Becoming wealthy is more about how you think than how much
you have to work with. Someone with a small amount of money
get started with, but who has the right mental attitude, can become
wealthy and stay that way. However, a person who has a lot of
money to get started with, but has the wrong mental attitude cannot
become wealthy and stay that way. Notice that I didn't say
harder for someone with the wrong mental attitude to become and stay
wealthy, I said that they can't
become and stay wealthy. With the wrong mental attitude, it
impossible to become and stay wealthy. Do you think like a
wealthy person? I'll be giving you a little test later in
Do wealthy people really think differently than people who always seem
to be broke? Absolutely. I don't remember the
years ago I heard about an economic/psychological experiment involving
groups of adults. The experiment went something like this:
All of the adults arrived at the summer camp and were
with standard camp clothing and equal amounts of money with which to
buy items from the camp store as desired. At the camp there
plenty of fun, summer activities such as swimming, golf, tennis,
fishing, boating, skeet shooting, etc. For anyone who wanted
participate in the activities, there was a nominal charge.
camp also provided an on-site store where the campers could buy both
necessities and luxury items. In addition to the fun
the camp also provided a wide selection of work and investment
opportunities with which the participants could earn more than adequate
money. How much work to do, and how much fun to have during
summer, was left up to each individual participant. All
participants would keep any money they earned during the summer.
None of the participants knew ahead of time what the
was really about.
During the summer, some participants planned their time and divided it
between both the work and the fun activities at camp. Some of
this group worked and invested more than others, but all members in
this first group spent most of their time working and investing.
The remaining participants spent nearly all of their time participating
in the camp's fun activities. They only worked when they
money to pay for the fun activities or to buy things they wanted from
the camp store.
By the end of the summer, those who had spent some of their time
playing, but much of it working and investing, had saved up significant
of money. Many of these participants first earned the money
the camp work opportunities, then increased it by investing the money
in the camp investment opportunities. They left camp at the
of the summer feeling like they had enjoyed a fun summer participating
in all of the fun activities the camp had to offer, and were also
taking some extra cash home with them.
The remaining participants spent nearly all of their time participating
in all of the fun activities at camp. These people worked
long enough to earn the money needed to pay for all of their fun
activities and whatever they wanted from the camp store. As
as they had the money they needed, they stopped working and spent their
money on the fun activities until the money was all spent.
they went back to work to earn a little more money and the pattern
continued all summer long. They left camp at the end of the
summer feeling like they had enjoyed a great summer participating in
activities the camp had to offer. Since all of the money they
earned was spent on those activities, this group went home with no
extra cash whatsoever.
What the participants in this experiment didn't realize is that half of
the group was made up of people who were already well on their way to
becoming wealthy, and half of the group was made up of people who were
broke and always struggling with financial difficulty in their lives.
Guess which group was which!
The group who had planned their time between work and play, and went
home with all the extra cash, was the group of wealthy-minded people.
The group who left broke at the end of the summer
the people who were broke to begin with. The participants in
both groups started out
with the same clothing, money and opportunities at the beginning of
summer camp, yet some went home with nice sums of money while others
went home broke. What made the difference?
You guessed it, the difference was in their thinking, in other words,
their mental attitudes. The people who became wealthy were
thinking like wealthy people and the people who became broke were
thinking like broke people.
Do you think like a
wealthy person? Here's a quick test.
Imagine you are walking down a sidewalk and you find $1,000 in cash.
There is absolutely no way of ever finding out who lost it,
is yours to keep! Now, before you read any further, think
what you would do with the money. No one else needs to know
answer so be honest--what do you do with the money?
Did you think of something you would like to buy? Maybe
you've been wanting for a long time but didn't' have the money until
now? Did you think of a trip you would like to take?
you spend the money going someplace you've always wanted to go but
couldn't pay for until now? Would you use the money
to go out
with your friends and have a great time without worrying about the cost?
Or, did you think of putting the money in the bank and saving it for an
emergency? Did you think about investing it somewhere to try
make it grow? Did you think about a credit card or other debt
could pay down with it?
