What is wealth?
Different people view wealth differently.
Some say, being wealthy means having an abundance of money, others call it heaving good health and living a desired lifestyle.
But wealth can mean something much more.
Wealth is a state of the mind.
A wealthy mindset or rather a rich mindset is the state of the mind that brings in the things you desire.
But why do you need to develop a wealthy mindset?
A person who just won a lottery is not wealthy. The person is only rich.
Without the correct mindset of the wealthy, he would have gone broke in just a few years time.
According to multiple studies conducted by universities. Statistics shows, people who win the lottery are twice as likely to file for bankruptcy than the general population.
- 70% of all lottery winners end up going broke and for a bankruptcy in within 10 years.
- 1% of lottery winners will go bankrupt on the first year.
- 43% said that their money had no effect on their happiness.
The reason is simple:
Although these lottery winners have the money, they are not having the right mindset to handle the money. They handle the money the same way someone with a poor mindset does.
Having a Wealthy Mindset, don’t only makes you wealthy.
Wealthy mindset teaches you how to handle money.
With that, we shall dive into the few simple steps on how to develop a wealthy mindset!
Step 1. Set Goals
People with a wealthy or rich mindset set goals. If you want to attain a wealthy mindset, the first step you should do is to set a firm goal on the things you want.
We want to set a goal that is high enough, so that we won’t be able to achieve it easily, but realistic enough so we won’t get disheartened.
One of the best way to set goal is to use the SMART goal method.
What is SMART Goal?
SMART is the abbreviation for the following:
- Specific – Your goal must be clear and well defined
- Measurable – It must have a way to measure its success
- Attainable – It is achievable in the set time-frame
- Relevant – This must be relevant to your final goal which you are seeking
- Time – There is a date where this goal have to be achieved
There is a secret where many Millionaires uses when they are working towards their goals.
Break your goal down into smaller pieces
This way, you can achieve each milestone step by step.
By making each milestone smaller and more achievable, you will be more motivated in continuing achieving the goal you set.
One such example is to save $10,000 per year by simply breaking down the process to month, weeks then days.
- 1k = $84/month or $19/week or $3/Day
- 2k = $166/month or $38/week or $6/Day
- 4k = $333/month or $77/week or $11/Day
- 6k = $500/month or $115/week or $17/Day
- 8k = $666/month or $154/week or $22/Day
- 10k = $833/month or $192/week or $28/Day
Saving $10,000 per year, sounds a lot, but $28 a day sounds achievable.
If you want to know the secret of saving $10,000 per year, or even $50,000 per year, you can check out our other article: How to save $10,000 per year?
Step 2. Take Actions that reinforce your mindset
Heard of ‘The Thinker’?
He had been thinking for centuries and is still “thinking”.
A ‘Thinker’ will not achieve anything, because,
“He who think and not act, will never be able to achieve anything.”
People with a wealthy mindset, don’t only think like the wealthy does. Successful people reinforce their goals and dreams with actions.
Instead of wait for the apple to magically drop down from the tree because they are hungry.
Those with a wealthy mindset do what they need to do to achieve their goals.
These handful of people with a wealthy mindset aren’t afraid to work hard to actually produce that wealth they desire.
Start work towards your goal today!
Don’t know what this mean? Below are some example to guide you on some of the dos and don’t of people with a wealthy or rich mindset:
People with a Wealthy Mindset Don’t:
- Wasting time watching TV dramas
- Wasting time on social media
- Wasting time watching cat video on YouTube
- Wasting time sleeping in late because it is the weekends
- Wasting money to impress others
People with a Wealthy Mindset Do:
- Use time to read books
- Use time to learn a new skill
- Use time effectively even if it is in the weekends
- Use money effectively to achieve their goal
Every single action they take is to let them move closer to their goal. People with a wealthy mindset reinforce their goals with their actions.
Question to ask yourself:
“Everyone have 24 hours, why some end up succeeding while others fail?”
Step 3. Avoid Negative People
Does it mean to discriminate people who are having tough time in life?
No, absolutely not, in fact you should help them in their times of need.
‘Avoid negative people’ means is to avoid those who have no ambition in life.
These people are people with a poor mindset. They are the whiners who blame everyone and everything in life.
Avoid these negative people, because they possess a superpower to contaminate everyone around them to become whiners. With their deadly mindset of the poor, it will make you loss track of your goals, and become a whiner like them.
How to identify these negative people:
- They blame others for the mistake they make.
- They are takers, not givers of the society.
- They think of the world as a zero sum game.
- They are manipulative and toxic to your emotions.
