Today's blog post was inspired by the book “The Millionaire Mind” by Thomas J. Stanley, Ph.D. This book is the second installment of his three book series. About a two years ago I picked up this book from my local thrift store. This book was the third financial book I have ever read and it changed my thoughts on how to make money. I remember my dad always saying “Elaine, I want you to work smarter not harder.” The first time he said that to me I didn't know what he meant, but over time I started to observe others around me and after reading more financial books I learned about what he meant.
I honestly didn't think there was a difference between the mindset of the middle class and the upper class. I just thought that some people either inherited money or they choose a career that would make them a lot of money. These situations do happen in real life but there is another factor involved.
The Middle-class mindset overall has three main ways of thinking:
Seek job security through a profession (from a good education)Working hard for their money Planning for the next paycheck.
The Rich mindset has three main ways of thinking:
Building a business Investing in good financial education
Planning to invest their money
*making their money work for them
These are just some of the differences in the way people think of these categories. Over the years I have analyzed some of my friends, co-workers and extended family. I have noticed various differences in the way they think money can be acquired. It's no secret that the wealth gap between the middle class and the super-rich is getting wider and wider. The top 1 percent of the country holds all the wealth and power. With that being said, there are many reasons why someone wants to be rich. I'm pretty sure sometime throughout your life you heard of some “Get Rich Quick” scheme to become wealthy. You hear about how people come up with an idea or product and they get rich. You hear about people tapping into the real estate market and become a multimillionaire. And of course the usual getting onto a reality TV show and become famous. And lastly but definitely not the least someone wants to be an actress/actor, recording artist or an athlete. But no one is telling you how the rich keep getting richer. Clearly, they know something you don't. People will talk about it, complain about it, but won't tell you why and how the rich keep getting richer.
First, I'm going to tell how. If you ever decided to google someone who is in the entertainment business, you click on the first link and it gives you a description of that person and what they do. Pay attention to what they do. You will notice that the person has multiple occupations. For instance, P. Diddy has multiple occupations that provide him with multiple streams of income.
picture of p diddy
The key is to have multiple streams of income. You have seen plenty of your favorite celebrities in TV commercials and they get paid to do those things. The purpose of having multiple streams of income is so that you won't have to rely on one way to make your money. Haven’t you heard the saying “Don't put all your eggs in one basket”? This is the same concept, do not solely rely on your profession to get you financial freedom. People lose their jobs all the time, people quit their jobs all the time, but you will always have to pay bills.
Now I'm going to tell you why the rich keep getting richer. The rich keep getting richer because they have a different way of thinking. There comes a point in time when you get tired of working hard for your money. Instead, how about you have your money work hard for you! One of the most common ways to have your money work for you is investing in real estate. For instance, if you decide to buy a house one day, instead of selling it why don't you rent it out to a family, or some college students. Or register the house on Airbnb and make money off of people who need a place to stay for a short period of time. Get back some of the money you put into it and turn that house from just an asset to a stream of income. Real estate isn't the only way of making your money work for you but it's a place to start. And even if you don't own a home, you can do this with a condo or a townhouse.
Another reason why the rich acquire more wealth is that they invest in good financial education. Even if they don't invest in financial education they will invest in some type of specialized secondary education so that they can learn new skills. The phrase “Knowledge is power.” is something you should keep in mind. When I say education, I don't just mean academic education like getting a Masters or Ph.D. degree. Education can come in any form such as learning how to trade stocks in the stock market. The point is to make it a goal to learn something that will help enhance your future financial security.
Lastly, the rich make it a priority to invest their money in new endeavors and save for retirement. Investing your money in new businesses creates more streams of income. And saving up for retirement is honestly common sense. If the middle-class is living paycheck to paycheck and the cost of living is steadily increasing; how are you saving up for retirement?
If you have learned absolutely nothing from me thus far please remember this: the first step is changing your mindset to believe you will be wealthy and making your financial freedom a priority.
Anyway shine bright my beautiful gems!
Thank you all for reading and the support! All feedback is welcome! Please comment and share with your friends and family!