My investment philosophy exploded like a string of firecrackers in my brain-cells recently as I was exploring the knowledge in my mind.  I realized my investment philosophy was full of thoughts I wanted to think about more.  As I dug deeper into these thoughts, I asked myself:  “What does my mental portfolio look like?”  

As I explored the idea of what’s inside my “mental portfolio” I discovered that I prioritize philosophical ideas over financial ideas. 90% of my mental portfolio is based in philosophy, and only 10% in strategic financial concepts.  I found it fascinating that only 10% of my brain thinks about numbers, and yet, I have been able to succeed with money and build a powerful amount of wealth in a short period of time even though money is mostly a numbers game.

Personally, I don’t worship money.  It’s probably why I don’t think about numbers.  But I do worship philosophy. Learning and improving myself are the ideas I think about all the time.  The financial concepts I do understand are pretty basic, but I am learning that you only need to know the basics of mathematics to succeed with money.  This discovery led me to ask myself: “So if I’m not naturally great with numbers, how did I accomplish all my money goals because financial transactions are based on knowing your numbers?”

What I learned is that having the right philosophy in your brain (for me at least) is more important that being brilliant with financial calculations to build wealth.  I am writing this post to give hope to those people who love philosophy, but don’t believe they have the natural number skills to be good with money.  Just because you’re not a mathematical wizard, doesn’t mean you can’t use the skills you do have, such as philosophy, to become great with your finances.

Let’s do a deep dive into my mental portfolio, which I have illustrated into a creative pie-chart below.  This pie-chat shows how I categorize and structure the wisdom I retain in my brain:

This chart shows you that you don’t need a ton of super-deep economic, mathematical, and financial knowledge to succeed with money.  If you’re using a lack of talent with numbers as an excuse as to why you can’t get ahead, I am here to tell you to stop telling these lies to yourself.  Believe that you can do it.  If becoming a math nerd that analyzes financial spreadsheets all day sounds fascinating to you, then more power to you and become that person.  Building wealth is the adventure to become whoever you want to be.

But if you’re like me, and don’t really care about mathematics or the numerical side of finance, I want this chart showing my mental portfolio to inspire you.  You don’t have to be a math-pro to succeed with your money.  You just need to know a few basic economic and mathematical concepts to guide you in the right direction.  This revelation is kind of freeing to me, because it shows me that you don’t have to become someone you’re not to master money.  You can be a philosophical person, and build just as much wealth, as someone who studied finance in college and crunches numbers all day.

Don’t believe me?  Look at the chart again.  As you can see, 90% of the thoughts in my brain are philosophically based.  They’re basic concepts on how to be a good human being, and how to live a fulfilling life, that anyone can learn.  Only 10% of the thoughts in my brain have roots into hard financial numbers.  If I can build a net-worth of $250,000 in only five years, with only 10% of my brain devoted to mastering financial numbers, then you can too, if you adapt the right philosophies into your life.

I believe self-awareness is one of my strengths, so I’ve learned how to use that strength to help me with my finances.  Personally, I am just naturally better at comprehending philosophical ideas, over mathematical ideas, so I focus my attention on finding the best philosophical ideas the world has to offer.  Then, I use these ideas to transform my life into the life I WANT to live.  Since I feel the most confident engaging in philosophical ideas (90% of my brain), I learned I really only needed 10% of my brain devoted to financial knowledge to become great at saving money, investing money, and ultimately building wealth.

Let’s dive into the different categories that make up my mental portfolio, so I can share examples of the philosophies that I consider my greatest assets:

The First 50% of My Mental Portfolio:  Philosophy on Being a Good Person.

A surprising fact about me (considering that I run a financial blog) is that 50% of my brain is based around the philosophies that will help me become a good, productive, likable, and unique human being.  For example, here are a few examples to show you what my “good human being” philosophies look like:

Don’t do everything yourself.  You can’t.  Think about others.  Help others and they will help you.  Helping is the action that will lead you and others to wealth.

Don’t waste time.  One day your time alive will be over, and you’ll regret every memory you have of wasting time.

Failure is a necessary part of growing.  If you succeeded at everything you did, you’d never learn anything, and learning is the key to unlock the doors of wealth.  Failure is the greatest education.  Become educated through trying and failing, and then use that education to succeed and create wealth.

Real friends don’t expect you to be perfect.  Real friends are imperfect people who want to strive toward perfection with you.

Money doesn’t create your self-worth. The quality of a human’s ideas, and how they execute them, will create your sense of self-worth.

Don’t live the life other people want you to live.  The only voice that can tell you what to do is God’s.  Live the life your soul craves to live.

Look at the above ideas and philosophies: 50% of my mental portfolio has nothing to do with money!  But if you look into each of those philosophical examples, you’ll see that if executed correctly, these philosophies will naturally lead a person to opportunities to create wealth.

