Chapter 1: Money Mindset
Let's start things off with a nugget of wisdom from the brilliant investor Bill Mann:
“There is no faster way to feel rich than to spend lots of money on really nice things.”
But here’s the kicker: looking rich and being wealthy are as different as night and day. Those who splurge on mega-homes, flashy cars, and the latest gadgets aren't necessarily swimming in cash. Wealth isn’t about what you spend, it’s about what you save.
It's the money you have in your bank account or invested wisely, it’s not the money you blow on nice things.
Think of that fancy car you so badly want still sitting at the dealership, the designer bag lingering on store shelves instead of on your arm, or the expensive smartwatch that you choose to pass on - that's wealth untouched. Why? Because you chose to keep your money instead of spending it.
Wealthy people refrain from overspending because doing so would make them no longer wealthy. It’s a learned habit that helps the rich get richer.
(Check out our favourite book on building better habits)
Social comparison can be a slippery slope…
We've all looked around at friends and family, wondering how they manage it all. They've got the fancy house, the shiny cars, the latest gadgets, and still whisk off on vacations. But scratch beneath the surface, and you might uncover a different story.
Perhaps they had a financial leg up from their parents, won the lottery, or more commonly, they're swimming in debt! What's hidden behind their lavish facade? Can they clear those credit card bills each month? Are they dipping into lines of credit to keep up appearances? What about student loans or mortgage payments? Retirement savings who?
It's tempting to admire their seemingly perfect lives, but behind the scenes, they could be teetering on the brink, funded by debt and a paycheck or two away from collapse.
Consider this…
Your neighbour has a million-dollar home but no savings. Surprise! They’re not in the wealth club; they’re one step away from financial ruin if they lose their job. But imagine living in a small apartment with a million bucks stashed away - now that's wealth. It's about saving, not splurging.
Wealth isn’t just about a big paycheck. Someone hauling in $10,000 a month but spending most of it? They’re living paycheck to paycheck. They're just one unexpected expense away from financial disaster. They’re broke! Yet, someone bringing home $3,000 a month but saving a small chunk of it? Now, that’s the beginning of building wealth.
As you can see, having all the nice things or bringing home a big paycheck won’t make you wealthy. For the majority of us who weren’t born into it, wealth will build up slowly over time based on the many decisions we make every day.
So, if like us you're excited about the idea of reaching financial freedom, it's time to start building wealth, not just collecting more stuff.
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