Tuesday, April 21, 2015

9.5 Mental Changes to Become Wealthier

I recently read an article on Business Insider called 9 things rich people choose to do that poor people don't. I found the article quite interesting, but the feedback among people who followed the link I shared to it was quite negative. They saw it as victim blaming and more of the rich blaming the poor for being poor. However, I believe that the article was written to be a list of suggestions for improving one's mindset to achieve greater wealth, rather than just saying "these people are good, these people are bad."

I believe that there are very important lessons in this article which have been overlooked because of the tone, so here are the 9 lessons of the article reframed in terms of how you can think and act like a wealthy person to become a wealthier person.

The economy on the whole is more and more stacked against those trying to climb the social/economic ladder, and on the whole there are major structural changes that are needed to maintain the stability of our society such as an increased minimum wage, debt free education, universal health care, and the like. However, this is not about everyone. This is about me and you and what an individual can do right now to improve their position.

1. Earn What You Are Worth and Work For Yourself
There has been much debate on the minimum wage and what it should be. Some people argue that if you are working full time, you should be able to support your family in any job. Others counter that minimum wage jobs are meant to be starter level jobs that one should rise up from.

Many people who work low wage do so because they do not believe they can do any better. If you believe that you cannot do better than minimum wage, then you are correct... until you change that attitude. You probably have a skill which will earn you more than minimum. Car salesmen, house painters, and nannies make more than minimum wage. If you are good at academic subjects, you can get $18-$50/hour tutoring privately. A good auto detailer can make good wage. A waiter in a decent restaurant can make $15+.

This is where you might argue that you or someone you know worked at a restaurant and made less than $9/hour because of bad scheduling or poor tips or shady managers or whatever. To which I reply that I did not promise that all restaurants will get you good money, just that it is possible at some restaurants, so if you end up at the crappy one where you make bad money, fire your boss and move on.

When I say work for yourself, I do not mean that you should start your own business, although you could. What I mean is that you are ultimately accountable to yourself and your family. You make a business arrangement with an employer that you will provide a certain level of service and they will provide a certain level of compensation. Should this arrangement stop working for you, you must stop working for them and find a better opportunity.

2. Focus on Opportunities, not Obstacles
Difficult things will happen in your life. Changes and challenges will occur. For example, having kids is usually not considered a good economic investment. However, my economic situation is better now that I have a child than it was before. Partly it is because knowing I needed to take care of her forced me to focus on my opportunities. Partly it is that being a parent has opened doors that were closed to a non-parent.

It is easy to make excuses for why things are not going your way. I know because I have made many of these excuses. I had every excuse in the book for why Phoenix Games did not make money, but ultimately, it came down to me not being willing to do what I needed to do to make it profitable.

In the example above, I suggested that working in sales or waiting tables could make good money. Someone with a success mindset will try a job that doesn't work out, and conclude that the particular job was the wrong one and go to the next opportunity. Someone with a failure mindset will conclude that this whole "getting ahead" thing is not for them and there is no point in trying.

Try. Fail. Try again. Fail better. Keep trying. Succeed.

3. Associate With the Right People
Do your friends whine about how hard their lives are, never take responsibility for their circumstances, and wait for luck to fix things for them? If so, these people may be a bad influence. What influence do your friends have? Let's imagine you are trying to find a job, but you are having no luck. You commiserate with your friends, and they confirm that you are doing nothing wrong, it's the economy that sucks. Why not take the night off and have some fun and relax. This reinforces the desire to blame outside factors for your failure. It sure beats self analysis and harder work.

However, what if your friends, instead of telling you that you did nothing wrong, worked with you to figure out what you could do better, or, even better looked through their own contacts to see whom they might introduce you to? Instead of finding excuses, you are finding solutions.

The first set of friends makes you feel better about failing. The second set helps you succeed.

4. Promote Yourself
If you don't tell people how great you are, who will? There is a belief among most people that it is tacky to self-promote, and in some contexts it is. However, there are times when it is necessary. If you are trying to make a sale or get a job, you must promote yourself. Even more than that, if you are going to move forward, people need to know what you do and what you are looking for.

Most people who I know know that I sell cars, and thus am looking for people to buy cars. More than that, they know that I specialize in challenged credit and low cost cars. They also know that I am involved in conventions.  By having that information out there, when they encounter people looking for what I have, they will make the introduction. However, if I were quiet and modest, I would miss out. This is not a matter of taking advantage. When someone introduces a friend who needs a car to me, it solves a problem that their friend has, it makes me a sale, and it earns my friend a favor. Everyone wins.

If there is something you want, something you can do, something you deserve, make sure people know about it. People like to help people, but they have to know what you want and need to connect you with it.

5. Don't Shrink Before Challenges, Grow Bigger
When you encounter a challenge, if your first reaction to think of reasons why it is insurmountable or to find ways to overcome it? Be honest. Most people are the former. If a challenge cannot be overcome, then you can stop worrying about it. Nothing could be done. Not your fault.

That's great because it makes you feel better, but it does not help you more forward. If you are happy where you are in life and don't feel any improvement is needed, then challenges can be let alone. However, if you want to improve your circumstances, you must look at every challenge and obstacle as something that can be overcome. Your first reaction must be to know that there is a solution, you just need to find it.

6. When Offered A or B, Choose Both
Life is full of choices, but often there is a secret third option of both, but it requires creativity. You need to make money but you want an education. There is not time for both. Get creative. Is there a way to work for the school to earn money as part of your education. Is that piece of paper from the college important or is it that you want greater career opportunities that come with education? If it is the latter, work to get an internship with an entrepreneur or something who can teach you, The lessons will help you advance, and the relationship developed will be invaluable.

I reiterate that people should not be forced to choose between survival and education, and our society must provide education. However, until they do, we must work in the world that is, rather than the world that should be.

7. Focus on Wealth, not Income
The wealth mindset is one of accumulating resources over time to increase prospects. The income mindset is one of trying to get as much in the paycheck so that it can be spent today. Wealth is not just money, it can be relationships, experience, skills, and other resources. By having a wealth mindset, you approach every choice by asking, which option will provide me the most resources for the next stage of my life, rather than asking which will let you buy the most stuff now.

Little by little, that wealth accumulates creating additional opportunities. Connections that I made a decade ago have come to fruition, creating opportunities for both me and the people I am connected to.

8. Constantly Learn and Grow
School is never out. If you seek to move forward, you must always be learning. If you have made it this far into this blog, chances are that you do read and work to improve yourself. That is good. Even the best are always seeking to improve. Champion athletes at the top of their game still spend hours in the gym learning and practicing to get even better. Whatever you want to do, constant improvement is vital to get there.

9. Take the Hard Road
The way to wealth is rarely the easy road. Staying at your current job is easy, but it may not provide you an opportunity. Changing jobs or starting a business or adding a second project on the side may be much harder, much more challenging, but only by taking that hard road will you get where you want to go.

9.5. You Will Fail Before You Succeed
Thomas Edison failed to invent the light bulb over 10,000 times before he got it right. Each filliment that didn't work got him one step closer to the one that would. Your first business may fail, so may your second. Your first job in sales may be a terrible experience. This is how it is. The choice that will determine if you achieve your goals or fail to do so is what you do with that failure. If you learn from them and get back on the horse and try again, you will eventually succeed, but if you take that as a sign that you never should have started a business or tried that new career, then you will eventually stop striving, and failure and mediocrity is absolutely guaranteed.

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