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3 Practical Tips for Changing the Way You Think About Money

3 Practical Tips for Changing the Way You Think About Money

It’s no secret that the super-wealthy think about money in a much different way than the rest of us.

Money is something they have plenty of, have seemingly little problems acquiring, and aren’t afraid to spend.

From the outside looking in, it’s real easy for us to say that their mindset of wealth is a by-product of the amount of money they have. But, what about before they became filthy rich?

While some of the super-rich were born into fortunes, many had to acquire their wealth on their own and battled countless setbacks. There’s a countless number of self-made millionaires in the world today. Many of whom started their stories in households whose average income was at, or below, the poverty level. One such person that immediately springs to my mind is Robert Herjavec.

Robert Herjavec immigrated from Yugoslavia with his family at the age of 8. Arriving in Halifax, Canada, it’s said that they arrived with $20, a suitcase, and no understanding of the English language. Robert’s ambition and determination lead him to becoming an extremely wealthy businessman who’s boasted business sales that reach as high as 9 figures. This determination and business savvy has allowed him to acquire a massive, personal fortune.

I’ve always had a keen interest in studying the mindset of the wealthy and, in this post, I’d like to share with you 3 tips that I’ve learned that will help you change the way you think about money, so you can get more of it.

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1. Think of Money as a Tool, Not a Result

    For many of us, money is viewed as a result. Something we gain for going to work. Something we lose when it’s spent.

    We use it to pay our bills and maintain our lifestyles, but rarely do we actually think of money as a tool. It’s simply something we have to acquire in exchange for our time and energy. To the average person, the acquisition of money is a zero-sum game.

    One of the most prominent differences between the mindset of the wealthy and the rest of us, is that they simply do not view money in this way.

    Pretty much every successful person that I’ve ever studied has had a mindset that views money as nothing more than a tool. A tool to be used to acquire and do more of what they really want. The best venture capitalists in the world understand this concept better than most. Their success is dependent on their ability to view and use money as a tool for investments.

    Here’s a quick example to better illustrate this idea:

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    Let’s say you have an extra million dollars lying around and you decide you want to finance a new car. The car payments average out to be about $800 per month.

    Most people would simply buy the car outright or just start making the payments out of the extra million they have lying around.

    But, those with a mindset for wealth, who view money as a tool, might do something as simple as this: Place the million dollars in a savings account that yields a 1% return and then use the $833 per month accumulated interest to pay for the car.

    Instead of spending money on the car and taking away from that extra million, the wealthy get to keep their million dollars and get the car too.

    While a very crude example, it effectively illustrates the difference in how money is viewed and used by those with a focus on wealth. When we start to view money as a tool, that allows us to grow our wealth and do more of what we want in life, we’ve come one step closer to having a mindset of prosperity.

    2. Focus on Prosperity – Not Debt

    This goes back to a basic principle of personal development. Focus on the solution, not the problem.

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    Many people get stuck focusing on paying off their bills and debt. It’s such a powerful theme in their lives that all their attention, in regards to money accumulation, is centered around paying bills and reducing their debt.

    While it’s great to pay your bills on time and reduce your debt, you can’t let it distract you from creating wealth. This is why you hear so many financial advisers tell people to set up an automatic debt payment plan and to just start focusing on savings, prosperity and growth.

    I think Bob Proctor, from The Secret, said it best:

    “Most people have a goal of getting out of debt. That will keep you in debt forever. Whatever you’re thinking about, you will attract. You say, “But it’s get out of debt.” I don’t care if it’s get out or get in, if you’re thinking debt, you’re attracting debt. Set up an automatic debt repayment program and then start to focus on prosperity.”

    Law of Attraction aside, that is great advice. Simply for the fact that it emphasizes taking your focus away from the problem and on to the solution. Your bills still get paid, but your mind is now free to focus on prosperity and growth.

