finance

Rich vs Poor Mindset

4 Mins read

For most people being rich or being poor starts with a mindset. Where you begin in life is based on luck, where you eventually end up is primarily based on your thoughts, beliefs, and mindset. How your circumstances, relationships, and finances trend are due to your actions and the root of most actions are based on how you think. Let’s explore the different mindsets of growing wealth and struggling with personal finances.

What is the mindset of the wealthy?

Ramsey Solutions conducted a survey of over 10,000 millionaires, and it found that 79% of respondents didn’t receive any inheritance. The one in three Americans who do get an inheritance blow it. [1] Whether they win $500 million or $1 million, about 70% of lottery winners lose or spend all that money in five years or less. [2]

This shows the difference in mindset as there are many people born into humble situations that go on to build wealth and wealthy children that go on to squander their opportunities and end up broke. Where ever you are in life your mindset can redirect a new path.

The wealthy mindset thinks in terms or creating, building, and compounding their assets. Most millionaires own their own business, created a business with partners, or have a high income that they convert regularly to assets like a stock portfolio or real estate. Millionaires create more than they consume, they love their work more than they love vacations and buying things. Their business is their game. Sometimes their main hobby is building wealth by managing their personal finances, investment portfolio, real estate holdings, business, or cash flowing assets.

The wealthy think in terms of return on capital and risk versus reward. They are good at seeing the math in business and investing and the magic of compounded growth whether in a business or their portfolio. The typical rich mindset is one of creating products, services, investments, businesses, and jobs for others. They are the creators that make their ideas reality and create value for others. They get paid well for this process.

Habits of the poor mindset

A person can have opportunities all around them but have a poverty mindset. Negativity, victimhood, jealousy, and closed mindedness are the primary indicators of a poor mindset regardless of outer circumstances.

Here are ten bad habits to stop to replace a poor mindset with more positive one.

The poor mindset sees lack instead of abundance. They see money as a static fixed pie and everyone can only get a set amount, they think if someone is rich they stole it from someone else. They never consider that the money pie itself grows and opportunities multiply as technology advances. They have a scarcity mindset.

They can at times make themselves feel better by thinking that the situation they were born into is their lot in life. That since their circumstances are their destiny they don’t try to change for the better they go with the flow of their current life.

They believe money is bad and they don’t want it as it would make them bad. Money is neutral, you can earn it by creating value and you can use it for good like charities and gifts. Poverty is solved through money.

They believe making money is hard as they only associate it with selling their time and working for a paycheck. Working a job is only one of many ways to make money. 

They have the instinct only to get money and then spend it, they don’t have the skills or foresight to save and invest their money.

They think having money is not spiritual. It is not money but the love of money that is the root of all evil. Love what money can do but not the money itself it is only a tool and for keeping score.

People with a poor mindset have never educated their self in personal finance, the financial markets, or investing.

A poor mindset is jealous of the rich instead of wanting to learn from them and be like them.

A poor mindset works only for money and not to learn or create a career or business.

Someone with a poor mindset has no budget, no investment portfolio, and no financial plans for the future.

How can I become rich mentally?

Here are a dozen things you can start to believe and do that will grow your mental wealth and change your mindset.

  • Value your own time, money, and energy. Don’t waste any of these or let others waste them.
  • Understand earned income should be converted to capital for investing and trading for assets.
  • Spend the majority of your time creating value for others, not consuming products.
  • Focus on buying assets with positive cash flow not buying consumer goods that are depreciating assets.
  • Learn to create, buy, or sell cash flowing assets.
  • Follow your passion and work energy. Do what you love, gamify your success.
  • Focus on expanding and growing your strengths, grow your edge and manage your weaknesses.
  • Write down your short and long term goals in every area of your life.
  • Create systems to take you closer to those goals daily.
  • Develop faith in yourself and your vision then do the research and the work.
  • Believe if someone else did something you can do it to.
  • Believe setbacks are only temporary as you look for another path.

Wealth creation starts with your thoughts and builds through working smart and hard for a long enough time to reach your vision.

Source:Steve Burns | newtraderu.com

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