Advertising
Advertising

6 False Beliefs You Must Let Go of to Make Money Efficiently

6 False Beliefs You Must Let Go of to Make Money Efficiently

I don’t really want to go much into the philosophical side of what it means to make money, but I feel that a quote by Tony Robbins really comes in handy here: “Where focus goes, energy flows.”

So what does this exactly mean in the context of our topic? Well, it is not a secret that any action that we have ever done (excluding reflexes and automated body functions), existed first in the form of a thought. Hence, our thoughts shape our life. Regardless of whether you are happy or depressed, it doesn’t matter. It isn’t the surroundings or events that make us feel that way, but our reactions towards these things. A car breaking down for one person may mean the end of the world, while another person may see it as a great opportunity to finally start using public transportation. It really is up to you how you react.

Now, coming back to the idea of making money, I must admit that I was raised with a number of limiting beliefs that I could not easily accept and let go of. In fact, most of the people I know have the same beliefs. It is just the way most of us were raised and something we never really questioned or thought of proving wrong – we simply went with the flow. But after spending some time trying to rationalize my thoughts, I finally came to the conclusion that there exists a number of beliefs that will always hold us back from making money no matter what. And the only way to battle this is by becoming fully aware of these beliefs.

1. Rich people are greedy

One of the most common misconceptions I hear about rich people is that they are greedy. They are rich, and they always want more! But how do we know this? From movies? Or from those clips that we once saw on the news? Obviously, there are corrupted people in the world that have attained their wealth in an unethical way, but what we don’t want to consider is that the world goes far beyond that. As a matter of fact, rich people are the ones to donate the biggest amounts of money to various charities, which is something that their offenders will never be able to afford.

Another thing that I have recently come to understand is that many rich people are wealthy because they dare to take action in life in a way that others can’t. Most rich people are driven by risk-taking and self-development. I think that instead of judging them, we should see them as an example of what it means to have an exciting and proactive life.

Advertising

2. I was not born in a rich family, so I can’t become rich

This is another very popular belief. Because one was not born in a wealthy family, they automatically think that they don’t have the opportunity to make a lot of money. The only way we can become rich is by winning a lottery, they say. Moreover, that becomes their excuse to avoid working hard and coming up with brilliant ideas. They point fingers at people driving a Lamborghini and say that their rich dad bought it for them.

Again, it doesn’t matter what the story is behind that young dude driving his sports car. The idea that I am trying to get across is that we should avoid irrational judgment. “Where focus goes, energy flows,” so don’t focus your mind on why it’s wrong to have a sports car, but rather on what you could do to be in a similar position, if that is what you want, of course.

Most of my life, I would look at people with nice cars and judge them, thinking that they probably never paid for that car. But with time, I learned to look at them and to admire the fact that they have the opportunity to drive the car of my dreams. I motivate myself by thinking that if that person found a way to make enough money to buy that car, then I can find a way as well. I am sure it is possible. I convince myself that it is.

3. Money will not make you happy

This one is my all-time favorite. The funny thing is, I hear this phrase more from people that are broke. Moreover, they constantly talk about all the great things that they would do if they had the money or the things they want to do in order to make that money. When they forget about what they said before, they repeat once again that money does not make anyone happy.

I don’t want to be hypocritical about this, but I also think that money does not equal happiness. However, even though I am not excited about being able to buy things for myself, I really love being able to give to other people. And guess how much it hurt me when I was not able to buy a simple gift on a birthday to my parents simply because I had no money? So, while I don’t think that money can make you happy, I think it can impact your happiness indirectly.

Advertising

By being able to help others with money, you can give them so much! Unfortunately, everything in this world costs money. And the more quality you want, the more you will need in order to pay for it. Therefore, I am aware that I must make a lot of money to be able to help as many people as possible in ways that they could really benefit from. I also feel that I could give back to my family that has put so much time and effort into raising me. I will never be able to give back all of it, but I would be extremely happy to be able to offer them the comfort that they need. Money will not make you happy, but if you know how to use it, you can make so many people around you feel so much better, be it by buying them food, shelter, expensive treatments and medicine, or just plain gifts.

