You Can Also Earn Money

If you want to be rich, you should hang around rich people. The advice sounds reasonable. After all, birds of a feather do flock together. However, this is only half the story. If you really want to be rich, you have to think like the rich.

Steve Siebold spent nearly three decades interviewing rich people around the world to find out what separates them from the 99%. His finding is summed up in a new book, How Rich People Think. 

Steve concluded that being rich has little to do with the money itself. Instead, it had everything to do with mentality and how you think about money. The book is a pretty good read, and I recommend you get a copy. In the book, Steve divides people between “World Class” and “Middle Class”. In the interest of better SEO, I will call the groups the 99% and the 1%. 

How to Think About Money

Why Our Money Mindset is Important

One of the great truths relevant to personal achievement is the fact that if you keep on doing what you are doing now you will keep on getting the results you are getting now.

If people keep thinking about debt the way most do now, they will continue to have the same success at becoming debt free that they are having now. Not much.

We don’t always get what we want in life but we always get what we expect.

People who study the mind and how it works have determined a few things that are indisputable. One is that no person can consistently act outside the confines of their internal beliefs. As I often express it, we don’t always get what we want in life but we always get what we expect.

Everything about your financial life grows out of your inner (subconscious) beliefs about money, your money mindset. If you believe buying on credit is the only way to get by you will buy on credit. If you believe buying on credit is an unnecessary and self-defeating habit, you will avoid it.

The conscious mind can override the subconscious belief system temporarily, but as soon as the mind loses its focus old behaviors reestablish themselves. Knowing this, it is important to identify the kind of thinking that is harmful and learn how to replace that kind of thinking with a more helpful process.

My parents demonstrated this in their own lives. They never once sought credit for anything. As a result they were able to save for whatever they needed. And though they never had high paying jobs, they always had what they needed.

This did not even prevent them from owning their own home. I remember as a child their buying first a “fixer upper.” We leveled the floors, redid the sheetrock, painted, etc. Then sold it. They added savings accumulated in the meantime and purchased another home. Later, they added on to it.

This is not to say that some loans or specifically a mortgage are never justified. It is simply to make the point that using credit is not necessary. It is not a necessary evil. It is just not a necessity at all.

Obviously, if one person pays $100.00 for an item and another pays $125.00 by using credit, the person who pays $25.00 less has $25.00 more to spend. And when debts compound and compound it gets worse and worse.

When you finance something like a car over several years you end up paying thousands of dollars in interest. When you finance your house for thirty years you end up spending several times more money for the interest than for the house!

The simple truth is that the person who pays cash can spend more than the person who buys on credit and have money left over to save for every need, including retirement. No truth is more certain.

A whole host of false beliefs center around the idea of “need.” For most people there is no difference between need and want—if they want it, it is a need! This is a self-defeating mindset.

Most of the time when people decide to buy a new car it is because they just got started thinking about it. At first it was a fleeting thought. Then it was a desire to upgrade a little. But by the time the thought gets serious it is, “Honey, you know we really need to buy a new car.”

Now I don’t want to get on the wrong side of my wife, or any other of the ladies out there, but let me ask this question. When you already have a dozen purses in the closet, how can you say to me, “I really need a new purse!”

If we really want to become successful with money, if we really want to stop over spending, we have to learn to distinguish between wants and needs.

Not only do we make particular items we want into needs, we even make such intangibles as brand names into needs. Not only do we need a new pair of jeans. We really need to buy a pair of Gucci “Genius Jeans.”

If we really want to become successful with money, if we really want to stop over spending, we have to learn to distinguish between wants and needs. It is one of the critical factors in getting out of debt and keeping out of debt.

There are other self destructive thinking habits that limit our financial success as well. You will learn them as you study the Laws of Money. These are the primary culprits and if you deal with them you will be moving in the right direction.

With some discipline we can resist making a purchase, temporarily, but even that leaves us with the inner thought that we really want to buy it. So we do so the next time we encounter an opportunity.

You already realize that debt, certainly consumer debt, is a bad idea. At least I hope you do.

But no matter how often you emphasize that idea to yourself, your subconscious mind just focuses on the words debt and want or need. It never hears the words good or bad, yes or no.

