Number 5: Money is a tool and it’s a Good Thing
How many times have you heard people saying: “money is the root of all evil”?
Plenty huh?! Think back of the person you heard saying that. How successful were they? How happy were they with their lives?
Poor people blame their misfortunes on the lack of money in their lives and attribute an element of negativity to the concept of money. This is because, even when they get money it leads to more and more problems which they don’t know how to tackle.
The rich do the exact opposite. They understand that money is merely a tool, which you use to navigate life. It’s just pieces of paper & plastic with drawings on them which we exchange for material value. Nothing less, nothing more.
Stop taking money so damn personal and use it for what it was created for. Exchange it to make your life better.
It’s super similar to scissors. You can cut hair with them or you can stab yourself in the eye. Why people choose to do the latter is a major mystery to us.
Once you start thinking of money like a tool, the game suddenly changes and you will stop harming yourself with it.
Number 6: Increase income instead of lowering expenses
One of the most valuable lessons a parent can teach their child is how to generate more money.
It takes the same amount of effort of work to barely survive or make a fortune.
This might sound peculiar to some of you, but it’s the truth. The difference is in the approach and the knowledge you use to backup that effort.
The smarter you are from a financial perspective the least effort you have to deploy into the real world. That’s why Wall Street brokers earn so much more than miners. Who between these two do you think deploys more effort?
Poor people are always focused on lowering expenses as much as possible; to the point that life isn’t almost worth living. Do you think the rich care about buying or not a $5 coffee from Starbucks or spending $30 on a movie?
Instead, the wealthy put all their attention to increasing the amount of money flowing in. If you radically increase your income there’s always going to be large amounts of cash left at the end of the month.
Poor people teach their kids to lower expenses while the rich focus on increasing their income.
Combine that with lesson number 2 from this list and you have officially won the game of money.
Number 7: Knowledge is more valuable than money on the long run
There’s another quote that we kept hearing a lot when we were getting started and it took a while to fully comprehend the true implications it had. It goes like this:
“Invest in yourself, it pays the best dividends!”
Sounds easy right? But it has very little to do with going to school or reading books.
It has a lot more to do with increasing how valuable you are to the world. The world rewards people who are valuable, because valuable people can create value for others and in exchange for that value, they can get whatever they want.
The concept of becoming a valuable person is not thought to their children by the poor, even just a few of the wealthy bring it up when the child is growing up, but those who do see a higher probability of both success and happiness.
There are many ways to become valuable, from filling a position in a company, to creating a product or service that people use, to showcasing your talent to the entire world.
The more valuable you are, the richer you will be. The only way to become more valuable is through the increase of knowledge, skill level and time.
Learn how to be better and then practice being better at it for long enough that you start to see noticeable differences. It takes 10,000 hours to master anything, that’s why the rich have their children try a bunch of activities in order to get a headstart on that number of hours.
Someone who has knowledge will always be able to generate money, because he is valuable to the marketplace! The opposite is not always true, sometimes knowledge can be too expensive to buy.
Number 8: Don’t work for money, Have money work for you!
This is the centerpiece of how to get rich. You can read as many books as you’d like, go to seminars, classes, MBAs, whatever you want, it’s all based on this.
Poor people exchange their time for money and then spend it!
The rich, use the money they get to create more money.
There are big differences in the approach to finance these two classes of people employ.
Most people stay poor because they believe you need large amounts of money to invest, otherwise there’s no point. The rich, are always looking for way to add the smallest drop in the bucket of passive income they can find, because it’s not about the amount as much as it is about freeing your time.
You can start a business these days with less than 100 dollars , if you know what you’re doing or even for free as long as you’re willing to put in the time. As soon as you generate enough revenue, use that money to pay for someone to do the things you used to do to keep the business running as you focus on growth and other things.
The concept of passive income and understanding how to use money to generate more money is the foundation to any wealth building strategy. Whenever anybody new asks us: what is the first book anyone should read if they want to be rich? We always answer with: RICH DAD POOR DAD by Robert Kiyosaki.
It’s the first financial book that made a difference in our actions and beliefs when we were starting out. You’ll find it translated in every language out there. If you haven’t read it, we strongly urge you to pick it up as soon as possible.
Number 9: Not to waste time on things that do not correlate to the real world
Sorry to break it to you, but nobody sees value in your ethnic or gender studies. Same goes for majors and degrees in: journalism, film and media, history or fine arts.
To be honest, we feel like the entire educational system right now is pretty messed up. They’re just repeating to you some things that used to make sense a while back, with a blatant disregard for the future.
You’re basically getting in massive debt over skills that 1. Do not have a direct correlation to the marketplace you will be performing in once you graduate and 2. If you’re really passionate about any of those topics and put in the time to master them, you have a better shot at making it on your own.
“We’re lending money we don’t have, to kids who will never be able to pay it back, for jobs that no longer exist. That’s crazy, right? That’s what we’ve been doing for the last forty years.”
Number 10: How to use good debt instead of bad debt like the poor do
Yeah, there are two types of debt.
Bad debt, makes you poor while Good Debt makes you rich.
Did your parents ever mentioned this to you when you were growing up? Probably not.
It’s one of those lessons that the rich have figured out a long time ago. Other people and institutions will actually help you get rich quicker if you know the difference between those two.
It’s all about the purpose of the debt. Poor people take out loans with the purpose of spending the money on liabilities. They borrow money to get a new car, to get a new phone, to cover necessities.
The rich only borrow money with the purpose of generating more money. Banks and investors love to lend money to this kind of projects, as long as you can clearly explain to them how their money will be safe and you will be able to pay it back.
That’s how people build skyscrapers, they don’t pay out of their own pocket for the building, not even for the land, it’s all borrowed. The bank is certain that you will be able to cell or rent the building and is willing to take that risk with you. Prove that you know what you’re doing and that you’ve done this successfully in the past.