The Many Types of Currencies

This was originally published on Medium in 2015

Four Currencies:

1. Personal

2. Career

3. Social

4. Financial

Here’s the idea: you can trade them amongst themselves and you can apply time and energy to build one or several up at a time. Ideally all four, but that’s actually pretty rare in real life.

Let’s start with financial since it’s the most common and straightforward. This is the act of trading time and energy for money. It’s a job. You go to work, do the task and at the end your bank account is a little bit fatter. There’s other ways of making money, of course, but almost always there’s some trading going on there; it doesn’t just fall from the sky. You’re building up financial equity.

Career equity is the idea that within your field you’re earning recognition and respect, and that network is spreading and reaching out with every good thing you do. Notoriety, if you will. For me as a designer, this is the sort of thing like being featured on design blogs or interviewed for my work. Other designers are reading that and ‘Brennan Letkeman’ as an entity goes up ever so slightly. You’re building up career equity.

Social equity is similar but on a personal level. This is more like doing favours within friend groups. You build trust with specific people just by interacting in good and honourable ways, and they grow as a network of people you can trust and rely on in turn. You’re building up social equity.

Personal equity. This is what we might call happiness in really rough terms, more realistically a sum of things like contentedness, confidence, self-image, feeling like you matter, feeling energized, feeling loved and loving others, but also tiredness, loneliness, worthlessness, your need for space, your need for quiet, your need to mope on the couch and watch Netflix all day, etc. All those sorts of well-being emotional things that make up you.

The second half of personal equity is time and energy. Time and energy is a resource that recharges at a rate directly proportional to those emotional aspects: if you’re energized and confident you’re going to get a lot done. If you’re sad and need to be alone, you won’t be productive but you’re in the process of rebuilding that resource. It’s just a necessary time spent waiting to be full battery again. If you don’t recharge we call this burn out — you physically can’t go go go 100% all the time. Eventually the resource depletes to a critical level and you crack.

There’s a neat feedback loop inside there though that says you can spend a little time and energy in exchange for a bigger recharge boost. These are things like exercise, eating right, taking breaks, doing things you love just for the sake of doing them and at the more extreme end of the time spectrum, vacation and sabbaticals. This is a powerful and often overlooked part of the human.

Quick example: lets say you’re low on energy and the brain is telling you it’s tired, that it wants a break. You just want to lay on the couch, crack a cold one and watch TV. This is worth (in completely made up units) 1 recharge point per hour. You watch TV all night and you gain 4–5 points in exchange for a few hours of time and zero energy. The next morning you wake up and feel a bit better: successful rest. This is pretty typical, I think, of the average working person’s schedule.

Contrast that to the loophole which counter-intuitively says you could instead work out or do something rewarding at the expense of more energy but at the end reward you with more recharge points. So lets say you go for an hour walk or bike ride or workout: you’re actually spending time and energy in your so-called “leisure time” and your brain hates this. It wants to watch TV and spend zero energy so it’s resisting this activity every step of the way. But! (and basically every study on this topic confirms this) you’re guaranteed to feel disproportionately better after that activity than you would laying around. So you spend 2 points and gain back 10, or more. I’m making these numbers up. The point is, the net sum of the activity + resulting recharge is greater than the net sum of 0 activity + resulting recharge. You gain back points really fast and hard this way even if your whole body is trying to tell you it doesn’t want to get up.

The feedback loop there is that as you exercise and benefit from that energy, you have more energy to exercise and it starts to grow and sustain its own momentum. Starting the ball is hard; maintaining the roll is easy.

Okay, so the other currencies.

There’s a sort of pseudo currency which I’m just going to call ‘lifestyle’ and this is less an accruement thing and more just a fuzzy status thing with a handful of positions ranging from living in the gutter to living in unabashed luxury. Lets call it 1–5 on the lifestyle meter. Notice I didn’t say rich-ness meter: money is only one of the four currencies you can spend to get and maintain lifestyle gains.

Since we’re here: money is one of the four currencies you can spend to get and maintain lifestyle gains. This is the most obvious of them again: you trade your time and energy at work for money, you spend the money on upgrading your lifestyle. Buy that TV, buy that Porsche, buy that house, buy that yacht, buy that personal Death Star so you can fly around space and blow up planets, whatever. You’re trading time and energy for money at some exchange rate, and then money for lifestyle at some exchange rate. Some exchange rates are better than others: an hour at minimum wage in a McDonalds kitchen is a lot of energy for not a lot of money compared to an hour of design where you sit in a comfy chair and wiggle a little plastic thing on the desk for a bit and somehow earn hundreds of dollars. Expertise earns exchange rate bonus.

