Wealth has often been used synonymously with being rich. However, the two are not the same. Being rich is only a small element of your overall wealth. When we talk of wealth in this context, we are speaking about the passions, freedoms, experiences, relationships, desires and actions that money can’t buy.
There are so many people in our society today who die in the pursuit of riches, never realizing that they were some of the wealthiest men on the planet. It is obvious that money should be saved, invested and not wasted. However, there is also a certain degree of self-awareness that must be reached to attain wealth.Below are seven mistakes many individuals make in their pursuit of wealth.
1. They spend time on things that don’t align with their true wealth.
According to author Bronnie Ware, one of the top five regrets of the dying is, “I wish I’d had the courage to live a life true to myself, not the life others expected of me.” It’s easy to get caught up in what society defines as wealth: successful businesses, money, power, prestige etc.
In reality, wealth is whatever you value most. That could be family, travel, solitude, adventure etc. However, you have to be self-aware enough to understand what your true wealth is and prioritize that over the labels and definitions of popular culture. No two people will have exactly the same wealth, because not everyone wants the same things out of life. The wealthy will not spend so much time, money and resources on something that is not an absolute passion.
To redirect your life and focus, take a few minutes to actually write down your wealth like you would a budget. Make sure you are writing down thing you love to do (ACTIONS) and not material things like boats, planes, fancy cars etc. that most people put on their vision boards.
2. They have too many goals.
One major money mistake people make on the road to wealth is having too many goals. In other words, having too many things you want to accomplish is actually a distraction. Mike flint, is a pilot who has flown four United States presidents. He was also the personal pilot of Warren Buffet for ten years.
He asked Buffet for tips on prioritizing his career and building wealth. Buffet told Flint to write down his top 25 goals and then circle his top 5. As flint confirmed that he would start working on his top-five list right away, Buffet inquired about the second list. “It’s not as urgent, so I ll get to it later” He said. To which Buffet replied, “No Mike, you have got it all wrong. Everything you didn’t circle just became your avoid it at all cost list.”
Take a few more minutes and clean up the distractions that you have created for yourself by setting to many goals. Write down your top 25 life goals and circle your top 5. The remaining twenty just became your distraction list. They should be set aside without attention until your top 5 have been accomplished. If not, your lack of focus will cost you in the long term.
3. They don’t know how to live “Sophrosyne”
To live Sophrosyne is to have a healthy state of mind, characterized by self-control, moderation, knowledge and balance with a deep awareness of one’s true self, resulting in true happiness. Sophrosyne is simply living simply, knowing the difference between wants and need. It can also be reflected in the two most famous saying by the philosopher Plato; “Know thy self” and “Nothing in excess.”
Spending too much on wants is a money mistake seen in the poor and middle class. Most people chase wealth as an excuse to live in excess. They display their insecurities in lavish homes and cars. These things aren’t wrong, but they shouldn’t be the driving force. Sophrosyne should not be confused with self-denial. Make a goal to set aside some money for a splurge in moderation.
4. They don’t pay themselves first
When trying to create monetary wealth, the obvious first step is to create a budget. However, most people don’t truly understand how to write and follow a budget that will create wealth. Most people create a budget either by calculating how much they need to pay for all their needs, wants and bills and still make it to next month, or, they figure out how much money they have to spend that month and budget to spend it all on their bills, needs and wants.
This budget ensures survival, not wealth. To really get ahead you have to create a budget that pays you before it even considers paying a bill or buying a want. You must then pretend that money doesn’t exist. It’s not vacation money or new car money. This is your nest egg and you are going to have to sit on it awhile and watch it grow before it is ready to hatch.
5. They don’t take risks
So, you have saved a hefty sum and your nest egg is ready to hatch. This is where you are going to have to be very strategic in trying to turn your rainy day savings into a stockpile you could retire on. While saving and not overspending are good habits to have, they can become money mistakes if you don’t eventually put your money to work for you.
Any great capitalist will tell you that the key to creating great wealth is being willing to take a risk. Men like Vanderbilt, Rockefeller and Carnegie are perfect examples of risk-takers. They saw the possibility of a need and even though they knew it came with great risk, they had the vision to know that the reward was greater. These men were driven by a resolution greater than money. For them, creating wealth meant creating a legacy. Money was only a consequence of the actions they took in the pursuit of purpose and passion.
Any investment you make is going to be a risk. However, you can offset some of that risk by learning and gaining knowledge.
“Risk comes from not knowing what you are doing” – Warren Buffett.
6. They don’t understand the value of a reputation.
The dynamics of commerce in our culture today is quickly changing and the wealthy are quickly beginning to realize that your reputation and integrity is legal tender. Gone are the days of stomping on the little guy or back stabbing people on your way to the top. This old way of thinking is a big money mistake.
In today’s online world, individuals and Businesses rely on reviews and rating when choosing a product or service. When people want to know about the services you provide, they automatically take to the internet to find out what people say about you. In this sense, your reputation is legal tender. One bad review could mean ten lost customers. Two bad reviews could mean twenty lost customers, etc. This means you have to consciously work to develop and sustain good relationships if you want your business or brand to succeed. While you must focus on your daily task to deliver quality products, do not forget that people will go where they feel the most valued. Take some time to build great reviews for your brand or business. Also take the time to work on mending broken relationships.
7. They don’t know how to delegate.
Many people open businesses to make money and be rich. However they never learn how to delegate work. This mistake can tend to be very costly. The wealth that is the freedom of owning your own business is replaced with the stress of thinking that the business cannot run well or smoothly without you.
This way of thinking will ensure that you burn out from stress. Do not confuse delegating work with micromanaging your employees. You must be able to trust their abilities to lead. Find out what the passions of your team are and see if there are any problems within the business that they are inspired to take action and lead change. This system helps you delegate work without ever having to delegate it. You will begin to see more work being done and accomplished around you.
If not addressed, the sum of these mistakes will begin to add up in cost. Take this moment to reflect on your perceptions .Are you on a path to wealth, or have you just trying to be rich.
“The joy and fulfillment found in the process of achieving your dreams and living with passion is often confused with the result of being rich. Do not measure your life’s journey to success with the fickle accompaniment of monetary and riches. Your journey should be measured by the memories gathered, not the receipts; the moments spent in passion, not cash; and happiness shared, not bought.”
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