Monday, December 22, 2014

The Dangerous Conflation of Money and Self-Worth

One of the big dangers that entrepreneurs (and everyone else) face in Silicon Valley is the temptation to conflate money and self-worth.  I was reminded of this by an entrepreneur that I'm coaching, who has been dealing with the whipsaw effect of fluctuating net worth and income.

Making money and/or getting a big payday through a liquidity event feels great.  And I'm not arguing that you shouldn't celebrate such good fortune.  I love to see hard work rewarded.  But you need to remind yourself that the money doesn't change who you are, even if it changes how other people treat you.

Tying your self-worth to your net worth feels great when your net worth is skyrocketing.  But it sets a dangerous precedent because net worth (and any associated adulation) are extrinsic motivators, rather than intrinsic, and people who focus on the extrinsic have been shown to be much less happy than those who concentrate on the intrinsic.  It also moves you towards a fixed mindset ("this result proves my worth") rather than the healthier growth mindset ("I'm glad that my hard work resulted in this financial success").

This is not to say that money is irrelevant; it is a tool, a useful metric, and something that eliminates a certain class of worries.  But it does not change who you are.  Even people who feel that money has “changed them” are simply dodging responsibility; they changed themselves in reaction to the money.

At a time when 50% of conversations in Silicon Valley are about "unicorns" and the other 50% are about the extreme cost of real estate, it's a good idea to keep reminding yourself that your self-worth has nothing to do with your net worth.

UPDATE: Now that I've gotten her permission, I can reveal that the entrepreneur who prompted this quote is Felicia Spahr, who is a wildly successful communications trainer who can help you be more charismatic and develop better social skills.

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