Most money problems ultimately boil down to what we believe and how we behave with money. The effects our money behaviors have on our life can be uplifting, or they can be devastating.
When we have financial problems,
it can often lead to other life problems. When our finances are out of
order, then other areas of our life tend to follow suit and vice versa. In
this article let’s learn about different money mindsets which can change our behavior
towards money and ultimately our destiny.
1.
We should value our Financial Security
over the status
Wealthy people would rather have money in their bank
account rather than expensive cars and branded items. It can be a better option to live in an
average house in an average neighborhood instead of a high-status
neighborhood where we will have pressure to keep up with the neighbors.
Wealthy people don’t care so
much about what other people think.
They’d much rather have financial peace, freedom, and security over
fancy consumer goods and social status.
2.
We don’t need to change our Lifestyle if we
win a lottery
To be wealthy, we should know that when we get extra
income then it should not be wasted to show off. Smart people don’t increase
their lifestyle to match it, they understand that a raise is not an excuse to
get a bigger house, a new car, or more fancy stuff.
Wealth builders put their raises into savings and investments so that their money can make more money.
3.
We need to invest rather than wait for an
occasion
It's always tempting to spend money rather than save
it. People who are not actively building wealth tell themselves that they will
start investing:
·
When they get their next raise
·
Next year
·
When they get out of debt
·
Once they get the house paid off
·
And a million other excuses
Wealthy people don’t make
excuses about investing. They develop the financial discipline to consistently
put money into investments, even making investing a priority during lean times.
They educate themselves about investing or take guidance from an expert on how
to put their money to work instead of stuffing it in a savings account or under
a mattress.
4.
Spend less than earnings
Spending less than we earn is one of the most important
habits. There is no way we can build
wealth if we consistently spend more than what we make.
People with wealthy habits
understand that living a reasonable, frugal lifestyle is key. Living on less than we make allows us to have
money to set aside for wealth-building activities.
5.
Our Kids are our Assets
We should give good education to our kids which is a
backbone for their future. Further, we should also teach them good financial
habits. They should know how to handle
money, invest, and start money-making businesses so that they too can become
financially independent someday.
Wealthy people don't allow grown kids to live with them indefinitely or depend on their parents to prop up their lifestyle. Once the kids are grown up they’re expected to go out and earn their own way without depending on mom and dad’s constant financial help.
6.
Calculated Risk is Worth
To be wealthy we should be willing to take financial
risks, as long as the risk is worth the reward.
We don’t need to gamble on penny stocks or other investments with long
odds. But should put a certain amount (say 10%) of our portfolio into riskier
investments.
Most people who don’t build wealth tend to be too
conservative if they invest at all.
These people invest in things such as savings accounts, FDs, and other
investments that have a very low risk of losing their money but have terrible
returns which can’t even beat inflation.
Wealth builders consider riskier investments if they believe they will get a good return on their money without the potential of losing the entire investment. Some of their favorite “riskier” investments are individual stocks, mutual funds, businesses, Alternate investments, art/collectibles, etc.
Good article.
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