Have you ever wondered what it is that makes one person rich, and another living paycheck to paycheck? These seven ways to think rich are a great way to invite wealth into your life in 2014.
Unless you’re born into it, or pick a winning lotto ticket you need to set goals in order to become wealthy. The truly wealthy set goals to expand their holdings, invest, and realise income in a controlled and managed way – because they set themselves clear goals. It’s easier to focus on saving for that house deposit or putting aside money to buy shares if you have a crystal clear picture of the prize you really want in mind.
Hang onto things
It might seem peculiar, but the really truly wealthy – I’m not talking about the outwardly wealthy with expensive cars and up to their eyeballs in debt – but those self-made individuals with squillions to their name have a different sense of time when it comes to objects. Most Australian millionaires are the type who buy quality, but wear that favorite cashmere jumper or T-shirt till it’s threadbare and keep resoling a favorite pair of brogues – think Gerry Harvey. Objects are investments and the rich expect to get the best possible value out of them.
Recognise the potential of money
The rich don’t see a dollar as just one dollar, they see that dollar as a starting point that can become $100 over the course of a lifetime – they recognise the potential of that money and use it to apply discipline to their purchasing decisions. As American billionaire Warrant Buffet famously said “someone is sitting in the shade today because someone planted a tree a long time ago.” To Buffet, 30 years ago, the $5 in his pocket that he refused to spend on a sandwich and cup of coffee wasn’t worth just $5 it was the seed for the $500,000 he would earn, making it a very expensive snack.
Aren’t scared by fine print
In a way, fine print is a language barrier between the wealthy, and the poor. When it comes to making financial decisions the self-made wealthy demand to see the detail, they comb through the numbers with a fine tooth comb and if they find something they don’t like (or understand) pick up the phone and demand answers! By contrast most of us are put off or apathetic about fine print, they accept a knowledge gap, throw their hands up in the air and say it’s all too hard. Effectively letting the institution get away with financial murder – errors, fees, unattractive rates or returns that all matter in the long run to you becoming wealthier, or not.
Put a value on their time
Seriously rich individuals can tell you, in an instant, what an hour of their time is worth – when you value your time, you begin to evaluate your decisions through a completely different lens. Is working an hour of overtime worth it when you could be meeting with a financial planner to grow a share portfolio or spending a few minutes getting yourself a balance transfer credit card to save yourself hundreds on an outstanding credit card debt. Time is the most precious resource because once you spend it you can’t get it back so make sure you spend it wisely.
Spend less than you earn
It’s a basic concept, but spending less than you earn is the crux of all wealth building. Setting up a regular savings plan and siphoning away at least 10% of everything you earn to put exclusively towards investments, high interest savings and wealth building is a recipe for financial happiness.
Keep rich company
Wealthy people surround themselves with those who have the ability to think big and make things happen. Keeping rich company doesn’t mean exclusively befriending the wealthy people (although it may seem that way) they also keep their ear to the ground for new ideas, opportunities and perspectives. As the old saying goes, “Show me your friends and I will tell you who you are.”