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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.

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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.

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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.

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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.

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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

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Published on May 7, 2019

How to Invest for Retirement (The Smart and Stress-Free Way)

How to Invest for Retirement (The Smart and Stress-Free Way)

When it comes to stocks, I bet you feel like you have no idea what you’re doing.

Everyone who’s not a financial expert has been there. I’ve been there. But, time is passing and you need to be crystal clear with how you’re investing for your retirement.

Otherwise, it’s back to work until you can afford not to. So, how can you invest for retirement when you’re not a financial expert?

You take the time to learn the fundamentals well. If you do, you can grow your wealth and retire happy. The best part is that you don’t need to be a financial expert to make smart investment decisions.

Here’s how to invest for retirement the smart and stress-free way:

1. Know Clearly Why You Invest

Odds are you already know why should invest for retirement.

But, maybe you know the wrong reasons. It’s time you get clear on why you’d like to retire. Here are some questions to help you get started:

  • Will you spend more time with your family?
  • What does retirement mean to you?
  • Are you looking to launch that business you’ve been holding off for years?

Everyone wants to retire but not for the same reasons. Once you’re clear for why retirement is important for you, you’ll focus on making it happen.

Investing in the stock market allows you to take advantage of compound interest.[1] All this means is that your money earns money on top of its interest. A reason why investment in the stock market is one of the best ways to plan for retirement.

2. Figure out When to Invest

“The best time to plant a tree was 20 years ago. The second best time is now.”– Chinese Proverb

It’s true if you’d had started investing when you were 10 years old, you’d have a lot more money than you do today.

The reality is that most people don’t start investing until it’s too late. So, if you’re currently waiting for the perfect time to start an investment, it would be today. Open your calendar and block out 2 to 3 hours to choose how you’ll invest for retirement.

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A quick way to get a snapshot of where you stand is to use Personal Capital. Input all your personal information and spend some time setting your retirement goals. Once completed, you’ll know where you stand with your retirement.

Having a savings account for retirement isn’t planning for retirement. Why? Your money loses value when you factor in US inflation.[2]

3. Evaluate Your Risk Tolerance to Create the Perfect Portfolio

Investing your money well depends on your emotions.

Why?

Because when the market drops most people panic and withdraw their money. On average, the US stock market yields an annual 6% to 7% ROI (return on your investment.) But, this won’t happen if you’re worried about short-term loses.

Before you invest your next dollar, know your risk tolerance.[3] Your risk tolerance determines the number of risky and safe investments you’d have.

Regardless of your investing style, you need to view investing for retirement as a long term game. Know that some years you’ll lose money but recoup this in the long-term.

Avoid watching market-related new. Also, create a double authentication to log in your investment account. This way you’re less likely to withdraw your money.

4. Open a Reliable Retirement Account

Depending on your circumstance, you may need to open a new brokerage account. This is the account is where you’ll invest your money.

If you’re currently working for a company, odds are that they offer a 410K investing account. If so, here’s where you’ll invest most of your money. The only problem with this is that you’re limited to the stock options that are available.

You do have the option to open a separate IRA (individual retirement account.) Here are some of the best brokers:

  1. Vanguard
  2. TD Ameritrade
  3. Charles Schwab

5. Challenge Yourself to Invest Consistently

Committing to invest for retirement is hard, but continuing to do so is harder.

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Once you’ve started investment for your retirement, you run at risk from stopping. Often you’ll want to contribute less, so you’d have more money in your pocket.

That’s why it’s important that you create a budget that allows you to invest each month. If you’re working for a company, you can set a percentage for the amount you’d like to contribute each month. Most people by default contribute 1% but aim to contribute 10% to 15%.

Be the judge for how much you can afford to contribute after covering important expenses. To stay motivated, use Personal Capital to view your net worth.

A benefit to contributing money to your retirement account is not taxed. For example, if you earn $100 and invest 10%, you’d contribute $10, then get taxed on the remaining $90. As of 2019, the most you’re able to contribute towards your 401K is 19K but this can change.

