I find that often the biggest revelations in life come from the tiniest thoughts. It’s like the tiny thoughts drift into my brain cells like powerful seeds. And when they take root, these tiny thoughts can grow into revolutionary ideas that make incredible, positive changes in my life. Here are 3 Money Mindset Tips that Have Totally Changed my Financial Outlook on Life:
Money Mindset Tip #1:
Consistent investing is the key to unlock the magic to build wealth.
What this means: I used to stress about trying to time the market and being perfect every time I made a financial investment. But I realize now that it’s impossible to be right 100% of the time. Being right 80% of the time is more realistic, and if you can be right 80% of the time when you invest your money, you’re still going to be kicking butt financially in life. So rather than stressing about being perfect, it’s WAY easier to invest consistently over a long period of time and be cool with the 20% of decisions that turn out to be unlucky, the wrong timing, or just duds.
Don’t shoot for perfection. 80% right is still WAY above average in the American money world.
Money Mindset Tip #2:
Anyone can build wealth. But you just have to get lucky once, and then save and invest the majority of your good fortune.
What this means: A financial lucky break that can jump start anyone’s ability to build wealth can come in the form of a great high-paying job; or an awesome business idea; or a huge client; or just being the beneficiary of a big inheritance from a rich family member.
But when you get lucky, you have to have the discipline save and invest everything you make. Because if you spend your lucky break, you’ll be broke before you know it, and you’ll be dependent on needing to be lucky over and over again to become wealthy, and that fantasy just doesn’t happen in life.
When you get a lucky break in life like a high-paying job, or a huge client for your business, dump everything you make into my five best investments to become a millionaire, and you’ll only need to be lucky once in life to become wealthy.
Mindset Tip #3:
W-2 employee income doesn’t make a person wealthy. The size of your investment income is what makes a person wealthy.
What this means: Being able to spend a lot because of a huge annual salary doesn’t’ make people wealthy. What does make people wealthy? Owning assets that provide huge cash-flow stream even when they’re not “working.” What’s the difference? W-2 jobs can disappear overnight due to forces totally outside of your control like an economic slowdown or a company layoff.
But when your income originates from investments, that money stream keep flowing and flowing no matter what happens to you.
This is why I NEVER look at my W-2 income, or business profit, as money that’s available to spend on luxuries. Instead, I ALWAYS look at my W-2 and business income as a cash stream to buy more assets, that will increase my investment income. Why? Because a salary from a job can disappear tomorrow due to an illness, accident, or layoff. But investment income will keep coming and coming, and coming to the day I die, even if I never go to work again.
In conclusion, W-2 or business income doesn’t show me how wealthy a person is. Investment income does. If you want to be wealthy, focus on increasing your investment income until you are.
For example, together my wife and I together make more than $55,000+ annually. Since our living expenses are right around $35,000, a casual budgeter would think we could spend the remaining $20,000 surplus of cash that we make on whatever we wanted.
Instead, an elite budgeter and investor, would use that remaining $20,000 to buy as many assets as they could to increase their investment income. For example, we’re currently making around $10,000 per year of investment income from our stock dividends and rental property. Since I only make around $10,000 per year in investment income, it makes me realize that even though we’re starting to have a high net-worth, we’re not as wealthy as I think because that $10,000 of annual investment income only covers about a third of our living expenses.
But once our investment income is generating $50,000+ a year, which will cover our living expenses and even more, without having to ever work again, that’s when I’ll start considering ourselves truly wealthy, and I won’t be afraid to have a little fun and help alot of other people with the money my investments are making for me. Why? Because investment income streams, once established, keep generating money no matter how you choose to spend your time alive. Peace.
What money mindset tips have changed your life?
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I full agree with your view that our mindset change the surrounding to make money. I really in the favor of your #1 point about consistent investing is the key to unlock our wealthy path and the #3 that the size of investment also matters.
Your post gives a new approach to think about our financial planning.
Thank you for this informative post!!!