Three Money Skills Model

A framework for understanding the three distinct skills needed for financial success: making money, managing money, and spending money. Each requires different capabilities and mindsets.

The Three Money Skills

• Making Money

  • Focused on creativity and invention
  • Strong at building things from scratch
  • Entrepreneurial mindset
  • Not necessarily correlated with being good at managing money
  • Example: Being good at creating income streams

• Managing Money

  • Requires different skillset than making money
  • More focused on due diligence and analysis
  • Excel-heavy, analytical work
  • Example: Real estate investing requires strong management skills
  • Many people who are good at making money struggle with this skill

• Spending Money

  • Most overlooked of the three skills
  • Nobody teaches how to spend meaningfully
  • Requires conscious thought about value and priorities
  • Important to develop intentional spending habits
  • Often neglected in financial education

Key Principles for Each Skill

• Making Money

  • Focus on creating value
  • Build sustainable income streams
  • Leverage creativity and innovation

• Managing Money

  • Run the numbers carefully
  • Focus on long-term planning
  • Make analytical decisions
  • Avoid emotional decision making

• Spending Money

  • Develop conscious spending habits
  • Align spending with personal values
  • Focus on meaningful expenditures
  • Don't feel guilty about intentional spending

Common Mistakes

• Assuming being good at making money means you're good at managing it
• Neglecting to develop spending skills
• Focusing only on saving without learning to spend meaningfully
• Not recognizing these are distinct skills requiring different approaches

The key insight is that these are three separate skills that need to be developed independently, rather than assuming proficiency in one automatically leads to proficiency in the others.