Growing up I was taught a couple things that shaped my beliefs about acquiring wealth, rich people and debt. By the time I was an adult I believed it takes money to make money, I had to go to school to get a good paying job, avoid getting into debt and all rich people only care about themselves. It wasn’t only me, it was also my peers, friends and family members that shared this belief system and none of them were wealthy. They all had a w-2 job which they complained about, had bills and credit card debt and were always complaining about the stock market and how much they’re losing or not making.
It was until I got educated on the financial principles the wealthy live by and started hanging out with entrepreneurs and real estate investors where my mindset changed and so did my financial situation. I now don’t have to worry about a job paying me what they think I’m worth, I get to work from home while spending time with my wife and daughter and I get to decide how much money I make.
It all started for me when I learned about the 8 financial assumptions my mentor taught me.
- A good job – Getting a good job is a good start but it’s not the end all be all, too many people get “stuck” in that “good job” mindset until they realize that there’s no such thing as job security. Now a days people switch jobs every 3-5 years! but because people with “good jobs” acquire liabilities they’re stuck in the rat race to keep up with the bills. Getting a good is a good thing if you’re also responsible with what you do with the money, if you’re saving, investing your money in a business or assets along the way it’s a matter of time before you don’t need a job anymore.
- Save your way to wealth – How much interest are you getting in your savings account 1%? If you’re familiar with the rule of 72, it will take 72 years for you to double your money, isn’t that exciting? Your savings account isn’t even keeping up with inflation in reality your losing money, $100 today will not be worth the same 10, 20, 30 years from now.
- Debt is bad – There are to kinds of debt, good debt and bad debt. Most people are familiar with bad debt that’s when you use your credit card or borrow money for things that are not making you money only costing you money, we call those liabilities. Good debt is when you use money to make money by investing in a business or income producing asset like real estate, in other words you use other people’s money to make a higher ROI than what you borrowed.
- Security is Good – Is there such a thing as a secured investment? There is no such thing, we hit on that in step #1 with jobs right there’s no such thing as job security. How often do you hear people that stay with the same company for their entire careers? The same goes for investments, there is no such thing as a 100% secured investment but there does exist calculated risks. That’s the goal for investors to minimize risk by education and obtaining information.
- Failure is bad – Most people never take any risks because they’re too afraid to fail but in reality failing is necessary to succeed. Thomas Edison failed over 1000 times before he invented the light bulb, Henry Ford failed and went broke 5 times before he became successful. It’s very rare where people accomplish their goals in their first attempt, failure is only bad when you don’t learn from it.
- Wealth is measured in material things – Too many people try to keep up with the Joneses. Rich educated people often do not flaunt their wealth, poor and middle class people drive / walk around around in their net worth. People try to show off their wealth by putting their money in material things Liabilities the wealthy use their money to purchase assets. (sound familiar?)
- Acquiring wealth is win or lose – Often times people accuse real estate investors of taking advantage of homeowners. In reality a real estate investor is a person that solves home owners problems by providing options to homeowners that nobody else can. Every market needs real estate investors that’s why you don’t see many vacant houses with uncut lawns or broken windows that drive property values down.
- It takes money to make money – This is the biggest assumption most people have, yes money is involved in a real estate transaction but it doesn’t have to be your money. In fact there are many strategies investors use to purchase properties without using any money, learn about them.
I hope this helps you to change your mindset about wealth and acquiring money, you get everything that you focus your energy on. If you focus your energy on negative thoughts that don’t help you grow you’ll continue to get what you’ve been getting out of life, if you focus your energy on positive things that help you grow you’re going to attract positive things to your life!