I didn't grow up with a poverty mentality. But I did have some of the middle-class prosperity guilt that told me it was fine to be successful, just not too successful. It was fine to have money, but not more money than the neighbors.
After reading an interesting article by DailyFinance, I thought about the author's premise that rich people have polar opposite views about money compared to middle-class folks. Steve Siebold, the author of "How Rich People Think," says that rich people don't think of money as the root of all evil, but as freedom and opportunity. I thought about whether I could shift my own perspectives on money so that I don't end up in middle-class limbo until I die.
Focusing on earning
According to the article, middle-class people try to save their way to wealth. Meanwhile, wealthy people boost their earnings so they have more to save. My personal plan is to learn to live below my means. I focus on the earnings in my investment accounts instead of my salary, which is stagnant. If I want to escape the middle class, I could work on the area of earnings.
Starting a business
Evidently middle-class people see starting a business as a risky endeavor. I can see how business owners start on the path to wealth by opening a business. Considering I've never had my own business, starting one would be a giant leap outside my comfort zone. I've always favored investments as a means of getting wealthy simply because it's a lazier approach and requires less interaction with people.
Seeing money through eyes of logic
The author goes on to say that wealthy people are more logical about money. They don't make decisions based on emotions. I think I have this one nailed when it comes to investing. I am very detached when it comes to money because I'm not a materialist. However, I do like the emotional sense of security, which is why I pay down my mortgage even with a low interest rate. I know it's not logical.
Setting firm goals
Another way rich people think differently is by having do or die goals instead of being nonchalant about their goals. I think that is one way I think like a rich person. I clearly define my financial goals. I figure out exactly how much money I need to save for retirement or to pay off debt by certain deadlines. I've found being too casual about my goals gets me nowhere fast.
Living below my means
After living beyond my means in my 20s, I racked up about $50,000 worth of student loan and credit card debt. I never want to go back to a life of debt. I've learned that I don't have to spend money even though I have it. It used to be I thought I had to spend money just because I had the credit card limit. Now, I rather put money in savings than spend it on frivolous things.
Although I still need to shift my thinking and revise some of my core beliefs about money, I am making progress. I am not trying to become rich so I have fancy things. Rather, I want a simpler life of no bills but money in the bank to help my family and to leave an inheritance.
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- Banking & Budgeting