- They lack ambition to succeed in life.
There is a saying from the wise:
“You are the average of the five people that you spend your time with.”
What you should do:
Mix around with people whom you respect and admire. These are people who have succeed in creating the wealth that you desired. Ask them to be your mentor. Learn from them on how different is their way of thinking in compared to people with a poor mindset.
One of the main difference I notice is their way of thinking when facing a challenge.
For example, there is 2 friends who are of the middle income walking pass a nice neighborhood with massive mansions and personal pools.
Friend A: “I will never be able to afford this.”
Friend B: “What actions do I need to take, to be able to buy a house in this area.”
Which of these friends do you think will eventually live in that nice neighborhood with a huge mansion and a pool?
Friend B of course, simply because he have a wealthy mindset and is willing to work for what he want. While Friend A, closes all possibility of achieving his goal by simply saying he couldn’t afford it.
Negative people (Poor Mindset) says: “I will never achieve it.”
Positive people (Wealthy Mindset) ask: “How do I achieve it?”
Step 4. Never Stop Learning
Learning is a way of life and for those with a wealthy mindset. People with a wealthy or rich mindset are humble and never stop learning new things. Successful people continue to learn and grow even when they finish school.
The Value Investing Legend, Warren Buffett once said:
“Best investment is to invest in yourself”
So true, so true.
Indeed the best investment is to invest in your own knowledge. All these millionaires and billionaires are not rich because they have tons of money. They are rich and wealthy because they have the knowledge on how to make money.
A typical CEO read around 1 book a week, this is equivalent to 54 books a year. When in compared with a normal employee, most people read less than 2 books a year. That is like taking half a year just to finish a book.
Warren Buffett read 500 pages a day.
Learning is a way of life and for most skills, it is definitely harder at first. But as you practice, it will become easier. You will be surprise at how often these new skills you learn come come in handy at situations you least expected.
For a start, here are some of the best books you may want to check out from My Library.
Step 5. Think Big
Thinking big is what drive you to succeed. Although we should start with small digestible goals. We should always have a big final goal at the end of the journey.
It is OK not to always achieve the big goal in life as long as you try your best.
“Shoot for the sky, because even if you miss, you will still hit the clouds.”
You want to start a business and aim to make $1 million dollar profit by the end of this year (This is your Big Goal). But instead you are only able to achieve in making half a million dollar profit.
There is no shame in this, because you are still much better than those who have not even started in their business.
You are already a huge step ahead of them and one step closer to your goal.
For instance, my goal is to help 10 Million Readers to come and journey with me in this blog on personal finance, investing and business. But till this day, I am still far from my goal. Honestly, I am not even reaching 1/10 of my final goal.
Will the journey be tough? Will it be a long journey?
Yes, I do think it will take me lots of effort and time to reach my final goal. But as long as I work towards my goal, a step at a time. I know I will reach my goal sooner than I thought. In fact, I have already done much better than I initially thought.
With you on-board this journey, we will eventually hit our goal in no time.
Learning how to develop a wealthy mindset take a lot of work and determination to succeed.
Thinking without action will not lead you to your final goal.
We have to reinforce our thinking with the appropriate actions.
While the appropriate actions is guided by our knowledge, thus we have to be constantly learning new things.
And my advice is to:
Check out our post Rich Mindset vs Poor Mindset to learn the difference between these 2 mindset.
Reading allows you to learn from the experience of the most successful people.
Successful CEOs of big companies and billionaire like Warren Buffett read at least 1 book per week. Books found in My Library are some of the best books which I think you should read.
I am humbly requesting that you to take action, in additional to reading our articles.
Follow our step-by-step guide and take action, you will be surprise at what you can actually achieve with a wealthy mindset.
We love writing these articles because we want to help each other in our financial success. It is our mission to help to educate others in their financial education. We may not be experts, but we love to document our journey on what we learn and share to others who may find it useful.
If you find this article beneficial to you or to someone whom you may know.
Share to Facebook or Twitter
It may just be a simple click of a button, but you may just change their life.
Remember! If you want it badly enough to be financially freed and have control on your own life, you will do what it takes to achieve it!
Trust me, it will definitely be worth it!
Want to Support Us?
Share with your friends on Facebook or Twitter if this help them too.
This will motivate us to write even more amazing articles to help you in building wealth in the future!
Check out our Latest Blog Post Here.
Yes! I want to learn Powerful Wealth Strategy!
Disclaimer: I am not your financial adviser or lawyer, information found in our website are just my opinions. You should always ask your financial adviser or lawyer for any financial or law related advice.