Everyone wants to be wealthy or obtain financial freedom. However, nothing ventured is nothing gained. To obtain financial freedom certain actions must be done. These include building an emergency fund, maintaining excellent credit, investing, and developing multiple streams of income. This is all after the fact because just as Chinese philosopher Lao Tzu said, “a journey of a thousand miles begins with a single step.” You must change your mindset on money to reach financial freedom or independence. There are 3 mindset shifts that you can do today to help you reach that goal wherever you are today in the world or your financial journey.
- Shift from a consumer-focused mind to a producer-focused mind
Learn to budget and take account of your cash inflows (Income) and outflows (expenses). The rich get richer because they look to control their cash flow and seek to find ways to produce a product or service that they can generate more income. Rather than buying the latest fad, they seek to create things and obtain income-producing assets. This includes investing in dividend stocks, investing in real estate, or building a business. Start with what you know and seek to create something simple whether it is a podcast, an online business, or freelancing to generate more income. We are taught very early on in society about spending and consuming, but we aren’t taught very well how to save, how much to save, and what’s an emergency fund. Consuming only will not aid in wealth creation and won’t help reach financial freedom. Learning to do things like delayed gratification, money management, and getting on the revenue side of the transaction will aid in teaching to value production even more than consumption. Remember, your net worth equals Assets minus liabilities.
- The shift from an Employee Mindset to an Entrepreneur mindset
Robert Kiyosaki, the author of one of the most iconic books on wealth building, Rich Dad Poor Dad, lays out why an entrepreneurial mindset will propel you further into reaching financial freedom. In his blog titled Three Contrasts Between the Entrepreneur and Employee Mindset Robert dives into what separates an employer/entrepreneur and employee. When you become entrepreneurial you will learn to value results over time, you learn to accept and take on calculated risks, become more generous, and take ownership rather than take from ownership. A great excerpt from the article was:
One of the things I love about successful entrepreneurs is that they put their businesses first. If the business is struggling or not making money, they don’t make money and they are responsible for fixing it. They have to take ownership. This is both at the high-income level and the struggling owner level. One friend I know often skipped his salary to pay his staff when he was first starting his company. He was making $6,000 a month at the time when he got paid, and he had a young family to take care of and feed. Yet, he sacrificed his comfort for his employees. Today, he’s very successful.
- The more you learn the more you earn
Warren Buffet the sage of Omaha is famous for this quote. Always seeking to learn new concepts, ideas, and about the world around you will aid you in becoming more prosperous. Whether in learning how to play an instrument, cooking, astrophysics, and so on. Despite this, learning will only be effective if you apply it in your life. The knowledge you learn can come from academia or outside of school, but usually those we look up to like Elon Musk, Bill Gates, Warren Buffet, and so on learned on the job or in alternative ways. Become a curious experimenter so that your life will be richer not only in the sense of financial freedom but in other areas of life holistically. In the book Richer, Wiser, Happier William Green interviews some of the world’s best equity investors of the past 100 years and delves deep into their lives. You will learn about their upbringing, habits, philosophies, and cultures that made them who they are. One thing they all had in common was a pang of hunger and passion to learn and to think outside of the box beyond what was socially acceptable or against the grain. Develop the habit of curiosity and you will earn more. Another resource I would love to share is a YouTube Video well worth the watch by the Institute of Trading called 10 Secrets to Achieve Financial Success.
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