6. Consider Where to Invest Your Money

The most common way to invest your money is in stocks, but it’s not the only way. Here are other ways to invest:

Robo Advisors

Robo-advisors[4] are fancy algorithms that’ll choose the best investments for you. Sites like Wealthfront make it easy for first-time investors to invest their money. You’d input information about yourself and set your risk tolerance.

Then, set your monthly contribution amount and your robo-advisor would do the rest. Robo-advisors charge a fee to manage your money, but less than regular advisors.

Bonds

Think of bonds as “IOUs” to whomever you buy them from.

Essentially, you’re lending money and charging interest. Like stocks, not all bonds are equal. Some will be riskier than others depending on their rating.

Here are the different types of bond categories:[5]

  1. Treasury bonds
  2. Government bonds
  3. Corporate bonds
  4. Foreign bonds
  5. Mortgage-backed bonds
  6. Municipal bonds

Mutual Funds

Picture a group of people dumping all their money in a jar that’s managed by a professional. This is how mutual funds work. The fund manager manages the money looking to earn capital gains (interest.)

One of the best types of mutual funds is index funds. Since these funds don’t try to beat the market and instead follow it, they need less research. Because of this they often charge the lowest fees and yield the best long-term results.

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Real Estate

Yes, buying a home is an investment when done correctly.

Imagine buying a home and using it as a rental property. After repairing it, you receive a monthly surplus check of $100 to $200.

This may not sound like a lot, but repeat this process enough times and you’d earn a large amount of passive income. That’s why real estate is one of the best investments to not only retire but become wealthy.

But, it requires a lot of money to start and you should expect losing money along the way as you learn the process.

Savings Accounts

Your money can still grow in a savings account. Nowadays most online banks offer a 2% annual return. Although the average inflation is higher your money will be available when you need it.

7. Master Disincline to Dodge Short Success

Investing for retirement is a long-term strategy. That’s why you need to master delayed gratification. All this means is delaying short-term pleasure for something bigger in the future. Research shows that those who have delayed gratification are more successful.[6]

So how can you master delayed gratification?

By building your discipline.

Think back to what retirement means to you. A clear purpose will help you avoid withdrawing your money during a market downturn. It’ll help you contribute more towards retirement when you’d want to waste it instead.

Your journey towards retirement will be long, so reward yourself along the way. Choose a reward that’s relevant and meaningful, so that you reinforce positive behavior. For example, after contributing more towards retirement, treat yourself to dinner.

8. Aggressively Invest on This One Investment

I’ve mentioned several types of investments but haven’t covered the most important one.

It sounds cliche but here’s why you’re your best investment towards retirement. The more you know, the more money you’ll be able to make. The more good habits you adopt, the more secure your retirement will be.

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More importantly, investing in yourself is an investment that no one can take away. There’s no market downturn nor tragic circumstance that’ll wipe your knowledge and experience.

But, how can you invest yourself?

Reading books, blogs, and anything that’ll help you learn new topics daily. Listen to podcasts and audiobooks on your commute to/from work.

Save money to buy courses and hire coaches. I used to believe hiring coaches was a waste of money when I could learn the subject alone.

But, coaches see your blind spots and hold you accountable. Hiring the right coach will help you achieve your goals faster than you would’ve alone.

Retire Happy with Excess Money

The key to a secure financial future doesn’t only belong to financial experts.

It’s possible for you and I. What if you were able to retire earlier than most people and weren’t a financial planner? What if you were able to focus on what you enjoy doing the most while your money was working hard for you?

I know this sounds impossible now, but the truth is you’re capable of taking charge of your retirement. I’m not a financial expert but I’ve learned how to invest my money by reading books and learning from others.

Investing your money is scary. So start small and invest a small amount of your money with a robo-advisor. Feel your money drop and rise for a month or two. Then, invest more and keep this up until you’re aggressively saving for retirement.

One day, you’ll wake up with a net worth you’re proud of – confident about your retirement. You now know a few strategies you can use to invest in your retirement. Will you take action to retire happy?

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Featured photo credit: Matthew Bennett via unsplash.com

Reference

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