The subconscious mind acts consistently to bring about whatever you think about without regard for whether it is positive or negative. So you think you are telling yourself you don’t want debt but soon you will have debts, plenty of them.

Simply substitute the productive thought you want to make a priority for the destructive one that is causing you harm.

Now for the really good news. You can change the whole situation by changing the thought process in this way. Simply substitute the productive thought you want to make a priority for the destructive one that is causing you harm.

Elevate positive wants into needs at the same time you reduce imaginary needs into wants. This reversal of priorities will change the way your subconscious mind works. It will cause your subconscious to work for you instead of against you.

If this sounds like theoretical gobbledygook, it isn't. Make it practical. This is how it can be done.

Reduce needs to wants first by changing your vocabulary. Every time you say you need something, stop. Think it over. Do you really need it, or just want it.

The truth is, needs are few. Restate your thought. Remind yourself that it is just a want, not a need. Let your buying decision be influenced by that reality.

Next, elevate real needs to their appropriate level of importance. Make a list of your new financial priorities. Like what? Like these, stated as affirmations.

• I need to have enough money in the bank to pay my bills on time with a little cushion in case of bookkeeping slip ups.
• I need to have enough reserves to cover any unexpected expenses like car repairs or furnace replacement.
• I need to have the peace that one feels when there are no worries about some income arriving on time because there is money in the bank.
• I need to have a certain adequate amount of money into my retirement account each month so I can retire when I want.
• I need to have the joy, the peace and satisfaction that only comes to those who feel they are managing their money in a competent, productive manner.

In the suggested list, some of these call for specific amounts of money. For example, an emergency reserve might call for $2,000.00 for some, more or less for others. Each person must decide on a given amount. It is important to be specific in these cases so that there is a clear point at which money is available to spend.

It is important that you review your list regularly, read it aloud, instill it into your thinking until it is all automatic. Whenever an opportunity arises to spend money there should always be an evaluation of the financial implications. Decisions will be appropriate when priorities are appropriate.

Make Your Money Mindset Work For You

IMPORTANT! In computer circles when something is in all caps it is often referred to as “shouting” and is generally frowned on. But I put that word in all caps because I am shouting! The following point is just that important.

One of the greatest truths that you can discover in your quest to get ahead financially is that the amount of over spending required to acquire the average eight to ten thousand dollars of debt families can and do have in a country (America) is only ten to fifteen dollars a month! Let that incredible fact soak in.

Don't scoff or in disbelief ignore this truth! Check it out for yourself. The “miracle of compound interest” works in both directions, savings or debt. If you over spend each month and continue to pay interest on that credit card debt, it compounds at an alarming rate.

It is unbelievable, but true. Over spending just $20.00 a month, compounded monthly as credit cards are (some are daily) results in a debt of over $26,000! Ask yourself, “Is that kind of debt worth the little advantage of such a small amount of over spending each month?”

Think about how little adjustment you would need to make in your monthly spending to compensate for any amount you may be over spending and get out of debt completely. Think how little you would have to reduce your credit card debt to save twenty dollars each month just from lower interest charges.

It is only essential at this point to discover the amazing and happy truth that overall you only need to reduce spending a few dollars a month to start moving in the direction of all of these worthwhile financial goals. You can probably do that easily.

As soon as you have reduced your debt just a little you will actually able to buy more than people who are not on your course.

And as soon as you have reduced your debt just a little you will actually able to buy more than people who are not on your course., At the same time you are moving effectively toward your underlying goal of debt elimination. This is the positive mental message that must underlie all of your self-talk.

If you are questioning this because you typically over spend by buying items that cost more, don't be fooled. Some months you go over a good bit and other months you spend less than you earn. But the average amount of over spending is clearly a very small amount or you would owe many times more than you do.

The typical problem that people have is that savings in one area are lost in another. In the next article, Learn to Live on Less than You Make, I will show you how to avoid this difficulty.

You can feel positive about your debt reduction program when you realize that it doesn’t take a lot more money coming in or a large amount of cut backs in expenses. What it does take, however, is a commitment to take charge of your money and a sincere desire eliminate debt.

Remember, you don’t always get what you want in life, but you always get what you expect. Start expecting to be successful with your money.