Do you know the difference between a wealth builder and the average person?
Do you know that to become wealthy all you need is change the way you think?
Do you know that majority of millionaires underspend?
Yes. I am sure you are surprised… that real millionaires… don’t fit the picture that movies like Wall Street and Dallas depict about millionaires
The truth is millionaires think differently about money unlike the rest of us.
Why? Because a wealth builder knows something about wealth that you don’t know.
You see the difference between a wealthy person and a person struggling financially boils down to: how they think about spending money
Here is why…
A person with a wealth builder’s mindset thinks about increasing his net worth.
A spender only thinks about spending money to look rich.
Wealth builders spends less than they earn. They save more of their income and invest more than the rest of the population
That is why I stress that… in other to build wealth you must think like a wealth builder
Why? Because only when you start to think and behave like a wealthy person that you can become financially free.
This means that when you find that you are struggling with the idea of becoming wealthy…
or you desire financial independence…yet you can’t seem to succeed at accumulating wealth…
then you probably don’t have a wealth builder’s mindset
You need to develop a wealth builder’s mindset.
That is a way of thinking and acting that empowers you to accumulate wealth.
In other words you need to develop a habit of an automatic wealth accumulator
You need to change your mindset from that of a spender to a wealth accumulator…
or else financial freedom will be a fantasy that will never come true
Why is, having a wealth builder’s mindset important? The answer is simple
There is abundant evidence to show a direct relationship between wealth and your spending habits
The less you spend and save to invest, the higher your chances of building wealth.
The more you spend money without saving and investing…the less likely you can accumulate wealth
Stanley study of millionaires and wealth found two distinct groups of people:
prodigious accumulators of wealth PAW and under accumulators of wealth UAW
Stanley found that virtually millionaires are PAW and 95 percent of the populations are UAW
Stanley’s study looked at the habits of millionaires that enabled them to become wealthy while the rest of us struggled financially.
Here is what Stanley’s study found:
- Millionaires live below their means.
- Millionaires spend less than they earned…
- Millionaires saved more
- and invested more of their money than the rest of us
On the other hand 95 percent of adults have a high propensity to spend more than their means.
Most of us emphasize spending to have the trappings of wealth so as to look like millionaires
This is in stark contrast to what wealth builders do.
Wealth builders avoid spending money on the symbols of wealth. Because they know-that true wealth comes from having-a healthy bank account.
Ultimately accumulating wealth boils down to… spend less than you earn and growing richer daily
My experience about building shows that it’s not easy to avoid the impulse to spend money
Why? Our brain is wired, in a way, that links spending with pleasure.
You have been conditioned in such a way that when you think about money…the next thing you think about is how to spend it
The change you have to make is to rewire your brain. So that you cut the link between spending money and pleasure.
Then you reprogram your brain to link pleasure with saving money and increasing your net worth
In my study of the subject of wealth building and experimenting many methods of developing wealthy habits… one simple and powerful technique I found useful
I first learned about this technique from my mentor, Michael Masterson
Michael Masterson, master wealth builder and bestselling author of Automatic Wealth: The six steps to financial independence recommend that you start a habit of regularly keeping tabs of your net worth.
Here’s how Masterson suggest you track your net worth:
- Start writing and keeping track of everything you own and everything you owe
- Make a note of your net worth and promise you’ll to what it takes to make your net worth bigger than it was before
Masterson calls this exercise a financial equivalent of a diet pill because it will help you keep out of debt.
He warns that you may find this exercise disappointing initially… when you see the red bottom line of your balance sheet.
However if you persist in practicing this habit…you’ll be inspired to think about building wealth in a different way.
You will begin to see that many of your spending habits are financially unhealthy
The secret to changing your spending habits to that of a wealth builder…
Is that you use the lessons from calculating your net worth…to make a commitment to do what it takes to grow richer daily.
When I started habit of calculating my net worth regularly it changed my life and helped to increase my net worth.
I have not fully achieved my dream net worth. But I know I am on track to becoming wealthy
Do you want to start thinking like a wealth builder?
Here are 3 action steps you can use to develop a wealth builders mindset:
- Start the habit of calculating your net worth monthly.
- Each time you are calculate your net worth…Make a promise to yourself that… you’ll do what it takes to make your net worth bigger than before
- Make it a habit every time you are faced with an opportunity to spend to ask yourself: “will this make me richer in future”
A note of warning before you start: don’t do this in front of anybody, or talk about it to anyone. Because you don’t want be discouraged.
The more you practice this habit; you’ll find that you’ll gain the mental strength to continue building wealth.
When you consistently practice the habit of calculating your net worth. You will ultimately find spending less than you earn automatic.
It is at that point that you’ll know you have a wealth builder’s mindset