4. Money will destroy your soul

I am a vegetarian and I am very big on yoga and meditation. Throughout my whole life, I was convinced that spirituality and money do not go hand in hand. It was clear to me that I must choose between the two. Thinking about the way I used to rationalize then makes me want to scream out loud now.

This belief is so powerful that it completely destroys any opportunity of making any amount of money exceeding your monthly salary. I know this is closely related to the belief regarding greed, but, nevertheless, I want to look at it separately because there is much more to it than just greed.

I used to hear stories about how people would make money, and then they would make more and more money, and would not be able to think about anything else other than money. I also heard people tell me that you don’t need to make a lot – just a bit. Well, I agree that you can be poor on the outside but rich on the inside, as well as be rich on the outside, but poor on the inside. Like I already mentioned, it is all about the mindset. You can earn millions, but still have that scarcity mindset where your fear of losing all that wealth takes over and rules your life.

On the other hand, why would money kill spirituality? Can you not meditate, do yoga, be generous, kind and loving with a lot of money? Since you have a lot more money to spend on comfort, you can probably be more loving, kind, and generous with money, than without it. You have less basic things to worry about.

Advertising

I have observed that people that do make a lot are simply more capable of making more money. By having the action-taking mindset that they do and by having more money to invest, they can afford to take more risks, and therefore make even more money. And it isn’t always about living in the scarcity mindset, but about simply rich people loving what they do and their business lifestyle. Think about it, would a lazy person be making a lot in the first place? Of course not! Only people that are passionate and ambitious find ways to create that wealth, and they will continue being passionate and ambitious even after they have become rich. It isn’t always about the wealth, it’s the attitude.

5. Make money to make the world a better place

When my friends talk about making money, they make it sound so dull, so black and white. It’s always about making big bucks and buying cars and houses. I used to also think this way, but after shifting my beliefs, I gained a whole new understanding of what making money really means.

If you think of wealth only in terms of houses and cars, you should definitely reconsider your beliefs. This is exactly why you see rich people being depressed and people like me writing about the topic. Bad examples are always a lot more noticeable than the good ones.

To be able to view richness as something worth striving for, you must create interesting, intriguing, and virtuous goals. If you see money as a way to make only yourself wealthy, it will never be a big enough motivation to actually make it happen. However, if you set real and meaningful goals, you will have a totally different attitude towards money.

Isn’t being able to build hospitals and schools for people all over the world worth living for? Isn’t being able to offer water to dry areas of earth virtuous? What about helping homeless people and animals, investing in research against deadly viruses, or helping invent new technology for the benefit of all humankind? Aren’t all those things worth getting rich for? You can do so many great things with money, and it all comes down to your imagination.

Advertising

6. Becoming rich is difficult

I don’t think it is easy either. But I do not think working your whole life eight hours a day at a job you hate is any easier. On the other hand, being able to earn a lot of money for something you love doing, and then being able to help the rest of the world, seems like a good cause for hard work.

Also, if your motivation is more than just making a lot of money, you will be able to work all day long without having the feeling that you are at work. As I already mentioned, it is all about the mindset.

Conclusion

I have many times heard that money is energy, but I was not sure about what that meant. Now I understand that making money is not only about earning the actual money, but more about the way you look at things. If you are totally confident about why you want to become rich, if you have learned to see wealth as something beneficial to the whole world, as opposed to something “wrong”, then you allow your focus to go towards that reality where money and richness are a part of your life. But if you keep judging others and finding excuses why money is evil, there is no way you will ever earn more than what you get paid at your normal job.

Get rid of limiting beliefs and don’t let anything stop you from achieving your goals!

