Most of us have a plan. We'll win the lottery and then live happily ever after. However, what most people don't realize is that most of the people who win the lottery go from rags to riches to rags within a span of five years of winning the lottery.
On the other hand, there are some people and some families who come from war tone zones, who lose all their riches to the war and end up going from rags to riches within the next 10 years.
A lot of personal finance focuses on the math of the money. However, mindset actually plays as much, if not a bigger role in the creation and sustenance of money.
After studying the Rich for over the last 10 years, I have found these five key principles that you can steal from the rich to reprogram yourself to create more abundance in your life.
1. Understand your money story
Now, all of us, whether we like it or not, have a money story. Whether our family was squabbling about an inheritance, whether our parents were gambling away the money, or they were simply struggling to make booth ends meet and put food on the table or if they thought that money was aspirational.
All of these created an imprint, an emotion and sentiment about money in our lives, in our minds. Our job, as responsible adults, is to understand what those stories are, understand the wirings we have about money, and be present to them. And revisit those stories and reconsider those wirings to say that money is simply a tool.
Money is a tool that you can use for good or for not so good in the world. The choice is really yours, whether you want to be wise with money or not.
2. Most of us believe that money is a representation of power or money is a representation of security. While that is true in some cases where money gives you access to more things in the world, meaning more materialistic pleasures, Money in itself is not necessarily power. How you've used money can give you that power.
Similarly, money is not really security. Sure, it can put some food on your table. But there is no security that the money will last through your life. Ask me. I have seen my family go from riches to rags in a matter of 10 years where we lost everything due to the Indian partition. However, I do understand that we need to feel safe in our body before we can talk about abundance and wealth.
This is why I say build your emergency fund before you start paying off your debt or before you start investing your money. Because unless your body feels safe in that, that you will always have access to a basic amount of food and shelter, your body and brain can't really take that next step in thinking how to create abundance.
However, if I was to redefine all of that, I would equate money to value, which means the more value you create in the world, the more money you'll have in your bank account.
3. Follow your leverage.
A lot of people on the internet will say, follow your passion. However, if you look at the richest people in the world, consider Warren Buffet, consider Steve Jobs, Jeff Bezos, Bill Gates, all of them have followed their own unique leverage to create more wealth in their life.
But how do you know what your leverage is? You need to identify what you are uniquely good at than most other people in life. For example, some of you would know that I did a Master's in economics and then spent over 10 years working in financial services, which gives me this unique leverage to talk about money in a way that most other 18 year olds on TikTok can't.
Using your leverage is how you get to becoming more wealthy in your life. Consider Warren Buffet for example. He followed his leverage of business analysis. However, instead of doing business analysis, if he wanted to get into music, sure he might have been quite successful. However, the amount of time he would have needed to spend to get to the same level of a professional musician could have been significantly higher.
This really sums up leverage for me, create where you already have the strength rather than starting to develop your strength from scratch, because sure, you can do the latter, but it'll be much harder to compete when you do the latter than focusing on your leverage. Your leverage gives you an extraordinarily high amount of productivity.
4. Focus on the production equation.
In economics, we pretty much consider income to be equivalent to your produced output. The production equation looks something like this:
Now, the capital and the labor are things that you can't really change that much in the short term because you have the 24 hours in the day that everyone has, and you probably have access to capital that you have in your current time. However, when you look at this equation, you will see that increasing productivity has a direct correlation with increasing your income and the easiest way to increase your productivity is to focus on your leverage. The moment you focus on your leverage, you increase your productivity and you increase your income.
In the personal finance world, most people focus on the consumption side of the equation, which is reduce the amount you spend. Which is great except for the fact that there's only so much that you can save. There is no limit to how much you can earn, but the amount you can save is always limited. Which is why I would much rather that you focus on the production side of things.
5. Affirmations and mantras.
I'll be honest, this is not for everyone, and if you don't feel aligned to it, you don't have to do it. However, affirmations and mantras are one of the quickest ways that I have found to change the course of my life.
As I mentioned, most of us have money stories written into our subconscious, and if we can reprogram our subconscious and rewrite those money stories, using affirmations and mantras, that becomes extremely powerful. I understand that affirmations and mantras sort of get a bad rep, especially considered in conjunction with the manifestation and the vision board world.
However, what most people don't realize is that affirmations are not just empty set of words. For example, I don't want you to lie to yourself and say that, you are a millionaire when you are not. However, you could say that money is on its way to me. Now, you could be really difficult and ask me, how do I know that money is on its way to me? Is it not lying? And I would ask you, how do you know that money is not on its way to you? Either way, we don't know. Why not choose to believe in the thing that is going to be better for us?
You could also use other affirmations like I'm good at managing my money. You could tell me that, well, I'm not really good at managing my money, so saying that doesn't feel really aligned to me, and here's what I want you to consider. An affirmation is not just a set of words and affirmation becomes firm in action. So, yes, you need to have a certain degree of awareness of your spending and your money habits before you can affirm something like that to yourself.
So awareness needs to come first before you can affirm, but affirming just with a set of words, without actually affirming with your action, isn't helpful. If you just say an empty set of words without following through with action. Your subconscious says, they tell me that they are good at managing their money, but actually in reality I find that they are not. So, I would rather believe the action than the affirmation.
So, affirmation is really a three step process:
awareness,
affirmation, and
action.
Without that, the affirmation will simply not get anchored in your life, in your subconscious.
These were the 5 key principles which you can steal from the rich to reprogram yourself to create more abundance in your life.
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