What are the 3M’s of money ?
The 3M’s of money provide a basis for describing the journey of money through all its life cycle phases and the way we interact with money throughout our lives. The three phases associated with money are fairly straightforward; however, they feel like a lot to comprehend because there are many complexities associated with money management.
.png "What are the 3M’s of money ?")
Phase 1: Making Money – This is where you generate your income. This is the first phase of your money journey (requires input).
Active Income (work, freelancing, etc.) Creates Profits SCALABILITY – In order to increase your generating ability, you will usually need to consider up-leveling, negotiate for higher wages, or develop a secondary source of income.
GOAL: Create More Income/Profits Than You Need For Your Basic Living Expenses (surplus).
Phase 2: Managing Money – For most, managing is the hardest "M" because of the amount of discipline required to accomplish it. It is not only "how much" you make or produce that is most important; it is also "how much" you keep.
What are the 3M’s of money ?
Budgeting (Tracking your spending). Spending money on things that do not add value or benefit you is often one of the biggest areas for catching wasted/unused money.
Defense (financial defense) This phase is your financial defense; it will protect you from debt and give you a reserve of money for an unexpected incident.
GOAL: To create a positive cash flow that allows you to continue to build fuel for phase 3 and for your future.
Your money begins working for you instead of you working for it in this phase. This is where the emphasis is placed on growth and long-term security.
Compounding: The use of assets such as stocks, mutual funds, real estate, or business equity to build wealth over time.
Passive Income: Developing income streams that require minimal effort on a daily basis after they have been established.
The objective of this phase is to build up enough money from your investments so that they provide enough money to support your lifestyle which will lead you to achieve financial independence.
Summary Table
| Component | Focus | Action |
| Making | Income | Upskilling & Hard Work |
| Managing | Retention | Budgeting & Discipline |
| Multiplying | Growth | Investing & Patience |
.png)
