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10 Ways in Which Wealthy People Think Differently About Money

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10 Ways in Which Wealthy People Think Differently About Money

Do you want to become rich? The first step is to know how the wealthy think about money differently than you do and to start thinking like that. The next step is to take action, and to let the action become natural by thinking the way wealthy people think.

1. The wealthy are okay with risk

“Millionaires are willing to take risks and have the emotional strength to handle failure if a business or idea fails.” – Millionaire Entrepreneur, Robert Smith

Everything you do won’t be successful. The wealthy know that and refuse to let the inevitable possibility of failure stop them from being successful. They go ahead and fail, get back up and keep going. Don’t let fear of failing stop you from taking action.

2. The wealthy think investing is fun

“If you don’t already have an investment account, open one. It’s one of the most luxurious things you can do for yourself.” – Self-Made Entrepreneur, Elle Kaplan

The wealthy enjoy the process of making money. They’re excited to invest money into something that will bring  them more money. In fact, that gets them more excited than a vacation, a new car or a diamond-studded cat food bowl. They still enjoy those things, but they do so after they have invested a set amount of their earnings. Pick a percentage of your earnings to invest and do it as faithfully and with as much excitement as you buy your double caramel macchiato.

3. The wealthy live below their means

The wealthy enjoy luxury and impulse purchases, but never at the expense of the larger financial picture. They live below their means. They know that living beyond their means puts a strain on their finances and moves them away from their financial goals. If you want more stuff, don’t go into debt or spent savings, think like the wealthy think about money so you can make more money and raise your means, so that living within it is more fun.

4. The wealthy pay attention

The wealthy pay attention to where their money is going, where it’s coming from and if it’s getting bigger or smaller. They watch it like you watch a toddler at the mall. They know what’s going on with it and if they veer off course, they make changes. Keep your eye on your money. Look at account balances, income and expenses regularly and become more aware of your daily habits.

5. The wealthy know that money grows on trees

Well, not literally, but the wealthy know they can always make more money. There is always more to be had and it is in infinite supply. Money is just a representation of value. When value is created, money moves around – more money, more value. Add value to people’s lives and you will get money. It’s that simple.

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6. The wealthy don’t chase money

The wealthy don’t do what they do for the money. They know that money is a great tool to help people, change the world, make more money and have a lot of fun in your limited time on earth. But they don’t see it as a goal in itself. They strive to achieve something bigger than money. Don’t make money your goal. Make your goal something more important and use money as a vehicle to get there and a reward for achieving it. 

7. The wealthy know money is not evil

Average people say they want more money, but deep down they believe it is an evil force that will make them do bad things. The wealthy know that money is just a tool that will amplify whatever you already are – good or evil. Think of money as a simple tool like a hammer. With a hammer, you can build someone a house or seriously injure them. The hammer isn’t good nor bad, it’s what you do with it. Quit believing the lie that money is the root of all evil.

8. The wealthy do what they are passionate about

“I had no idea that being my authentic self could make me as rich as I’ve become. If I had, I’d have done it a lot earlier.” – Oprah Winfrey

The wealthy know that the best way to make money is to follow your passions and pursue what genuinely interests you. Do what you care about. Getting rich is a lot of work and you better enjoy what you do to get there – in fact, you must enjoy it.

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9. The wealthy think long-term

“When you make your first million, be proud. Then put it away in sound investments so it can multiply and act like you don’t have it.” – Millionaire model and entrepreneur, Stephanie Adams

The wealthy know that they must plan for tomorrow. They know that the decisions they make today determines their financial future. They delay gratification and live below their means (remember number 3) in order to be even wealthier tomorrow. Every time you make a financial decision, consider how it will affect your wealth in the future.

10. The wealthy think big

The most important way in which the wealthy think about money differently is that they think big.

“If you’re going to be thinking anything, you might as well think big.” – Donald Trump

When you focus on just surviving through retirement or paying the mortgage, you will just survive through retirement or pay the mortgage. Your brain needs something big to dream about. You must aspire to be something huge. Stop dreaming of only a million bucks. Write down the biggest dream you can think of and multiply it by 10. That’s thinking big.

If you have read this far, you probably want to be wealthy. Every wealthy person was in the exact position you are in right now. First you have to believe it is possible. Then learn and deeply internalize these 10 ways the wealthy think differently and you’ll be on your way.

Featured photo credit: photo credit: Rodrigo Soldon via photopin via creativecommons.org

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Last Updated on July 20, 2021

Financial Freedom is Not a Fantasy: 9 Secrets to Get You There

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Financial Freedom is Not a Fantasy: 9 Secrets to Get You There

Have you ever considered your life now, and how it would be if you had more time to spend with your family and less worries about money?

Nowadays, financial stress is one of the most troublesome weights in life. If you’ve ever encountered financial stress, you know the difficulty of not having enough income to pay your obligations or bills.

Many people say that money is not the ultimate goal of life. While that’s true, money certainly plays a very significant role. The meaning of financial freedom changes with the different phases of our life, but ultimately, it is something that many people strive for.

In this article, we’ll explain how to capture that financial freedom you’ve been looking for. Read on to learn the secrets to financial freedom.

Break Free of Your Finances

Financial freedom is about having a constant flow of cash from your assets to cover all your regular needs.

When you are not worried about your income, or living paycheck to paycheck, you gain a great sense of freedom. It’s the freedom to be obtain and do what you truly need to make your way through everyday life.

Gaining financial freedom, though, is a process of growth, making small improvements and gaining emotional strength.

Though it seems hard to believe, it is really very simple to get financial freedom.

To do so, you simply need to make sure that your assets exceed your liabilities. In other words, you’ll need to find the sweet-spot where your residuals meet or surpass your expenses. This is something that you can achieve with the proper plan.

