Having a mindset around money is extremely important. While money cannot buy you happiness, learning how to create long-term wealth can certainly improve our lives and allow us to bring positive change to the world.
We are going to talk about the mindsets around money and how important it is in creating long-term wealth. We will split this topic into four main sections: 1) the mindset that is created by a lack of financial literacy, 2) the mindset around earning money, 3) the mindset around investing money, and 4) the mindset around staying consistent with your long-term goals. So, let’s start talking about money!
Mindset #1 Money Is NOT Evil
We’ve all heard this saying before, “money is the root of all evil”, but is it? There’s a huge block on a lot of people’s minds when it comes to earning and investing money, which prevent them from even trying or giving it a go. And, today, I want to remove that mental blockage for you, so you can be on the path of prosperity.
I’m not sure about you, but the friends and family I grew up with never really spoke about money. The mindset was that it shouldn’t be spoken about. I find that quite funny because we are all looking for a raise or jobs with higher pay, so we all want more money, but we’re not allowed to talk about it.
But I think money should be spoken around the table, and this was actually discussed in the book, Rich Dad Poor Dad.
In his top-selling book, Robert Kiyosaki spoke about how his rich dad endorsed talking about money at the dining table, whereas the poor dad said that this is not an ethical thing to do. So, the rich dad became wealthy because he was open to talking about money, whereby the poor dad shunned the idea of talking about money and remained poor.
In order to create wealth, we need to facilitate conversation about financial literacy. We need to create a more positive mindset around money because, ultimately, it’s not money that is evil, it’s what you do with money. It’s your intentions that determines whether you are going down a good path or a bad path.
Money in itself is not evil, and people really need to get over these blockers in order to create wealth. By creating wealth, you can then have more to share with the world. The more money we have, the more change we can potentially create, the more impact we can have on the world.
No, Money Can’t Actually Make You Happy
Now, just to clarify, my belief is that the complete love of money is not healthy, and I don’t agree with people who rely on money to make them happy. I believe that you need to find happiness within yourself because money can often amplify the state of mind that you are already in.
If you find yourself sad and depressed before you have money, then you’re likely to become more depressed when you create wealth – you see that with all these celebrities and athletes. They are depressed, even though they have a lot of money, and you wonder why. This is because they haven’t found true happiness before they actually created the wealth.
The least-travelled journey is often the internal journey – going within and discovering who you are. Happiness starts from within. And happiness should really be shared with others, not found in others, whether that’s another human being or an object like money or cars.
When you find happiness within yourself, then you will be happier as you create more wealth along the way, and share that in a more positive way going forward.
We live in the information age now where you go online and there is an abundance amount of information available. Unfortunately, financial literacy isn’t high on the agenda of the schooling system. And so, when we’ve reached adulthood, when we’re out in the big, bad world, we then gravitate towards the internet to start looking for answers.
And this is really where the challenges start arising, particularly when you come from a foundation that lacks financial literacy. What’s good information? Who is genuine and who isn’t? Where are the traps? Who can I trust?
The trap to fall into. of course, is the get-rich-quick schemes. A lot of money and time is then wasted on them. At the end of the day, creating long-term wealth is not sold as a sexy way of making money. It is, however, the correct way of making money. It is the best way to make money, particularly when you embrace compounding.
Okay, now, let’s say your mindset is changing and you have become more open to talking about money. This is when more obstacles and doubts will arise and try to deter you away from creating wealth for yourself and your family. What do I mean? Let’s talk them through.
The first question that might come to mind would be, how can I create wealth? If you’ve grown up in an environment where wealth hasn’t been taught to you, where do you actually look?
Most people will search for answers on the internet – and I think, yes, we can find information and ideas in a split second and it’s a lot simpler to find routes to wealth nowadays, but on the other hand, misinformation is spread so much more quickly as well and this leads to a lot of unfortunate situations.
Once you’ve done your research, the next question then might be: how do I know who to trust? How do I know which method works and which doesn’t? Since there is so much information out there, the main thing you’ll have to do now is to trial and test them. Check the reviews, do your due diligence.
And that’s not it. Many other mental hurdles will appear. Doubts like these may arise (and I’m sure a lot of you can relate to this): do I actually deserve to be rich? Would it actually work for me? Or does it only work for those who are “born to be rich”? It’s been months or even years now, but nothing’s happening… should I give up?
These are the challenges most entrepreneurs or wealth-seekers will have to face. Family and friends are no help either because, a lot of them will tell you that you’re wasting time. They will ask you to just go and find a regular job, and stop wasting time on these courses and seminars. If you are seeking wealth, it’s important to keep a strong mindset so that you are able to overcome these obstacles.
Mindset #2 Don’t Feel Bad About Wanting More Money
Now I wanted to start by saying that the only person that you need to compare yourself to is the person staring back at you in the mirror. An appreciation of what you have in life is a huge part to success.
Look at where you came from, where you are right now, and where you want to be in the future.
Everyone has their own story. Yes, it is natural to look at what others and feel envy. But if you can use it as motivation and put the right processing in place, the good times will come.
