One reason the rich manage to build and maintain wealth is that they often think differently than the rest of us. Your mindset and the way you view yourself and the world has a huge impact on your financial success. One powerful way to get started on the road to wealth is to begin thinking like the rich. Here are seven great ways to accomplish this:
Find Ways to Turbo-boost Your Earnings
A lot of financial advice is focused on how to skimp and save by cutting things like cable and Starbucks runs from your budget. While these small savings can help, they probably won’t ever make you rich. Savings are all about percentages. Let’s say you aim to save 20% of your income each month. If you are only bringing in $2000 per month, then you will save $400. This is a respectable amount of monthly savings, but it will never add up to great wealth. On the other hand, if your income is $6000 per month, that same 20% is now $1200 or nearly $15K annually added to your savings.
In addition, the higher your income, the higher a percentage you should be able to save each month as long as your lifestyle remains relatively stable. In sum, you need to make more money to save more money. Now is the time to talk to your boss about that long-overdue promotion, begin positioning yourself as an expert in your field so you can snag a higher paying job, or supplement your income with a lucrative side hustle. Set specific income goals on a monthly, quarterly, and annual basis, and then hustle to meet them. Rich people believe they deserve to make more money. If you can borrow some of their confidence, you will soon see your income grow.
Create Passive Income
When paying down debt and beginning to build wealth, there will probably be stretches of time when you work very long hours. For the rich though, a lot of wealth is based on doing less work by finding savvy ways to create passive income streams. Passive income means money that comes in each month from sources other than a full-time business or job. Generally, passive income streams require a lot of upfront work but then continue to pay you each month with only a minimal amount of ongoing work. This means you can make money from anywhere, anytime, even while on an extended vacation or sabbatical. Because you can earn passive income while also earning regular income, this is a powerful way to boost your wealth fast.
One of the most popular ways to earn passive income is to purchase a rental property that you fix up and then rent out. Other ideas for passive income include creating information products like online courses, e-books, or DVDs that teach your clients new skills. Keep in mind that passive income streams generally require a lot of time and some financial investment up front, before that residual income starts rolling in.
Take Care of Yourself First
It may sound cold-hearted, but most wealthy people get that way by putting their own needs first. This doesn’t mean they aren’t generous, as many rich people take care of less well-off family members and make large donations to their preferred philanthropic causes. But they don’t do this until their own financial needs and wants are tended to. This means that if you are struggling to pay bills and someone asks you for a loan, it is perfectly okay to say no. Focus on paying off your debt and building your savings. Once you have your own wealth established, you will be able to be very generous without this generosity causing you to be broke and stressed out.
Studies have repeatedly shown that people who practice gratitude and are thankful for what they have are more successful, financially, personally, and in the business world. The rich didn’t get that way by focusing on their setbacks and the ways life has treated them unfairly. Instead, they focused on the things that went right, which then caused these blessings to flow even more abundantly. The more grateful you are, the more emotional and mental energy you have to focus on being productive and creating success for yourself. An easy way to implement this rich person habit is by ending each day by creating a note listing anything positive that happened that day or anything specific you feel grateful for.
Be Less Emotional About Money
When you are struggling to make ends meet, it’s easy to become overly emotional about money. The rich tend to see money in a more detached, logical way. They know that sometimes their investments won’t do well and their wealth will take a hit, but that hard work and calculated risks will get them back on top. Instead of allowing money to affect them emotionally and weigh them down, they simply see it as a practical tool for creating the type of life they truly want.
Making the switch to a less emotional, more pragmatic financial mindset can be very liberating. Instead of panicking and crying in the middle of the night because you are worried about your credit card bill, aim to look at it in a clear-headed, unemotional light: what practical steps do you need to resolve this temporary problem?
For more financial tips and hacks concerning everything from paying down debt to earning money in your PJs from the comfort of your couch, be sure to check out our blog and contact us with any questions.