Likewise on the opposite side, everything from coupons to buying straight from China via the internet is an exchange rate bonus on money -> goods purchasing power. Finding deals is time and energy spent earning money but not directly and is often at a highly amplified exchange. You can spend an hour working and make $25 or you can spend ten minutes looking up a coupon to save $25. One is worth 6x the other (and less taxes for both income and sales tax!). This too is an expertise thing: being an expert deal finder is an art form.

Career equity and social / personal equity are more nebulous because they’re interpersonal but also more straight forward because they’re pretty direct trades: you can’t shop around for the best deal on a favor from your best friend.

Let’s assume you had zero money but didn’t want your lifestyle to dip. You’re holding at a nice middle class 3 and just lost your job, or you went on a several month backpacking trip and you just arrived back in town penniless, or maybe your spouse wants to break up and kicked you out. That sort of thing. There’s a bunch of approaches here, but I’ll try to give examples of the major trades.

1. Social equity: you call up your friend(s) and ask if they have a couch to crash on for a bit. If you had a sufficient number of friends you could in theory never rent or buy a house again. It would be ridiculous of course, but you could somehow have amassed so many generous friends that you’re guaranteed a spare room to sleep in every week for the rest of your life. Depending on your friends, you might also have a lifestyle bump up or down — lifestyle is not directly proportional to money.

2. Career equity: you call up an industry contact and ask for a job. This is sort of a roundabout resource since you’re trading career equity for a job which would then allow you to trade for financial which trades for lifestyle. Still, it’s a point of stability to have career network — many people fear losing their job simply because the trouble finding a new one is scary and overwhelming. The ability to easy snag a different gig is in itself stability. You don’t need to maintain one job, you need to maintain your cash flow.

3. Career equity in the future world: you start a Patreon and people everywhere crowdfund your life. This is an exchange of network and career equity / fame for money directly: your time and energy now goes towards those people rather than one traditional job and thanks to the internet there’s enough people for that to actually support someone’s lifestyle needs.

4. Career equity: you know the guy who makes / sells the goods you need directly. This is another far fetched one, but in theory you could know the supplier of every single thing you want in life and leverage them all for free / cheap stuff, maintaining and growing your lifestyle entirely independently of your money. This is a powerful exchange rate one I’ve learned, and that is trading time and energy for money and then trading it back for goods is a very lossy process. There’s a lot of overhead between each trade in commuting, inefficient working productivity, taxes on income, account fees to store the money, taxes on spending, the mark up of retail and the whole supply chain, etc. and in the end, most of the things you truly like and want are made by people who you’d really get along with. Making friends is a completely natural process and if you’re not slimy or exploitative of this fact, you tend to get rad stuff outside of that lossy system. This goes both ways: as a maker myself, I’m happy to give rad stuff to them too because I like making it and they appreciate having it (side benefit: +personal equity in craftsman pride). There’s a value differential between how much it’s worth to me to make and how much it’s worth to them to receive and since we can gain social equity and lifestyle in both directions of trade, it’s a very beneficial thing. (it should be noted, straight up trading is technically a taxable process — giving things away to people because you love to do so is just generosity. Call it social equity, but you can’t tax friendship)

There’s many many others of course. You can pull on career network to make friends and your friend network to make career waves. You can spend money to make time and save energy in the form of convenience, automation or hiring assistance. You can spend money to buy personal time at a spa or travelling. You can use travel as a way to make friends or career contacts. Travel might not be a currency itself but it’s all interconnected. There’s a trap where you trade career equity for ego, either because you climbed a ladder or because you’re internet famous. Ego isn’t an inherently useful resource so that trade just sort of dies there: stroking your misplaced sense of prestige. You can trade prestige back into career equity but take a massive hit in exchange rate on the way down (see Tom Cruise’s mid-career).

Risk and security are big factors in people’s lives. They assume (or I did, growing up, at least) that money is the only path to freedom but grow to learn that friend networks and career networks can be leveraged in incredibly powerful ways. Stability can be achieved not only in keeping your job forever, but in the security that comes with always being able to find a new job in a pinch or always being able to live without needing money because there’s other equity to draw from. It’s cliche but fits within the above rules: being rich is such a small and independent part of being happy. That personal equity — that happiness — is often neglected in the pursuit of money because you’re not getting the love or exercise or personal time or whatever that sum up to make satisfying feelings like pride in your work, having a family network, friend network or feelings of value that the non-money equities can bring.

TL;DR

Exercise and personal well-keeping is a modifier for boosting gains in time and energy and can be hacked into a positive feedback loop.

Time and energy can be traded for lifestyle via a variety of paths, only one of which is money.

Trading with the most beneficial exchange rate is a function of experience.

You can trade time and energy into one or more of social, career, personal or financial equities and ideally your day to day activities should be hitting more than one of them at a time for maximum benefit.

If you only trade for one of the equities, you’ll inevitably end up unhappy: it requires balanced growth around all of them to feel complete.