If you thought about spending it or buying something with it, then you
are thinking like a broke person. If you thought about saving
investing it, or reducing debt with it, then you are thinking more like
a wealthy person. Does this mean that thinking like a wealthy
person means never spending any money? Not at all.
means is this:
Wealthy people tend to think long term, while broke people tend to
think short term.
term versus short term thinking.
What exactly does it mean to think long term versus short term?
Thinking short term means that you are concerned with
gratification, that is, you want it now and you don't want to wait.
Thinking long term means that you are willing to put off
gratification now in order to have more in the future. What
comes down to is a thing called "opportunity cost." This
means that money can only do one thing at a time. If you
it, you can't save it. If you buy a car with it, then you
buy a boat with it. If you spend it to go to Germany then you
can't spend it to go to Japan. If you spend it now, then you
can't spend it later. When you decide what to spend your
on, you are giving up the opportunity to spend it on other
possibilities. These other possibilities
Short term thinking is "I want that new digital television and I want
to have it now--I'm not willing to wait."
Long term thinking is "If I use the money to pay off my credit card
then, for years to come, I will be able to just spend the
money I would have used to make the credit card payment..
In the above example of short term thinking, you have a new television
that will probably not be working ten years from now. At that
time, the $1,000 in our example will be gone, and so will be the
In the above example of long term thinking, if your credit card
payment were $50, then at the end of that same ten years, you would
saved up $6,000 by saving the payments from that credit card you paid
off. If you put your $50 per month into an
interest-bearing bank account, then you would have closer to $8,000 in
that same ten years.
See the difference between short term and long term thinking?
was immediate gratification (the television), and the other was putting
off gratification now in order to have more in the future ($8,000 ten
years from now).
Now you may be saying "well, I don't have a math mind so I wouldn't
have been able to see what paying off the credit card would accomplish
in ten years." Okay, fair enough, but what if I gave you
two choices ahead of time, before you decided what to do with the
money? Be honest, if you think like a broke person you would
have been willing to wait ten years and you would still have gone out
and bought the television. And even if someone who thinks
broke person were to be convinced to pay off the credit card instead,
would they really have been willing to put that $50 into the bank each
and every month for ten years? How about three years later
saving those payments has put almost $2,000 in that bank account?
Wouldn't you be
likely to take it out and spend it? And if you truly would
the discipline to save that $50 every month for ten years, then
congratulations, you are starting to think like a wealthy person.
You're moving in the right direction!
Would you have to wait the whole ten years for it to be
like a wealthy person? No. What if you were to save
$50 per month credit card payment for only two years? At the
of that time, your $1,000 would have grown to about $1,260.
you take out $1,000 to buy a digital television and you still have $260
left over that you wouldn't have had otherwise. That's still
putting off something now in order to have more later and
that's thinking like a wealthy person.
How to become a wealthy
To become a wealthy person, you have to start thinking like a wealthy
person. If you aren't thinking like a wealthy person, then
is no way you can become, and remain, a wealthy person. It's
impossible because you would be spending all of your money on short
term thinking and there would be no money left over to eliminate debt,
save, invest and use to become wealthy.
If you want to become a wealthy person, then you have to start thinking
like a wealthy person.
If you continue to think like a broke person, then you will always be a
Think like a wealthy person. Consider the opportunity cost.
If I take on a $400 per month, seven-year car payment now,
that's $33,600 I won't have seven years from now.
control my spending now and use that money to get out of debt, I'll
have the rest of my life to spend and invest the money that would
have gone into all of those payments. If I buy a smaller
now, I'll be able to afford a much larger one in the future.
invest for retirement now instead of spending all of my money as it
comes in, I can retire a millionaire!
Want to always be a broke
person? Then think like a broke person.
Want to become a wealthy
person? Then start thinking like a wealthy person.
To learn a lot more about saving, investing,
eliminating debt and
becoming wealthy, please read the articles
on the Financial Page.
There, you will find a veritable treasure of what to do and
how to do