Focus on your own personal journey, appreciate what you already have, and that will make your journey to wealth creation a lot more positive and enjoyable.
When you compare yourself to someone else, you’re already limiting yourself. Because you never know your limits – you could be 10 times greater than that person you are comparing to.
So, always focus on growing and becoming a better you. And a year down the line – or even five years down the line – you can look back and say, okay, I’ve actually become a better person.
Don’t forget, we live in a social media world. A lot of people are portraying a lifestyle that they may not necessarily be able to afford. There’s a lot of people out there who are totally living beyond their means, which, as we know, is a fact.
The next time you feel jealous towards that person who’s driving a race car down the road, remember, you have no idea what that person’s lifestyle is like. They could be massively in debt. Focus on yourself, you can use the wider world as potential motivation, but always stay on track with your own personal goal.
This brings me to my next (very important) point: don’t feel bad about wanting to earn more money.
Money can be in relation to how much you help people, particularly if you have a skill that’s in demand. The more people you help, the more money will flow, right? So, that’s not a bad thing. So, if you are earning a lot of money and people are happier as a result of your work, your help and your skill, then you’re doing something good for society.
Therefore, wanting to earn more is nothing to be ashamed of. In fact, we feel like more and more people should be encouraged to do this.
Money is just a transfer of energy. When you’re transferring your skills or your knowledge for money to help a situation, there’s absolutely nothing wrong with that. Some jobs demand more money than others, that’s unfortunately just the way it is. But at the end of the day, it’s what you do with the money that counts.
People view money as evil – that’s fine, you can’t change people’s views. But you can, of course, change your own view. People can make their own choices. If people have a view that money is evil, it really puts them at a disadvantage to create wealth, and then a knock on effect of creating an impact in the world.
Budgeting vs Emotional Spending
Once you have some money flowing in, the next thing you need to do is learning how to create a budget. When you create budgets, there are sacrifices along the way, these could be giving up luxury such as your satellite subscriptions, stop getting fast food or takeaways, or fewer nights out during the week.
Budgeting is essential for the bigger picture. A budget creates an essential foundation which is needed if you want to change your financial situation for the better. It gives your hard-earned money a direction and ultimately, it gives you a bigger pot to invest and create wealth.
To be able to consistently grow your money, you’ve got to have a pot of money in the first place to invest and to be savvy with.
This now leads into the next point: curb the emotional spending. Don’t eat into your savings by allowing emotions to get in your way. Life always throws challenges at you and might get tough at times, and often we might want to do a shopping spree just to make ourselves feel good.
But I strongly advise you to find another distraction.
There are many more healthier options such as going to the gym, taking up boxing, or going for long walks. There are truly other ways to distract yourself and ease the pain.
We live in this consumer culture where buying and spending is just the norm. It really takes a lot to be different to the people you are potentially surrounded by. It takes a lot of mental strength to actually say no.
So, next time you feel like you’re going to reach into your wallet and buy something at the shop or online, ask yourself: do I really need this? Having an accountability buddy is also a great way to stop you from emotional spending. Call them, speak to them, get feedback from them, and listen to them.
Train Your Mind
If your mind is loaded with money blockers, then it’s time to learn to change your internal monologue about money. Sentences like: “I will never be able to afford that” or “I can’t do it” may be more damaging than you think.
Having these negative thoughts internally can end up having a negative long-term impact on wealth creation. If you cannot afford something right now, that’s fine, just let it be, forget it and move on. Focus on what you have achieved and what you can afford, because you will be able to afford whatever you want further down the line.
Through good investing and being smart with your money, nothing is off limits! It may take you longer to get there than other people, but nothing is off limits when you know how to invest your money.
Now, I’m not an expert at this, but I’ve read a little bit about the so-called EFT technique, or the emotional freedom technique. Emotional freedom technique is a method to reduce anxiety, stress, and depression. It involves tapping specific points on the body, primarily on the head and the face.
So, if you want some technique to help you break your thought patterns, look into EFT. It is an excellent way to change your thought patterns from negative to positive, from a mindset of scarcity to a mindset of abundance.
Another way of making your internal monologue more positive is by taking action. Our thoughts can be our worst own enemy. Our thoughts can often be the primary reason why we are not taking action and why we don’t progress.
If your internal monologue is telling you that “you can’t do it” or “it’s all a waste of time”, you will never take that first step.
Your mind is a muscle. It’s like your body. You have to train your mind to have the right thoughts by incorporating the right exercises, just like the way you hit the gym to train your body. And remember, only you can change your thoughts, only you can train your mind.
Mindset #3 Investing Is A Lifestyle, Not A Fad
The first step in generating wealth is to learn how to invest, whether that’s in property or the financial markets, becoming an entrepreneur, starting your own business, or investing in finance courses.
At the start of my investing journey, many hurdles were thrown at me, and one of them was the fact that it was very difficult to pick the right (legit) course to learn how to invest.
