Don’t believe you can be rich? Read this.
Most people don’t believe they can be rich. I consistently hear “being rich is not in my cards.” That you have to be lucky, dishonest or both to live the high life. This is a bunch of horse shit. What’s standing in your way is belief itself.
You are waiting to believe, when belief is a result. Belief is born out of hard work without promise of reaching your desired goal. It’s easier to show you in this short, but inspiring, video. Watch and notice how much hard work he put in, and the results he had to achieve, before he started to believe. (It’s about halfway through the video. )
If you want your financial situation to change, don’t wait to start believing. Take action, and you will start to believe. (Of course this will not happen overnight, but in our instant gratification culture this obvious fact needs to be repeated like scripture.) What can you do?
Set your account up on Mint
The hardest part is getting started. It can be painful to look. But not looking is causing you your pain. ( We have a chicken and egg thing going on in this article.) Mint makes it easy to see all your income and expenses in one place. When you have a couple of accounts it can be overwhelming to mentally track how much you spend. Don’t count your money and expenses in your head! It takes mental energy and produces inferior results. Just doing this can save you $1,000 a year.
Create a budget
The formula for getting rich is the same for everyone, and if you don’t master the first step you aren’t even going to be debt-free, let alone rich. What’s this exciting first step I talk about? Spending less than you make. Now don’t start crying about how you don’t make enough money. You do. Did our superhero in the video cry that he didn’t have a yoga studio to practice in or that he couldn’t afford to take lessons? No! He asked for help. He got encouragement and some home videos. And he made the rest happen. You can do the same.
In order to spend less than you make it’s very helpful to budget. It’s freakishly easy to spend money. I find it best to take it one month at a time. It goes like this. At the beginning of the month, sit down and create a budget in Mint, for that month only. Ask yourself, “What expenses will I have this month? Are there any birthdays? Doctor appointments, trips, etc.?” Then enter the amount you think it will cost. If you don’t know exactly, put in your best educated guess. (If you’re really stuck, do a two-minute Google search.) Just enter a number. Perfection is for broke people. Over time your guesses will get better and better if you don’t get hung up on doing it “right.”
As a culture we haven’t been taught about money. We have been taught how to earn it, and how to spend it. But this is a zero sum game. You need to learn how to make it work for you. You can do this by reading Mr. Money Mustache’s blog, which is very engaging, and has some fun saving tips. Take a class or hire a financial adviser who can just tell you the information*. The take away is that you are the CEO of your financial life and, although you might not care to learn the exact details of how to build a stellar portfolio, you do need to know the risks to your position, and how they can be eliminated or turned into assets.
*I recommend paying for flat fee advice. This takes away the inherent conflict of interest that exists when the planner makes money only on commission. This does not mean that these people are “bad” or “untrustworthy.” It simply eliminates any unconscious bias.