    3. Don’t Put Money on an Emotional Pedestal

    If any of you are like me, and have grown up without a lot of money, you may have developed some pretty strong negative emotional stances concerning money.

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    Money was always viewed as a source of stress. Something that directly dictated whether or not I was going to have a good day. I used to feel strongly (and still do, at times – it’s a work in progress) that my personal self-worth was directly related to what kind of clothes I was wearing, what kind of car I was driving, and how nice my apartment was. All of this pointed right back to how much money I had in my bank account.

    Money should not be such a major thing in our life that it is able to dictate our emotional state or determine our own self-worth.

    This closely relates to the first tip that I listed. If we’re able to view money as nothing more than a tool for us to wield, we become the ones in charge of our lives – not the money.

    If we’re emotional about money and allow it to dictate our mood, how can we ever begin to use it effectively as a tool? I mean, you don’t get emotional over a vacuum cleaner, do you? Emotions will cloud our judgement and cause us to make poor choices with our money.

    The wealthiest people in the world will tell you, “Don’t get emotional about money.” While this is sometimes easier said than done, it’s very solid advice. Learning to take money down from that emotional pedestal and put it in our hands, where a good tool should be, is a key step for moving our mindset towards that of wealth creation. And that puts us in the driver’s seat.

    Featured photo credit: Growth of Money on Napkin via Shutterstock and inline photo by Philip Taylor PT via Flickr (CC BY 2.0)

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    Published on November 20, 2018

    The Best Ways to Save Money Even Impulsive Spenders Can Get Behind

    The Best Ways to Save Money Even Impulsive Spenders Can Get Behind

    The truth is, there are many “money saving guides” online, but most don’t cover the root issue for not saving.

    Once I’d discovered a few key factors that allowed me to save 10k in one year, I realized why most articles couldn’t help me. The problem is that even with the right strategies you can still fail to save money. You need to have the right systems in place and the right mindset.

    In this guide, I’ll cover the best ways to save money — practical yet powerful steps you can take to start saving more. It won’t be easy but with hard work, I’m confident you’ll be able to save more money–even if you’re an impulsive spender.

    Why Your Past Prevents You from Saving Money

    Are you constantly thinking about your financial mistakes?

    If so, these thoughts are holding you back from saving.

    I get it, you wish you could go back in time to avoid your financial downfalls. But dwelling over your past will only rob you from your future. Instead, reflect on your mistakes and ask yourself what lessons you can learn from them.

    It wasn’t easy for me to accept that I had accumulated thousands of dollars in credit card debt. Once I did, I started heading in the right direction. Embrace your past failures and use them as an opportunity to set new financial goals.

    For example, after accepting that you’re thousands of dollars in debt create a plan to be debt free in a year or two. This way when you’ll be at peace even when you get negative thoughts about your finances. Now you can focus more time on saving and less on your past financial mistakes.

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    How to Effortlessly Track Your Spending

    Stop manually tracking your spending.

    Leverage powerful analytic tools such as Personal Capital and these money management apps to do the work for you. This tool has worked for me and has kept me motivated to why I’m saving in the first place. Once you login to your Personal Capital dashboard, you’re able to view your net worth.

    When I’d first signed up with Personal Capital, I had a negative net worth, but this motivated me to save more. With this tool, you can also view your spending patterns, expenses, and how much money you’re saving.

    Use your net worth as your north star to saving more. Whenever you experience financial setbacks, view how far you’ve come along. Saving money is only half the battle, being consistent is the other half.

    The Truth on Why You Keep Failing

    Saving money isn’t sexy. If it was, wouldn’t everyone be doing it?

    Some people are natural savers, but most are impulsive spenders. Instead of denying that you’re an impulsive spender, embrace it.

    Don’t try to save 60 to 70% of your income if this means you’ll live a miserable life. Saving money isn’t a race but a marathon. You’re saving for retirement and for large purchases.

    If you’re currently having a hard time saving, start spending more money on nice things. This may sound counterintuitive but hear me out. Wouldn’t it be better to save $200 each month for 12 months instead of $500 for 3 months?

