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Build Wealth: Choosing your Path to Wealth and Happiness (part 2)
This is a two part article on the basics of wealth building. You can read the first part here.
The Right Mindset for Building Wealth
Working on improving your thoughts and mindset will prove to be your most valuable investment when your focus is to build wealth.
There is absolutely nothing more disempowering than having the beliefs in your mind that you cannot do it, that this is something somebody else achieves not you. Unfortunately the problem with this is that you don’t realize these are the thoughts that are keeping you behind. Since they have been in your mind for a long time they pretty much become normal, they shape the way you see the world.
Thoughts like “I cannot achieve wealth and happiness, that is for rich people”, or “I don’t earn a high income how can I possibly become wealthy?”, “I can’t balance my checkbook how on earth am I going to accumulate wealth”, “I’m living paycheck to paycheck”, etc.
There are several reasons for this line of thinking that keeps you disempowered. You are influenced by those around you on a daily basis. You are also affected by what kind of input is going into your mind every day (TV, radio, general media). Additionally, how you were raised and the images that shaped your character as you were growing up are a powerful source of conditioning.
I have been affected by all of these. On the positive side I had the example of a father that taught me the value of saving, investing and wise use of your money. While at the same time having other family influences of valuing material goods as status symbols and things to live for.
Television is also a powerful and negative source of conditioning. TV tries very hard to make us think that we need all that stuff that they advertise and even the characters and lives portrayed on TV have these kinds of values. That it is Ok to live in a certain way and do certain things because it’s what everybody else does.
If you consider the amount of time you spend watching TV then you quickly realize that’s a major window of opportunity you are allowing for the wrong mindset to set in. This kind of conditioning will not help you when trying to build wealth.
I found that the number one tool to create the right mindset for building wealth is education. When you choose what you want to go into your mind then you are in the driver’s seat. By getting the knowledge and education you need so you can learn what you need to do in order to achieve what you want, then your mind and beliefs begin to change.
The great thing about this is that the education you need to build wealth is so widely and easily available so long as you choose to take time away from those activities in your life that don’t add any value and put it into those that do.
The library, bookstores, internet, private seminars, networking groups, podcasts and so on, these are all great education resources available to anyone. There really is no excuse as long as there is a genuine desire.
I learned this when I was beginning real estate investing. For a decade or more I thought stock market investing was my only choice to build wealth. But seeing that I wasn’t making the progress I wanted in order to reach my goals I wondered how I could increase my efforts to build wealth.
For a long time I thought that beginning real estate investing was too hard, or required a lot of money and you had to know a lot. The only thing that changed this line of thinking was education. The more education I sought the easier it was for me to see and BELIEVE that I could do this. And as I shared this knowledge with my wife we both became believers.
Little did I know at that time that real estate would change my life and after a major career changehouse flipping and real estate investing would become a full time pursuit and my main source to build wealth.
Education allowed us to gain knowledge which changed our beliefs. Once we believed we could do it then we started planning on how to do it and then we took action. Our actions brought us results. But it all started with the right mindset.
Building Wealth Through Goals, Plans, Focus and ACTION
Each one of these four concepts requires its own article but I want to let you see how they fall into the big picture. Everybody knows what these are, that they are important and that they should have them. But, there is a reason why 90% of the wealth in this country is allocated to 10% of the population and I bet you the execution of these four concepts has something to do with it.
In his excellent book, The 7 Habits of Highly Effective People, Stephen Covey in habit number two discusses the concept of beginning with the end in mind. Putting it simply is about forming a picture of where you want to go or where you want to end and then working backwards from that. So ask yourself, what do you want to achieve?
It is crucial that you are able to find the answer to this question when seeking to build wealth. Do you want to have a net worth of one million, two million, seven hundred thousand?... Do you want to own your home free and clear?... If so, what type of home and by when?... Do you want to own a dividend paying portfolio and have xxx amount of dollars in a cash account or do you want to have 10 income producing properties that are paid for, or both?... When you say you want to be healthy what does that mean?... What kind of relationships do you want to have and with who? – The options are endless.
The point is that the future you want to create can have a 1,000 different forms but the important part is that you define it. That you figure out what that future is going to look like for you from a wealth building perspective.
Once you create this big picture now you have something from where you can set goals and that you can plan on achieving and working towards. Defining what you want can range in difficulty from straightforward to grueling.
For me it was very hard. For the longest time I couldn’t figure out how to put into words what I wanted to be, do and have. So that became a goal in itself; to work diligently until I could find an answer I could put into words and create a mental picture of it.
In closing, let me put things in perspective. Did you know that if you have a net worth of $250,000 that makes you wealthier than 80% of the American population? And if you bump that up to $500,000 now you are wealthier than 92% of the population!
Most of us have this image of wealth as living in mansions, country clubs and expensive cars but real financial wealth is a different picture. There is no one way to achieve it and it sure as heck is not easy. But it is absolutely possible, achievable and realistic with the right mindset and actions. Remember, it’s your life, you have a choice, what are you going to choose?
• Define what wealth means to you and why you want to build wealth. You choose, it only has the meaning and importance that you give it. All other actions will flow from here.
• Start creating the right mindset today. Take responsibility of what goes in your head and make the choices that are going to empower you. Visit our library section (coming soon) and start there. There is a slew of financial literature out there but some of them are actually worth reading. Start with The Millionaire Next Door by Thomas J. Stanley, so you can get a picture of what real financial wealth is versus what is typically portrayed on TV. Seek educational and learning opportunities in the many ways that they come; books, audiotapes, CD’s, the library, seminars, clubs, etc.
• Begin with the end in mind. Give it a try and write down the vision for your future whether it be your life as a whole or your plans to build wealth. If nothing comes out, you got work to do. Ask, search, research, dig deep into yourself, ask friends and family, your spouse - but start forming your picture for wealth and happiness today.
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