Do you know the difference between a wealth builder and the average person?
Do you know that you only need to change your thoughts to become wealthy?
Do you know that the 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 that millionaires think differently about money than the rest of us.
Why? Because a wealth builder knows something about wealth that you don’t know.
The difference between a wealthy person and a poor individual 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 spend 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 to build wealth, you must think like a wealth-builder
Why Only when you start to think and behave like a wealthy person can you become financially free.
This means that when 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 way of thinking and acting 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 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
Dr. Thomas Stanley, the bestselling author of The Millionaire Next Door, found that the difference between real millionaires and the average person was in their spending habits.
Stanley’s 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 all millionaires are PAW, and 95 percent of the population are UAW.
Stanley’s study examined the habits of millionaires, which 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 earn…
- 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 to look like millionaires.
This is in stark contrast to what wealth builders do.
Wealth builders avoid spending money on symbols of wealth because they know that true wealth comes from having a healthy bank account.
Ultimately, accumulating wealth boils down to spending less than you earn and growing richer daily.
My experience with building shows that it’s not easy to avoid the impulse to spend money mone.y
Why? Our brain is wired in a way that links spending with pleasure.
You have been conditioned so 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 can 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 with 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, recommends regularly monitoring one’s net worth.
Here’s how Masterson suggests 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 do what it takes to make your net worth more significant than it was before
Masterson describes this exercise as the financial equivalent of a diet pill because it helps people stay 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, persisting in practicing this habit will inspire you to think differently about building wealth.
You will see that many of your spending habits are financially unhealthy.
The secret to changing your spending habits to that of a wealth builder…
Do you use the lessons from calculating your net worth to commit to growing richer daily?
When I started calculating my net worth regularly, it changed my life and helped increase my net worth.
Although
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 three action steps you can use to develop a wealth-builder mindset:
- Start the habit of calculating your net worth monthly.
- Each time you calculate your net worth, make a promise to yourself that you’ll do what it takes to make your net worth more considerable than before
- Make it a habit to ask yourself, whenever you feel the urge to spend, “Will spending money now make me richer in the future?”
Before you start my three-step action plan, here is a warning: don’t do this in front of anyone or talk about it to anyone; you don’t want to be discouraged.
The more you practice this habit, the more 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 that you are automatically spending less than you earn.
At that point, you’ll know you have a wealth builder’s mindset.