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    Most people run into trouble because they create budgets that set them up for failure. This system won’t work for those who are frugal, but chances are they don’t need help saving. This system is for those who can’t save money and need to be rewarded for their hard work.

    Only because you’re buying nice things doesn’t mean that you’ll save less. Here are some rules you should have in place:

    1. Save more than 50% of your available money (after expenses)
    2. Only buy nice things after saving
    3. Automate your savings with automatic bank transfers

    These are the same rules that helped me save thousands each year while buying the latest iPhone. Focus only on items that are important to you. Remember, you can afford anything but not everything.

    How to Foolproof Yourself out of Debt

    Personal finance is a game. On one end, you’re earning money; and on the to other, you’re saving. But what ends up counting in the end isn’t how much you earn but how much you save. Research shows that about 60% of Americans spend more than they save.[1]

    So how can you separate yourself from the 60%?

    By not accumulating more debt. This way you’ll have more money to save and avoid having more financial obligations. A great way to stop accumulating debt is using cash to pay for all your transactions.

    This will be challenging, depending on how reliant you are with your credit card, but it’s worth the effort. Not only will you stop accruing debt, but you’ll also be more conscious with what you buy.

    For example, you’ll think twice about purchasing a new $200 headphone despite having the cash to buy them. According to a poll conducted by The CreditCards.com, 5 out of 6 Americans are impulsive spenders.[2]

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    Telling yourself that you’ll have the discipline to not buy things won’t cut it. This is equal to having junk food in your fridge while trying to eat healthy–it’s only a matter of time before you slip. By using cash to make your purchases, you’ll spend less and save more.

    A Proven Formula to Skyrocket Your Savings

    Having proven systems in place to help you save more is important, but they’re not the best way to save money.

    You can search for dozens of ways to save money, but there’ll always be a limit. Instead of spending the majority of your effort saving, look for ways to increase your income. The truth is that once you have the right systems in place, saving is easy.

    What’s challenging is earning more money. There are many routes you can take to achieve this. For example, you can work long and hard at your current job to earn a raise. But there’s one problem–you’re depending on someone else to give you a raise.

    Your company will have to have the budget, and you’ll have to know how to toot your own horn to get this raise. This isn’t to say that earning a raise is impossible, but things are better when you’re in control right? That’s why building a side-hustle is the best way to increase your income.

    Think of your side-hustle as a part-time job doing something you enjoy. You can sell items on eBay for a profit, or design websites for small businesses. Building a side-hustle will be on the hardest things you’ll do, be too stubborn to quit.

    During the early stages, you won’t be making money and that’s okay. Since you already have a source of income, you won’t be dependent on your side-hustle to pay for your expenses. Depending on how much time you invest in your side-hustle, it can one day replace your current income.

    Whatever route you take, focus more on earning and save as much as possible. You have more control than you give yourself credit for.

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    Transform Yourself into a Saving Money Machine

    Saving money isn’t complicated but it’s one of the hardest things you’ll do.

    By learning from your mistakes and rewarding yourself after saving you’ll save more. What would you do with an extra $200 or $500 each month? To some, this is life-changing money that can improve the quality of their lives.

    The truth is saving money is an art. Save too much and you’ll quit, but save too little and you’ll pay for the consequences in the future. Saving money takes effort and having the right systems in place.

    Imagine if you’d started saving an extra $100 this next month? Or, saved $20K in one year? Although it’s hard to imagine, this can be your reality if you follow the principles covered in this guide.

    Take a moment to brainstorm which goals you’d be able to reach if you had extra money each month. Use these goals as motivation to help you stay on track on your journey to saving more. If I was able to save thousands of dollars with little guidance, imagine what you’ll be able to do.

    What are you waiting for? Go and start saving money, the sky is your limit.

    Featured photo credit: rawpixel via unsplash.com

    Reference

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