive changes in my financial life. The realization came to me as a result of a passing comment made by one of my clients. He said:”I don’t like being under-capitalized.”

I thought to myself: huh? What means under-capitalized? So, like a good coach, I asked him.

There followed a detailed story about the time he was building a house at the same time he was renovating his office and how he spent many a night lying awake, mentally calculating whether he should pay for the window glass or the carpet, and what each choice would mean in terms of delay, cost overruns, and unforseens.


Being under-capitalized means “not having enough money.”

News flash. I don’t like being broke either!

But the more I thought about it, the more the term “under-capitalized” seemed like something subtly other than “being broke.”

Being broke has a bum-sounding quality to it, with no small tinge of ineptitude. It’s mildly amusing to hear someone say, “There was more month at the end of my money.” But as my long-time best friend Dave says to me whenever I shrug off circumstances I believe I can’t control, “Too passive!”

Being under-capitalized sounds more sophisticated, or wise, or intentional somehow – and not just because it’s a $65 dollar word. For indeed, what is capital? According to my computer system’s convenient dictionary:

Capital (n): wealth in the form of money or other assets owned by a person or organization or available or contributed for a particular purpose such as starting a company or investing.

Several words jump out at me: “owned,” “available,” and “particular purpose.”

I’m not going to look those up in the dictionary, but I am going to invite you to consider them with me.

When I think of being broke, I don’t have a mind set of owning money.It feels more like money is passing by on the way from somewhere to somewhere else, with me as the conduit. I exert no real control, nor do I add any value. (My inner Dave whispers: “Too passive!”)

“Undercapitalized” feels much more owner-ish.

Capital sounds like something that makes life goals and experiences possible. Capital is an asset, and assets require care and nurturing. Cash is to capital as renting is to owning. You’ll keep the rental clean, but you’ll enhance and maintain the home you own. With an asset, there’s a contribution you’re called on to make to conserve and add value.

Cash may as well pass me right by, but capital – that takes some effort on my part.

And what about “available?” When I’m broke, the concept of availability is about cash flow – when is it coming in, and when does it have to go out?

Focusing exclusively on not being broke is tactical. It involves borrowing from Peter to pay Paul, or shopping at the Grocery Outlet instead of Whole Foods, or buying Rachael Ray cast iron instead of Le Creuset.

Focusing on capital is strategic. It involves determining the relative importance of regular ingestion of whole, organic, unprocessed food today vs. preserving capital to live on ten years from now, when you’re old.

Focusing on cash slaps a band-aid on an owie. Focusing on capital makes you look at your life.

And now we come to “particular purpose.” In the world of broke, the particular purpose of cash is to get the bills paid. That, and buying that shiny object dangling in front of our eyes every minute of every dang day.

In the world of capital, the particular purpose is to exchange value for value, hopefully with a soupcon of growth thrown in the mix. And, by the way, value is a floating norm. You can’t just decide what has value once, and then never think about it again. You have to keep asking yourself, “Why was I going to spend this again? Does that still matter to me, in the larger scheme of things?”

Cash comes from behind. Capital thinks ahead.

I confess that I can get all spun up over theory, quite often to the point that nothing changes at all in practical terms. (Regular reader(s), you can wipe that shocked look right off your face now.)

In fact I am still processing and trying to understand my own thoughts on this topic of being undercapitalized vs being broke. I haven’t even started thinking yet about what being “adequately capitalized” would look like for me.

But here’s what I do know.

Looking at my bank balance without any sense of meaning or intent is not going to be a lasting change. It’s technical, not adaptive. Until I get my values and beliefs squared away, everything else is just the proverbial deck chairs on the Titanic.

How about you, World of Dreamers? When you think of dreams you’ve achieved, what adaptive changes made them happen for you? And what adaptive deficits are stopping you from progress in your current dream?


Jayne Speich is a small business coach/consultant who writes, thinks, and coaches extensively on customer service, business finance, and ways to thrive in the new economy. She is the owner of Onsys21 Dental, a coaching/consulting firm for dental practice owners. You can sometimes find her at Jayne’s post day is Saturday.

  • Remy Gervais, Top Photographer

    Jayne, timely as always – the days of shrugging off need to be OVER! xox Rem

  • Rayne

    I’ve interviewed a lot of millionaires, a lot of moguls, and I find two typical facts for self-made wealthy types. First, they enjoy adding up long columns of small numbers and relish analyzing how paying for something sooner, later, up front, cash, credit, etc., is like a game. Second, the smart ones have usually lost a fortune during their lives and had the character and drive to rebuild. They’ll never miss an adding mistake on a restaurant bill, but they usually tip pretty good because they started with nothing and remember weeks of Cup o Noodles. Great post. Thanks for the food for thought.

  • I love this “Cash comes from behind. Capital thinks ahead.” What a great statement!

    I know when I was rolling in the money I had a great savings account. I didn’t go on crazy trips or spend wildly. I just put it in the bank. The most money I spent was taking incredible care of my vehicle.

    My issue is not over-spending, it’s under-capitalization which can happen when you are trying to change your stars.

    This is possibly your best post to date! Loved it.


  • Jayne – thanks for the great perspective. I had to take a deep breath after reading your post since this whole money thing is such a big thing in my life to. I have learned to enjoy Grocery Outlet but miss Whole Foods so I’m with you there.

    My husband and I had a great conversation last weekend on how much we have learned these past few years financially. Yes, the days of shopping trips every weekend are long gone. But now we know that was a crazy way to treat money and know that when the money does start to flow, we can treat it better… put it to work.

    – Heather

    • Jayne Speich, Financial Assistance

      I really appreciate that you commented Heather. I have no doubt lots of people are struggling with their relationship with money, but it sure does help to know for sure that I have company!

      Sounds like you are on the other side of your adaptive changes. That’s inspiration for me to keep working on it –