For example, when you help others, you are creating value that someone may pay you for eventually.  When you focus on maximizing time, rather than wasting it, you will naturally find yourself creating things and experiences with your time that have value to others.  You can then sell those things for money to build wealth.  When you’re not afraid of failing, you can take risks that may allow you to succeed on a massive scale.  When you make real friends, you will find yourself joining an army of motivated human beings who want to help each other succeed.  Wealth is often the result of friends helping each other succeed.

I truly believe it’s the art of philosophy, not mathematics, that leads human beings to wealth and fulfillment.  Philosophy is an energy source in the mind that can guide, motivate, and lead any human being to the life they dream about.  The right philosophies in your mind can help you overcome any obstacle in your way.  Financial and numerical knowledge are just tools that can help you create financial margin and execute the philosophies in your brain.

The second 40% of my brain is just more philosophy that I use to help make financial decisions.  For example, here is how a few basic philosophical concepts help me improve my finances:

Whoever saves more money than they spend, will have more money than they need.

Be prepared for rainy days and long winters.  The sun won’t shine every day.

Investing is the act of building a money printing machine.

Some of the best things to experience in life don’t cost any money.

You’ll sleep better at night with an emergency fund.  You’ll sleep even better when you have so much money you no longer have to think about money.

Buy on credit and take out loans if you want to make other people rich with your money.  Avoid credit if you want to make yourself rich with your money. 

A penny saved is a penny earned, and a million dollars is just a bunch of pennies that someone earned and saved over a long period of time.

It’s kind of a cool exercise to evaluate your own mental portfolio.  What are the thoughts inside your brain?  How are they structured?  What does your mental portfolio look like?  Your mental portfolio is extremely important to understand because everything you are, and everything that happens to you, begins with the thoughts in your mind.

The Third, and Final 10% of my mental portfolio is based in mathematical concepts that help me analyze economic and financial opportunities.  Below are some of the mathematical concepts that have helped me build wealth.  If you’re not naturally good with numbers like me, don’t worry.  You don’t have to be a numbers wizard to build wealth.  After all, numbers only make up 10% of my mental portfolio, and I’ve done just fine.  You can do the same.

Compound interest, as Einstein once said, is the 7^th wonder of the world.  Make sure to understand and incorporate this “wonder of the world” into your own financial life to win with money.  Here’s a riddle to show you how powerful compound interest can be:  Lilly pads on a pond double every day, and after 100 days, they will completely cover a pond.  How many days will it take to completely cover the pond with lily pads if it takes 99 days to cover the first half of the pond?  Answer:  It will only take one day to accomplish the same outcome that took the previous 99 days !  Always be thinking about ways to utilize compound interest with your finances.  This is how you double your money into massive sums over long periods of time without having to do any work yourself!

Money invested in the stock market has historically doubled every 9 years.  Realize $10,000 today has the potential to be MUCH more if it’s invested in a safe and diversified way. (Index funds!) $10,000, if invested, is really closer to $100,000 after it doubles for a few decades.  If you invest a $10,000-$20,0000 sums every year, and those sums just keep doubling every year, that’s probably a couple million dollars after a few decades!!!  A couple of million dollars in my bank account sounds way more exciting to me than a new car every few years.

Real-estate is great for portfolio diversification, and awesome cash-flow opportunities.  If you’re thinking about buying real-estate, make sure you’re getting those two things.  If you’re not getting those things, you could just be buying a huge headache for yourself.

If you’re able to save $1 for every $5 you make, then you can save $6 for every $10 you make.  To become wealthy, find ways to increase your income, NOT your spending.   Don’t make the mistake of raising your spending habits just because your income rises.  The only good reason to spend more money is if it’s going to make you happier, healthier, or teach you something.  Don’t just spend more because you have more.

7% returns on Investment are better than 0% returns.  But 20% returns are better than 7% returns.  Gleefully seek the biggest percentage of returns that you can find.

Let’s say two opportunities to have fun present themselves to you:  One costs $20, and the other costs $100.  Do the things that cost you $20 most of the time, and only do the $100 things on special occasions.  Save and invest the rest into your wealth-building fund to become financially free.

Debt interest is bad no matter what it is.  However, if you’re going to take on debt, then at least try to make money on the debt you’re taking on.  Here’s an example on how to make money on debt:  I have an investment property mortgage that makes me a 20% return per year, and I only paid 4.75% per year to borrow that money.  I get to keep that 15.25% profit using other people’s money.

$5 + $5 = $10 is a good and healthy equation.  Addition signs are awesome to see in personal finance!  It’s the subtracting numbers you have to be afraid of.  When you see subtraction signs (-) stealing money from your net-worth, find ways to get those subtraction signs out of your life so you can keep that money!  The more addition (+) signs the better!

In conclusion, as you can see above, it’s pretty simple to become wealthy.  It’s not rocket science.  You just have to have the right philosophies in your mental portfolio.  Load your mind up with the best philosophies, and then use a few basic numerical concepts to help you make the right financial decisions.  Finally, below is the mental portfolio that works for me:  90% philosophy, and only 10% numbers.

So what does your mental portfolio look like?

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