The Size Of Your Bank Account Doesn’t Matter!
Most of us like to believe that a big windfall (winning the lottery, getting a huge raise, building a successful business…) will solve all our financial problems. It’s only logical after all, right? Wrong! Why? Because money is nothing more than a giant magnifying glass. Any problems you have with money only get bigger when you have more of it. Tens, even hundreds of millions of dollars can be wiped out if you never learned how money works in the first place (Mike Tyson or MC Hammer are prime examples, as well as past lottery winners who ended up poorer than before they won)
So, if you are going to implement top wealth creating habits in your life, you need to know that finishing rich isn’t hard, but it does require a substantial change in attitude towards money, as well as a bit of time and knowledge.
- Change your attitude towards money. First and foremost, the person who becomes wealthy has a different attitude about money than the person who doesn’t. For example, the motto of the wealthy is that “your money should work hard for you” while the poor and middle class live by “you should work hard for your money”. These are opposite beliefs - so, the rich keep looking for (and finding) ways to have their money work for them, while the poor and middle class keep looking for (and finding) ways to work harder for money. Opposite beliefs, opposite actions, and accordingly opposite results!
- Put in the required time. Whether you want to be rich or are already there, you have to make the time to either become rich or remain rich. Most people that are now “living the life” usually began taking the road to riches in their spare time. One plan, the most common, is to work at a low-risk, steady job until you have enough money to invest in something that will feed you for the rest of your life; another underestimated plan is to invest a predetermined amount of money every month for the rest of your life. In the same vein, no matter what investment you’re considering, you have to take time to evaluate it, which includes understanding the risks, having a contingency plan, and getting expert help to best make your decision. Somewhat time consuming, but very rewarding if you never lose sight of the big picture.
- Educate yourself. Unless you’re planning to lose your shirt (and then some), you have to educate yourself before you ever start investing. Although hands-on experience is the best teacher, another excellent way to educate is to listen to tapes and CDs and to read books on the subject of investing, managing your money, and creating extra income. Rags to riches stories will provide you with inspiration and uplift you, while how-to books will allow you to mentally map out your road to success. A word of caution: don’t hide behind educating yourself to justify never actually getting started. This is just the theory, and it’s nothing like practice. I read somewhere that “In theory, there’s no difference between theory and practice, but in practice, there is”. So true…
- Buy assets. After creating time to get rich, and educating yourself, you simply must buy assets that will create money for you, and not liabilities and toys such as a new car every other year, and boats. These come only after you’ve proven that you’re capable of handling and keeping money. Remember Robert Kiyosaki’s definitions of assets and liabilities: An asset puts money in your pockets, while a liability takes money out fo your pocket. An example of an asset is a rent-house, or stocks and bonds in a certain company, if the company is good and the stocks are ultimately going up in value.
- Don’t give up. Lastly, if you mess up in an investment, it doesn’t mean give up. It means you look at the mistake and figure out why it happened to make sure you don’t get yourself in that situation again - when you do this, you become wiser. The poor and middle class try something, and when they fail, they either blame a person or circumstances and they never want to have anything to do with that again. That’s not good! Just because you messed up one real estate investment does not mean real estate is a bad investment!
What it all boils down to is this: learn how money works while your bank account is still modest. Do away with bad spending habits, plus any fear of loss, fear of risk and fear of money issues you might have. If you start small, you’ll be able to make a lot of mistakes without it costing a bundle.
On the other hand, if your bank account is large, most likely you will want to play big with your money—buy large things, invest large sums and take huge risks. If you’re not well-educated about money, huge risks can equal huge loss. If your bank account is small, you’ll be more inclined to learn how to handle your money carefully and frugally, which minimizes your potential loss. Control your expenses and you’ll be able to afford to make several different (small) mistakes.
So if you think that you have to wait until you start making a lot of money (or win the lottery) to start learning about money, think again. Now is the time to start, while it’s all very small. You can’t hurt yourself too badly when your bank account is small, and you can both learn and earn at the same time. It’s never the size of your bank account that matters, it’s how you deal with money, no matter the size of your bank account.
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