While not every person will accomplish financial freedom, the potential for anyone to do so is certainly there. Anyone can achieve this success, regardless of their income level.

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Outlined below are 9 secrets that will help you in your goals of achieving financial freedom.

1. Stop Unnecessary Spending

We often spend money inwardly, instead of objectively.

For example, you may spend when you’re anxious, depressed, restless, exhausted, from fear of missing out, or to please others. This is a very unhealthy way to handle your finances.

To stop this habitual spending, log down all your spending over the course of a month.

Just as some people keep a food diary, keep an expense diary. Remember not to just write down how much and what you spent the money on, also include the circumstances of why you spent the money. Was it an impulse buy at the checkout line or was it something you planned to purchase?

This increased self-awareness could enable you to avoid triggering situations in the future when you are considering an impulse buy.

2. Plan a Monthly Budget

This is a great opportunity to get serious.

Take a seat with your spouse or partner and make a monthly budget based on your income, not your expenses. You are never again going to spend more cash then you have on hand.

Overspending is the thing that led you to more financial obligations. Make sure you decide every month what is coming in and what will be going out and stick to that budget… no matter what.

3. Cut-up Credit Cards

Perhaps you are the type of person who always pays your credit card balance in full before the end of your billing cycle, and enjoys the reward points you gain. If this is the case, then you’re already way ahead of the game.

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If not, you may want to consider ridding your life of the burden that credit cards bring.

Many cards have strategies set up so that if you make a certain number of late payments, they will raise your interest rate much higher. This can really add up in the long run and you won’t be doing your financial situation any favors. If you’re prone to late payments or have a large balance due on your cards, cut them up!

Without proper self control on credit card spending and payments, you are basically throwing your money away. To ensure that you have better control over your spending, use only cash or debit for all future purchases (and don’t forget to pay at least your minimum payment on your cut-up cards each month!).

4. Increase Savings

There is no doubt that for a comfortable retirement you must accumulate satisfactory savings throughout your working life.

It’s good practice to save up to 15% of your income.

Start with your workplace 401(k), if you have one. If not, a Roth IRA (if you are eligible) or a traditional IRA (if you are not eligible for the Roth) are the next logical steps.

Increase in longevity means you might be able to look forward to 25 to 30 years in retirement, or possibly even significantly more. Investing now in good retirement plans will ensure that you have a guaranteed a stable monthly income when the time comes to stop working. [1]

5. Invest Wisely

Consider investing in funds.

Specifically, you will gain higher returns if you invest in different types of mutual funds such as Debt funds, Equity funds and Hybrid funds with a proper balance, although it absolutely relies on your personal preferences and sense of risk taking.

To get the most of these benefits, make sure you are investing in a variety of assets. Another resource of investing in mutual funds is SIP (Systematic Investment Plan) where you invest some money every month in funds. SIP works by averaging the per unit price of the stock.

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Mutual fund investors are aware of the benefits of an SIP (Systematic Investment Plan). For one, it is the most secure way to invest in equity mutual plans so that wealth is created over a long period of time. This plan also helps you to gain a better sense of financial discipline, which will come in handy in all your financial endeavors.

6. Invest in Gold

There isn’t really a better way to invest in gold than to have the physical gold itself in your possession.

You can purchase gold coins and bars from mints as well as from coin dealers and other private sellers.

Another way to invest in gold is through ETFs (Exchange Traded Funds).

These are is similar to mutual funds but they are exclusively investments of gold. ETFs are great because they offer more liquidity; the ETF owns the actual physical gold, stores it, and retains the value of the shares. These shares can then be bought and sold in the stock market, and one big benefit is that the transaction costs of gold ETFs are much lower than the that of physical gold.

With its consistently-increasing demand, investment in gold can be very wise long-term investment to make.

7. Stash Emergency Funds

Whether it’s a cash gift or a work bonus, always try to save any extra money that comes your way rather than making unneeded purchases.

If you get paid every other week, you’ll get an “extra” paycheck (three rather than the usual two) twice a year. Either save those paychecks towards your emergency funds or utilize the money to pay down other obligations, such as loans, credit cards or other debts.

Make it hard to get your cash.

Put your savings in an alternate bank, maybe an online bank that forces you to delay for several business days before transferred money hits your regular bank account.

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8. Find Fabulous Mentors

Find a mentor, such as a friend or family member, who has exceptional control over their finances and pay attention to everything they do.

If you do not have any friends or family that are enjoying financial freedom, then find a mentor online! There are numerous blogs and guru websites featuring the advice of many people who have reached financial freedom, and they exist primarily to let you in on how to achieve it for yourself.

There are also plentiful forums available that share tips and tricks on how to best achieve financial freedom. Read as much as you can and start changing your habits for the better.

9. Be Extra Patient

Patience is the key of financial success.

Being patient can be quite tough, especially when you’re struggling with your finances, but having faith is worth it. You’ll continuously be on the right track if you are taking the proper steps above.

So don’t be discouraged, even if you are only saving a few dollars a month; it all adds up. Within just a few years you’ll look back proudly at your accomplishments and be glad that you had the patience to get there.

Financial Freedom for All

Anyone can achieve financial freedom, regardless of their financial circumstance.

Use the tips provided above to get yourself on the track to financial freedom and toss your monetary concerns out the window. If you wish to achieve a life with financial freedom for yourself and your family then you must adopt a disciplined approach towards your finances.

Following the simple secrets above is a great start to making your money work for you, so you can work less and live more!

Featured photo credit: rawpixel via unsplash.com

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Reference

[1] Hartford Gold Group: IRA Retirement Accounts

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