I attended two courses, but neither of them actually helped me to create wealth. I was doing a nine-to-five job – now, nothing wrong with that. If you have a job you really enjoy then you should stick with it. But I wanted to create an additional wealth for my family and I.
So, when those two courses didn’t work for me, it made me feel like I was moving further away from my goals. On top of that, I didn’t have the money upfront to pay for the third course. I was deflated.
But I didn’t give up. I worked hard and saved up for that, and eventually, I attended that course, which turned out to be the one that proved to be the most beneficial.
I think one of the main challenges in this information age is to find credible educators. The internet is loaded with quack educators who are allowed to massively over-promise and under-deliver.
This is a real issue because, when there is a lack of financial literacy, then it’s very easy to buy into courses like these. And when these courses don’t deliver and make you feel like you are being cheated, it can have a serious impact on your mindset around investing.
By the way, these courses I am talking about are not cheap. The real big courses are going to be quite expensive. You can try the “cheaper” ones but they are likely not going to be beneficial. So, the first hurdle might be not having enough money upfront for these courses, and the next hurdle is to figure out which ones to choose because you really don’t want to wasting money on the wrong courses.
This brings me to my next point: there has to be a level of accountability as well. If you see a course that clearly doesn’t sound credible, or is focusing on how to “get rich quick”, or it’s just too good to be true, yet you still buy into it, then you have to be accountable for the choices you make.
Be accountable for your decisions. If you made bad decisions, be accountable for them, learn from them, and prevent making the same mistakes in the future.
I used to pay monthly fees for these courses, and it was eating into my profit from the markets. So, for a period of time, no money was actually being made. But I had the vision that I was going to create wealth through investing long-term. And that’s what kept me going.
Even though I was losing money, I kept going. It’s like having a business. If your business is making losses, as long as you have a vision that this is going to work, then it’s only a matter of time before you actually see success.
If you ever have doubts about yourself, ask yourself this: if someone out there (or someone you know) can do it, then why can’t I? What makes them so special? If you can’t answer that question, then that means that you are able to do what they’re able to do too.
Just keep going and as time goes by, we all become better in what we do. As long as you keep a strong vision of what you want to achieve, it will come true.
Yes, there are many horror stories out there, but look into them and figure out why. Often, it is because people fell into the hype or turned greedy.
Do your research. There is good as well as bad information out there, but don’t let the bad ones put you off. Seek out the information that helps you invest safely over the long-term between now and your retirement. And to be fair guys, I know it’s tough to find the right information, but if you’re reading this, you are on the right track!
You Don’t Have To Be An Entrepreneur To Start Investing
Not everyone wants to be an entrepreneur. We don’t all have the entrepreneurial spirit in us. Some of us just want to have a good job, earn good money, and then have the ability to save substantial amounts of money. However, it is by investing your savings that you can generate growth.
The mindset around investing should be as simple as this: “make money, save money, and invest that money”. No tricks, no theories. We just want to do learn how to do it as safely as possible.
We want to accumulate a pot of money and then invest, because there is no better way for us to generate substantial wealth from the comfort of our home and with no other players involved.
If you go down the route of property, there are lots of other players involved. With the financial markets, the only players involved will only be the software, brokers that you have to open up accounts with, the markets and you.
Mindset #4 Be Consistent With Your Long-Term Investing Goals
One of the most important traits or characteristics that you must have if you are to achieve your long-term goals is resilience.
Good investing is definitely not a get-rich-quick scheme, although there are a lot of so-called trading educators out there who might promise you that. What you need to embrace is long-term investment strategies.
We can actually speed this up through what we call compound growth. This is how credit card companies or loan companies create their wealth. Let’s say you pay a minimum amount every month, they then add on an extra bit of interest and that’s how your debt spirals out of control.
The good news is, we can actually use this in our favour. We can create vast amounts of wealth through the technique of compound interest. Compounding is the secret to wealth creation. To benefit from the power of compound growth, you have to play the long game.
Now, unfortunately, most people focus on the short-term investment and they just aren’t around long enough to really experience the impact of compound growth. But once you get beyond the third, fourth, or sixth year, you will really start to see the effect kicking in.
Remember, compound growth is not a straight-line growth, it’s exponential. So, once you start getting on that exponential curve, the returns are mind-boggling. It will completely change your whole mindset around the way to make money.
The 4 Cs
So, let’s remind ourselves of THE GOAL. We are going to take the liberty of setting the goal for you now because, truly, there’s only one goal as an investor: to make as much wealth as possible and as safely as possible.
We can do this with the four Cs: clarity, consistency, confidence, and composure.
When you have good financial literacy, you have clarity. When you have clarity, you then know how to apply your plan of action or your strategies with consistency. When you have consistency in your goals, you then have confidence. And when you have confidence, this will breed composure and calmness within you.
When you know you are doing the right things with your money, you’ve got the right processes in place, and you know that your future is being taken care of, you will get much more enjoyment out of life. You can go about your day-to-day life, do your hobbies, hanging out with your friends and your family with enjoyment and love. Ultimately, that is what life is about.
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