In the previous post, we discussed the book “The Psychology of Money.” If you haven’t read that post, you can check it out here. In this post, we are going to discuss something abstract, like the psychology of money.
A guide to happiness and wealth. My experience of how I switched from return on money to return on time.
In all my previous posts, we have understood different ways to optimize our finances. But then the question arises, is this all about life? The answer is not. Optimizing our finances is one part of our lives. Once we have optimized our finances sufficiently, we realize there are other aspects of life as well. Once a person has enough money, they are no longer driven by the sufficiency or lack of money in life; the driving factor changes.
This phenomenon can be beautifully understood from Maslow’s hierarchy of needs. So, what is Maslow’s hierarchy of needs?
Before that, let’s have a look at the history of Maslow.
Abraham Maslow
Abraham Maslow was an American psychologist best known for developing Maslow’s Hierarchy of Needs, a theory that explores human motivation and self-actualization.
Born on April 1, 1908, in Brooklyn, New York, Maslow was the eldest of seven children in a family of Jewish immigrants from Kyiv (now Ukraine). He faced challenges growing up, including antisemitic prejudice, which influenced his interest in human potential and psychology. He pursued psychology at the University of Wisconsin, later studying Gestalt psychology at the New School for Social Research in New York.
Maslow became a professor at Brooklyn College and later headed the psychology department at Brandeis University. His work emphasized humanistic psychology, focusing on personal growth rather than pathology. His major works include Motivation and Personality (1954) and Toward a Psychology of Being (1962).
He passed away on June 8, 1970, in Menlo Park, California. His contributions continue to shape psychology, education, and leadership studies today.
Maslow’s Hierarchy
Maslow’s Hierarchy of Needs is a psychological theory proposed by Abraham Maslow that outlines the different levels of human motivation, often depicted as a pyramid. The hierarchy consists of five main levels as shown in the image below.
Maslow, a psychologist, describes this hierarchy as the hierarchy that our society generally follows.
As you can see from the above image, the bottom of the triangle is the psychological needs, which are the basic survival necessities like Food, air, shelter, and water. This makes sense too, as a person without these basic needs can’t survive and thrive to access opportunities available around them.
The next level is the safety needs, which involve security, stability, and protection from harm; this harm can be financial, physical, or emotional. Once the necessities start to get fulfilled, the person looks for ways to sustain those necessities and create and accumulate wealth, which is what this level signifies.
The next level is associated with social connections, friendships, family, and intimate relationships. This stratum signifies the need for love, belonging, and inclusion in society after a person has satisfied their psychological and safety needs.
The next level is associated with ego, which comes from the need for recognition, self-respect, power, control, and achievement. This comes when the person has experienced all the previous three levels. This signifies the transition from survival to control.
The next level is self-actualization, which involves personal growth, creativity, and fulfilling one’s potential. This stage follows the survival and control experience, when a person searches for their purpose in life.
These were the initial levels of the hierarchy, but later, Maslow expanded his theory to include cognitive, aesthetic, and transcendence needs, recognizing that human motivation is not always strictly linear. While originally proposed as a step-by-step progression, modern research suggests that people often pursue multiple needs simultaneously.
Reflection on the Hierarchy
So now that we have read and understood about Maslow’s hierarchy, what is the use of this hierarchy? Personally, I have realized how much this hierarchy aligns with the thought process of a logical human being. Initially, everyone who starts from scratch starts from the bottom-most strata of the pyramid. Some people might start from the second or third strata from the bottom, depending on the work of their previous generations, but the majority of the people who come from the lower class or the middle class start their careers from the bottom-most strata, similar to where I started. Thus, their first goal is to satisfy their basic necessities like food, clothing, and shelter.
After this, they move to the next level where they have some residual amount after fulfilling their basic necessities. This is where they start to build their safety net, whether it be an emergency fund, their own house, or something else. This is why it is advisable to have an emergency fund before you start taking bigger risks.
When the person has fulfilled the above requirements, he or she goes into the next strata searching for love and belonging. Now this might be in the form of romantic relationships, or finding a group of like-minded people. This is the level where people yearn to find partners, build families. This only comes when the person feels they have enough to provide a better future to their offspring and people in their family, compared to what they grew up in. In this level, people also start to measure the returns not based only on the amount they earn but on the time they spend with their loved ones.
The next level, which is the ego level, signifies the need for self-esteem, power, and control. This level includes higher risk-taking in the search for a higher status in society. These risks include starting new businesses, expanding investments into equity and real estate, etc.
Once the power thirst has been quenched to a certain extent, then the person goes into the search for his passion, which is signified by the next level of self-actualizatio, which results in creativity and growth not only in material forms but spiritual form.
So, if you are starting from scratch, remember you have the responsibility to fulfill at least the bottom three levels for your coming generations, so they have a head start and don’t struggle to deal with the struggle of fulfilling the safety level. This is how you see some people in schools and colleges having a fairly comfortable life as compared to others. And if your family has already fulfilled the bottom three levels for you, you can proceed to search for your passions and utilize your creativity for them.
This is all for this post. I hope you got to learn something new from this post. Don’t forget to follow my Facebook and Instagram pages for regular updates. See you all in the next post. Till then, keep learning.