Investing · Money

Five stages of money
for founders.

Most founders move through the same five stages with money. Each one has a common mistake and a next step. The basics stay the same at every stage: earn more each year, spend less than you earn and stay out of debt.

Which stage are you in?

1. 01

   Survival

   Where you are

   The company's runway and your personal runway are the same number, and you check both on the same morning. Every decision is about needs, not strategy.

   Common mistake

   Believing the story you inherited about money — that people like you don't get to have it, or that it's owed to you. Scarcity makes you unable to see past this month's problem, and the beliefs behind it are invisible until you name them.

   What to do next

   Separate the two numbers and write down what you actually need to live on. A modest founder salary buys back the judgment that scarcity takes away.

2. 02

   Stability

   Where you are

   The bills are covered and the business pays you. The fear is gone; the habits from Survival are not.

   Common mistake

   The leaky bucket. Income rises, debt and lifestyle rise faster, and you're back to Survival at a higher burn while calling it growth. Debt is the one thing that gets more expensive the better you do.

   What to do next

   Hold your living number flat for two more years and point everything above it at debt first, then reserves. There is no version of this that skips the hard work.

3. 03

   Enough

   Where you are

   You could stop and be fine. Most founders pass this rung without noticing, because the number they once called enough quietly moved.

   Common mistake

   Ego. Enough stops being a number and becomes a comparison, and comparison has no top. This is also where founders start hunting for the one big outcome that ends the game — the same instinct that leaves most lottery winners broke.

   What to do next

   Write the number down, with your spouse in the room. Once it exists on paper you're playing a different game than the people around you.

4. 04

   Freedom

   Where you are

   Money buys time and choices instead of status. Technology means one person with judgment can now earn what used to take a department, and you feel it.

   Common mistake

   Boredom. Founders in Freedom take bad deals for stimulation and lose years they never needed to spend.

   What to do next

   Set goals that aren't financial, in writing, with dates. Without them the money just refills the calendar.

5. 05

   Stewardship

   Where you are

   The question changes from how much to what it's for and who it goes to. People with far less than you have reached this rung long before you did — it was never about the size of the pile.

   Common mistake

   Waiting for a tidy end state before you give anything away or hand anything over. It never arrives.

   What to do next

   Move something real this year — money, ownership, or a seat at a table — while you're still around to see what happens with it. Then read on: you have money and you're busier than ever.

Next: Time