Money & The Capability Crisis™
Who’s the clever one?
LET’S HAVE AN HONEST CONVERSATION
Last Friday I went to a reunion with a difference.
Every four months, a group from the class of ’71 gets together in Portchester, the small community near Portsmouth where I grew up.
It was the brainchild of Tony, who I went to infants school with, and Pete, who I met later at grammar school.
There’s a photograph, from 1959, showing the first year at Manor House. A group of bright-eyed four- and five-year-olds who had absolutely no idea where life was going to take us.
Last Friday I found myself talking to Roy, whom I’d known since infants and junior school.
He said something that made me think.
“Neil, you were the clever one, going off to Prices.” Prices was the local grammar school.
I looked at Roy and said:
“Roy, I see it quite differently. You’re here. You had a career. You have a pension. You’re retired, like all these others here. I’m still working. I don’t have a pension. Who’s the clever one? It’s you.”
It was said with a smile. But I’ve been thinking about it ever since.
Because it raises a question that perhaps we don’t ask often enough.
How many of us are truly financially capable?
The Salary Slave
Years ago, I coached a very successful businessman who earned several million pounds a year.
He described himself to me as:
“A salary slave.”
Another client once looked around a bustling City restaurant and said:
“Look around, Neil. Everyone here is just two pay cheques away from poverty.”
An exaggeration, perhaps. But the principle isn’t.
You can earn a great deal of money and still be financially dependent.
And you can earn considerably less and gradually build financial independence.
That distinction matters.
According to the Financial Conduct Authority (FCA), 13.1 million UK adults carried a heavy burden. In 2024, almost one in four had low financial resilience, characterised by low savings, financial difficulty, or struggling with bills and credit commitments.
So perhaps we need to distinguish between two things that sound similar but aren’t.
Financial literacy ≠ Financial capability.
Financial literacy is knowing about money. Financial capability is being able to do something with what you know.
To earn it, manage it, keep some of it, plan with it, invest it, create with it, and, eventually, use it to give yourself greater choice over your life.
That is capability.
Mr Micawber Had It Right
Charles Dickens understood the principle more than 170 years ago.
In David Copperfield, Mr Micawber offers one of the simplest pieces of financial wisdom ever written:
“Annual income twenty pounds, annual expenditure nineteen pounds, nineteen shillings and sixpence, result happiness.”
Spend just sixpence more than the £20, and the result becomes: “misery.”
That’s it. Everything else starts there.
Money in > money out.
Something remains.
And what you do with what remains begins to determine what happens next.
George Clason expressed essentially the same principle in The Richest Man in Babylon:
“A part of all you earn is yours to keep.”
The idea was to keep at least a tenth.
Save it. Then put what you’ve saved to work.
Compound interest has been called the eighth wonder of the world.
Whether it deserves the title or not, the principle is extraordinary.
Money begins to create money.
And time does much of the work.
Money Today. Money Tomorrow.
I’ve spent much of my adult life on the other side of this equation.
I ducked out of conventional corporate life relatively early.
That gave me independence. But independence and financial security are not necessarily the same thing.
There is something wonderfully reassuring about knowing that a salary will arrive on the same day every month.
A pension takes that principle even further. Work now. Save now. Receive money later.
When you choose the entrepreneurial route, life can feel rather different.
You’re back to being a hunter-gatherer. The next client. The next project. The next contract. The next cheque.
I’ve lived with that uncertainty for much of my adult life. I’ve always had an ambivalent relationship with money, and I once summed it up this way:
I was never motivated by money per se. But I was certainly motivated by a lack of it.
Money somehow appeared when I needed it, and it had an irritating tendency to disappear when I pursued it too enthusiastically.
Looking around that reunion brought the contrast into sharp focus.
My old school friends had converted years of income into something else.
Security.
A pension. Savings. A house. The ability to stop working.
They had converted money today into money tomorrow.
And there is capability in that.
Security or Freedom?
But there’s another side to this.
Had I followed the same path, I suspect I’d have been miserable.
I have always valued independence.
The freedom to choose what I work on. The freedom to create. The freedom to walk away. The freedom to pursue an idea simply because I believe it matters.
That freedom has a price. Uncertainty.
So perhaps the choice isn’t:
Security or freedom?
Perhaps financial capability is about developing enough control over money that you can have more of both.
That changes the question. Money itself isn’t the objective.
Agency is.
The ability to make choices because you want to make them, rather than because your bank balance, employer, creditor or circumstances have made them for you.
Somerset Maugham once described money as a kind of sixth sense, without which it becomes difficult to make full use of the other five.
I increasingly understand what he meant.
Money creates options. A lack of it removes them.
Money and Responsibility
When I recently wrote about The Eight Human Capabilities You Can’t Download, I included:
Responsibility — Take charge.
But perhaps I didn’t take that far enough.
Responsibility must include financial responsibility.
Responsibility for what you earn, what you spend, what you save, what you owe, what you invest.
Responsibility for tomorrow as well as today.
That doesn’t mean everybody needs to become wealthy.
Nor does it mean everybody should become an entrepreneur.
Roy’s route was different from mine.
Looking around the reunion, I’m not at all sure mine was cleverer.
And that’s rather the point.
Financial capability isn’t about how much money you have.
It’s about the relationship you have with it.
Can you live within your means?
Can you withstand a setback?
Can you plan beyond the next pay cheque?
Can you delay consumption today to create choices tomorrow?
Can you create value rather than simply consume it?
Can you use money rather than allow money to use you?
Those are capability questions.
The Capability Crisis™
We educate young people for years.
We teach them mathematics, English, science, history, geography, languages, and technology. But how deliberately do we prepare them for one relationship that will influence almost every day of their adult lives?
Money.
They will earn it, spend it, borrow it, save it, invest it, lose it, argue about it and worry about it. Maybe they will inherit it, or even create it. Eventually, they will discover that the decisions they made about it twenty, thirty or forty years earlier have quietly shaped the choices available to them today.
That isn’t merely financial literacy. It’s human capability.
And that’s another part of The Capability Crisis™. Perhaps one of the most important parts, and we assume people will somehow work it out.
Some do. Some don’t. And the consequences can take a lifetime to reveal themselves.
Who Was the Clever One?
Which takes me back to Roy.
Perhaps neither of us was cleverer.
We simply made different choices.
He chose a route that eventually gave him security.
I chose one that gave me independence, uncertainty and the freedom to create.
And even now, I’m still learning and earning.
That may be the most important point of all.
Capability isn’t something you acquire at twenty-one and carry around fully formed for the rest of your life.
You keep developing it.
Sometimes rather late.
And sometimes an old-school friend, sitting opposite you at a reunion more than sixty years after you first met, holds up the mirror, and you learn something very profound: money isn’t freedom.
But financial capability gives you choices.
And choices give you the opportunity to live more freely.
You can’t download capability.™
You have to build it.
— Neil Tuson
Five Key Insights
- Financial literacy is knowing about money. Financial capability is being able to act effectively with it.
- A high income doesn’t necessarily create financial independence.
- Money today can become choices tomorrow, but only if some of it survives today.
- Financial responsibility is part of personal responsibility.
- Money isn’t freedom. Financial capability gives you choices, and choices create the possibility of greater freedom.
Want to build greater human capability?
Financial capability is one part of a much bigger picture. Discover how Perfect Teams® helps individuals, leaders and organisations develop the capabilities that create greater independence, responsibility and opportunity.
First published October 11th, 2026.
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