More by this author

Victor Stepanchikov

Software Engineer, Blogger, Personal Development Freak

5 Ways to Turn Pessimism into Healthy Optimism Make Money 6 False Beliefs You Must Let Go of to Make Money Efficiently 2 Things You Must Let Go to Find Happiness and Satisfaction 12 Fundamental Time Management Tips that Will Change Your Life

Trending in Money

1 How to Set Financial Goals and Actually Meet Them 2 25 Killer Sites For Free Online Education 3 10 Recession-Proof Debt Consolidation Tips 4 The Definitive Guide to Get out of Debt Fast (and Forever) 5 25 Easy Tips on How to Save Money Fast

Read Next

Advertising
Advertising
Advertising

Last Updated on September 2, 2020

How to Set Financial Goals and Actually Meet Them

How to Set Financial Goals and Actually Meet Them

Personal finances can push anyone to the point of extreme anxiety and worry. Easier said than done, planning finances is not an egg meant for everyone’s basket. That’s why most of us are often living pay check to pay check. But did anyone tell you that it is actually not a tough task to meet your financial goals?

In this article, we will explore ways to set financial goals and actually meet them with ease.

4 Steps to Setting Financial Goals

Though setting financial goals might seem to be a daunting task, if one has the will and clarity of thought, it is rather easy. Try using these steps to get you started.

1. Be Clear About the Objectives

Any goal without a clear objective is nothing more than a pipe dream, and this couldn’t be more true for financial matters.

It is often said that savings is nothing but deferred consumption. Therefore, if you are saving today, then you should be crystal clear about what it’s for. It could be anything, including your child’s education, retirement, marriage, that dream vacation, fancy car, etc.

Once the objective is clear, put a monetary value to that objective and the time frame. The important point at this step of goal setting is to list all the objectives that you foresee in the future and put a value to each.

2. Keep Goals Realistic

It’s good to be an optimistic person but being a Pollyanna is not desirable. Similarly, while it might be a good thing to keep your financial goals a bit aggressive, going beyond what you can realistically achieve will definitely hurt your chances of making meaningful progress.

It’s important that you keep your goals realistic, as it will help you stay the course and keep you motivated throughout the journey.

3. Account for Inflation

Ronald Reagan once said: “Inflation is as violent as a mugger, as frightening as an armed robber and as deadly as a hitman.” This quote sums up what inflation could do your financial goals.

Therefore, account for inflation[1] whenever you are putting a monetary value to a financial objective that is far into the future.

For example, if one of your financial goal is your son’s college education, which is 15 years from now, then inflation would increase the monetary burden by more than 50% if inflation is a mere 3%. Always account for this to avoid falling short of your goals.

Advertising

4. Short Term Vs Long Term

Just like every calorie is not the same, the approach to achieving every financial goal will not be the same. It’s important to bifurcate goals into short-term and long-term.

As a rule of thumb, any financial goal that is due in next 3 years should be termed as a short-term goal. Any longer duration goals are to be classified as long-term goals. This bifurcation of goals into short-term vs long-term will help in choosing the right investment instrument to achieve them.

By now, you should be ready with your list of financial goals. Now, it’s time to go all out and achieve them.

How to Achieve Your Financial Goals

Whenever we talk about chasing any financial goal, it is usually a two-step process:

  • Ensuring healthy savings
  • Making smart investments

You will need to save enough and invest those savings wisely so that they grow over a period of time to help you achieve goals.

Ensuring Healthy Savings

Self-realization is the best form of realization, and unless you decide what your current financial position is, you aren’t heading anywhere.

This is the focal point from where you start your journey of achieving financial goals.

1. Track Expenses

The first and the foremost thing to be done is to track your spending. Use any of the expense tracking mobile apps to record your expenses. Once you start doing it diligently, you will be surprised by how small expenses add up to a sizable amount.

Also categorize those expenses into different buckets so that you know which bucket is eating most of your pay check. This record keeping will pave the way for cutting down on un-wanted expenses and pumping up your savings rate.

If you’re not sure where to start when tracking expenses, this article may be able to help.

2. Pay Yourself First

Generally, savings come after all the expenses have been taken care of. This is a classic mistake when setting financial goals. We pay ourselves last!

Advertising

Ideally, this should be planned upside down. We should be paying ourselves first and then to the world, i.e. we should be taking out the planned saving amount first and manage all the expenses from the rest.

The best way to actually implement this is to put the savings on automatic mode, i.e. money flowing automatically into different financial instruments (mutual funds, retirement accounts, etc) every month.

