I have argued previously that the Maslow pyramid is completely wrong. The different psychological levels—physiological, safety, love and belonging, esteem, and self-actualization—are traditionally presented as a pyramid, but the truth of the matter is that to be truly happy, we usually want to be doing some of all of them at the exact same time.
I have been thinking about this for a long time, and I believe the pyramid is either upside down or just entirely backward. If you want proof, look no further than the Financial Independence, Retire Early (FIRE) community.
The Trap of the Bottom Layers
Let’s look at the base of Maslow’s pyramid. The beginning consists of the basic things you need:
The first level is physiological, which includes breathing, food, water, sleep, homeostasis, and excretion.
While mostly physiological, things like food and water obviously cost money.
The second level is safety, encompassing the security of your body, employment, resources, morality, family, health, and property.
This second level is much more financial; we are talking about having enough money and safety.
It is only after we get past these highly financial physiological and safety levels that we reach the higher-level stuff:
Level three covers love and belonging, including friendship, family, and intimacy.
Level four is esteem, which includes self-esteem, confidence, and achievement.
Level five is self-actualization, focusing on morality, creativity, spontaneity, and problem-solving.
The fundamental problem with this pyramid is that the first two levels are where most people spend their time struggling. We build up this financial importance to such an extreme point that many people decide making enough money to be safe is actually the entire point of life.
Exhibit A: The FIRE Community
The FIRE community is a perfect example of this trap. We get so wrapped up in financial independence and the idea of having enough money that it becomes our overall goal.
But what happens when financially independent people reach our goal at age 35, 40, or 45? Many of us actually find ourselves anxious and worried because we didn’t work on the upper parts of the pyramid—love, belonging, esteem, and self-actualization.
Instead of going out and working on those higher-level things, a lot of the FIRE community just spends more time doubling down on the money. I certainly did at first.
We argue endlessly about safe withdrawal rates.
We argue that the 4% rule is not good enough and that it should really be 3% or 5%.
We suffer through one more year syndrome, deciding it is easier to just keep working rather than move out of the financial part to tackle the bigger things like love, esteem, and self-actualization. The rationalization? We might not have enough money! Our plan might fail.
We talk about financial metrics ad nauseam.
Flipping the Pyramid
This is exactly why I think Maslow has it completely wrong. We should not be thinking about physiological needs and safety first. We should be thinking about self-actualization, esteem, love, and belonging.
We need to decide who we want to be, what is important to us, and who the people are that we should be connected to. Those things should actually come first, and our finances should be somewhat of an afterthought.
Yes, you absolutely need enough money to have some kind of shelter and food. Let’s be honest, though: most people reading this or listening to my material are not struggling at that baseline physiological level; they have all far surpassed that. Even people globally and in the US who aren’t in the FIRE community aren’t always struggling at that level.
So why are we getting so caught up in the financial layer that we fail to move on to the other things?
The bottom of the pyramid is holding a lot of us in the FIRE community back. It is keeping us in an immature state where we never get past the money issue, simply because the money issue is the easy issue. It is something you can argue about, fall prey to for one more year, and get completely stuck on.
If we truly want to fix things, we have to stop looking at our spreadsheets. We need to start looking at our lives first, and then build our spreadsheets around that big, beautiful life.
Did you catch this week’s episode of Earn & Invest (Click to listen)?
I think that those of us who are financially driven and savers are very goal oriented and it's easier to make goals out of savings. It's harder to have goals in the self actualization level but I'm trying.
Too many people wait far too long to understand the entire point of life.