Improving your finances is probably one of your lifelong goals. You are not alone. We all strive to get rich. We all want to be considered not just successful, but financially successful. It might sound materialistic but that is just how our society is built. In order for us to survive, we need to buy what we need to consume. That is one of the reasons why we are all driven to make our personal wealth grow.
While there are many ways that you can define yourself as successful, your finances will always be one of the indications that you truly are one. Some people may argue that the most important things in life cannot be bought. That is true. But to make these important things even better requires you to build up your wealth. Your family is important but you need the money to feed and provide for all their needs. Your health is important but money is also required to help you maintain it.
This is the reason why improving your finances will always be a goal in your life.
According to an article published on CNBC.com, becoming rich should not be too difficult to do. In fact, in 2014, there were 500,000 new millionaires in the country. This is caused by the stock markets and real estate. Both are increasing in value. So people who have invested in them have suddenly found that their net worth have made them millionaires. This brings the total number to 10.1 million millionaires.
3 mindsets that keeps you from getting rich
Some people may feel like the economic recovery is something that only the top 1% enjoy. After all, we are always reading about the wealth gap and how only a few people are really enjoying this recovery. Well believe it or not, there are people who are not part of the 1% but are actually quite rich. You may not be aware of it but your neighbor may be one of these millionaires. You see, these people are those who live in ordinary looking homes. They do not live in mansions. They drive the typical sedans and not fancy cars. They go on vacations but they do not splurge on exclusive resorts.
You need to understand that the new millionaires are people you never expected to be one. They are simple folks. You probably shop with them in the grocery, marvelling at how patient they are in selecting the right products that will give them the best value for their money.
You see, if you are serious about wealth building, you need to stop looking at the figures in your account. You need to start looking at yourself. Improving your finances is something that is rooted in your mindset. What you believe in will motivate you to act in such a way that will make you rich. At the same time, your mindset can also keep you from becoming rich.
Here are three harmful mindsets that could be keeping you from improving your finances.
I don’t have time to analyze my finances today.
If you think you do not have the time to work on your finances, you need to find time. In order to improve your financial situation, you need to know where you currently stand. That means you need to sit down, take a pen, paper (or your laptop) and a calculator and figure out your current financial position. How much money do you have in the bank? How much do you spend? Is there a way that you can increase your disposable income so you can save or invest them? You need to know these things. If you feel that you are too busy to analyze your finances, then wealth will really elude you. Getting rich is something that you need to plan. Otherwise, you will just be going in circles and living from paycheck to paycheck. This will not make you rich.
I can always start working on my financial goals tomorrow.
Another mindset that could be keeping you from improving your finances is procrastination. This is a mistake that a lot of people are committing. For instance, young adults usually postpone their retirement savings because they are confident that they have more than enough time to work on it. We keep putting off our financial goals because we feel that we can do it tomorrow. Well if you really want to get rich, you need to develop a sense of urgency. If you can do something now, you need to work on it as soon as you can. Do not waste time. The earlier you start working on your goals, the earlier you can reap the rewards.
I have lost all hope that I will ever become rich.
This is probably the saddest mindset of the three. Back in 2009, just after the Great Recession, Bankrate reported that 7 out of 10 Americans believe that it is getting harder to become rich. Back in 1999, only 38% said that it was hard to get rich. Now, people seem to have lost all confidence that they will ever become rich. The truth is, the economy might not be as you expect it to be, but it is still possible for you to improve your financial position. Some people look at their income and shake their heads in defeat. Well here’s the truth – your income should never dictate your ability to invest. Did you know that one man became a millionaire despite being a janitor and maintenance worker all his life? His friends were surprised to find out that we was a millionaire! So regardless if you are earning the minimum wage or your career seems to be getting nowhere, the key to improving your finances is how you decide to spend your money. So do not lose hope. You can get rich regardless of your current financial situation.
What does it mean to be rich?
Being rich is all about how you react when it comes to your money.
But what is the definition of being rich? Bankrate conducted a survey that revealed what Americans thought about being wealthy. They posed three questions.
How do you define rich?
33% said that you are considered to be rich if you have just enough money that you do not worry about it anymore. 26% said that you are rich if you have enough funds that you do not need to work any more. 17% said that if you have a net worth of $1 million or more, then you are rich. Other answers said that you are rich if you have a 6 figure income or if you have big possessions like a house, car, or boat.
What is the most likely way for someone to get rich?
20% of the respondents said that you can get rich if you start your own business. Close to that, 19% of them said that if you have a high-paying job or career, that can also help make you rich. Some said that getting an inheritance or winning the lottery will help make them rich. Some people actually have it right – you can get rich if you live frugally and invest your money in stocks, bonds and real estate.
What motivates you the most to obtain prosperity?
41% of those who want to become rich is to provide a better life for their children’s future. 18% said that they want to do it in order to take care of their parents and other members of their family. There are also those who said that they are improving their finances because they want to pay off debt, be able to enjoy material possessions and leisure activities, retire early and to have prosperity.
These questions were given by 18 year old and above consumers back in 2009. Do you think you can identify yourself with the majority?
How do financially successful people think?
When you are improving your finances, you need to look into how successful people think. There are certain traits that you need to learn from the super rich. Believe it or not, their traits are not difficult to emulate. Most of them involves changing certain mindsets. When you change how you think, your actions will naturally follow through.
Tom Corley, a noted writer of Credit revealed his findings about self-made millionaires. In his Rich Habits Study, he said that these millionaires have different thinking habits. His research revealed that how you think is fundamental to improving your finances. Here are important notes about the thinking habits of these self-made millionaires.
- Career. Focus on what you are good at and increase your personal value, skills and knowledge to make more money.
- Finances. Focus on how they spend their money and if they are putting enough aside for their future and that of their family.
- Family. Focus on spending quality time and building better relationships and memories with them.
- Friends. Focus on who their friends are and the quality of the friendship.
- Business relationships. Focus on building and improving business relationships and figuring out which ones should be eliminated.
- Health. Focus on pursuing a healthy lifestyle (eating, exercising, etc).
- Dream-setting and goal-setting. Focus on having dreams and goals and how these can be reached.
- Problems. Focus on finding solutions to what makes their current situation difficult and stressful (oftentimes related to their career).
- Charity. Focus on giving back to the community and making a difference even in their local neighborhood.
- Happiness. Focus not just on their happiness but even those around them.
The author mentioned that these people may seem to think a lot but the quality of what is on their mind is very important. If you are improving your finances, you may want to concentrate on these thoughts too.