Taking the automatic route will help release some control and compel us to manage what’s left, increasing the savings rate.

3. Make a Plan and Vow to Stick With It

Learning to create a budget is the best way to get around the uncertainty that financial plans always pose. Decide in advance how spending has to be organized

Nowadays, several money management apps can help you do this automatically.

At first, you may not be able to stick to your plans completely, but don’t let that become a reason why you stop budgeting entirely.

Make use of technology solutions you like. Explore options and alternatives that let you make use of the available wallet options, and choose the one that suits you the most. In time, you will get accustomed to making use of these solutions.

You will find that they make it simpler for you to follow your plan, which would have been difficult otherwise.

4. Make Savings a Habit and Not a Goal

In the book Nudge, authors Richard Thaler and Cass Sunstein advocate that, in order to achieve any goal, it should be broken down into habits since habits are more intuitive for people to adapt to.

Make savings a habit rather than a goal. While it might seem to be counterintuitive to many, there are some deft ways of doing it. For example:

  • Always eat out (if at all) during weekdays rather than weekends. Weekends are more expensive.
  • If you are a travel buff, try to travel during off-season. You’ll spend significantly less.
  • If you go shopping, always look out for coupons and see where can you get the best deal.

The key point is to imbibe the action that results in savings rather than on the savings itself, which is the outcome. Focusing on the outcome will bring out the feeling of sacrifice, which will be harder to sustain over a period of time.

Advertising

5. Talk About It

Sticking to the saving schedule (to achieve financial goals) is not an easy journey. There will be many distractions from those who are not aligned with your mission.

Therefore, in order to stay the course, surround yourself with people who are also on the same bandwagon. Daily discussions with them will keep you motivated to move forward.

6. Maintain a Journal

For some people, writing helps a great deal in making sure that they achieve what they plan.

If you are one of them, maintain a proper journal, where you write down your goals and also jot down the extent to which you managed to meet them. This will help you in reviewing how far you have come and which goals you have met.

When you have a written commitment on paper, you are going to feel more energized to follow the plan and stick to it. Moreover, it is going to be a lot easier for you to track your progress.

Making Smart Investments

Savings by themselves don’t take anyone too far. However, savings, when invested wisely, can do wonders.

1. Consult a Financial Advisor

Investment doesn’t come naturally to most of us, so it’s wise to consult a financial advisor.

Talk to him/her about your financial goals and savings, and then seek advice for the best investment instruments to achieve your goals.

2. Choose Your Investment Instrument Wisely

Though your financial advisor will suggest the best investment instruments, it doesn’t hurt to know a bit about the common ones, like a savings account, Roth IRA, and others.

Just like “no one is born a criminal,” no investment instrument is bad or good. It is the application of that instrument that makes all the difference[2].

As a general rule, for all your short-term financial goals, choose an investment instrument that has debt nature, for example fixed deposits, debt mutual funds, etc. The reason for going for debt instruments is that chances of capital loss is less compared to equity instruments.

Advertising

3. Compounding Is the Eighth Wonder

Einstein once remarked about compounding:

“Compound interest is the eighth wonder of the world. He who understands it, earns it… He who doesn’t… Pays it.”

Use compound interest when setting financial goals

    Make friends with this wonder kid. The sooner you become friends with it, the quicker you will reach closer to your financial goals.

    Start saving early so that time is on your side to help you bear the fruits of compounding.

    4. Measure, Measure, Measure

    All of us do good when it comes to earning more per month but fail miserably when it comes to measuring the investments and taking stock of how our investments are doing.

    If we don’t measure progress at the right times, we are shooting in the dark. We won’t know if our saving rate is appropriate or not, whether the financial advisor is doing a decent job, or whether we are moving closer to our target.

    Measure everything. If you can’t measure it all yourself, ask your financial advisor to do it for you. But do it!

    The Bottom Line

    Managing your extra money to achieve your short and long-term financial goals

    and live a debt-free life is doable for anyone who is willing to put in the time and effort. Use the tips above to get you started on your path to setting financial goals.

    More Tips on Financial Goals

    Featured photo credit: Micheile Henderson via unsplash.com

    Reference

    Read Next