Regular Property Update blogger Pete Wargent recently wrote an excellent piece on the psychology of wealth creation. Source : http://propertyupdate.com.au
1 – Increasing your self-esteem
Why is self-esteem relevant to wealth creation? The reason is because if your self-esteem is low and you then achieve a level of success that exceeds what you believe you are worth, you will unconsciously sabotage your success.
2 – It pays to invest for the long term
Too many of us devise plans to make ourselves a little better off in the short term, but have no cogent plan for building wealth over the long term. True wealth and fortunes are built slowly but surely.
Following the principle and power of compound growth is the key to building wealth. If you can add some leverage – the use of other people’s time and other people’s money – you can join the ranks of the super-wealthy over time.
3 – Study and counsel with wise men
If you want to be successful, learn from successful people. Find someone who has achieved what you want to achieve. Study and follow their methods.
You may even be able to learn from some of their mistakes and reach your goals even more quickly and completely than they did themselves. This is a powerful tool known as ‘modelling’. I consciously use it every day.
4 – Paying yourself first
What do most of us do? Pay our mortgage, pay our bills, pay our credit cards and pay for other essentials. Then we look to see what is left over at the end of the month.
We need to see things another way. Invest a decent sum safely away first and then worry about the other payments thereafter. It sounds arrogant. It works.
5 – Controlling expenditure
Financial freedom is about having passive income – which flows to you regardless of whether you work – that is greater than your outgoings. There are two variables in that equation that can be adjusted to achieve the goal.
One is to increase the passive income figure (through investment). The other is reducing the outgoings (through thrift).
Where are the holes in your financial foundations? How can you plug the gaps?
6 – Taking action
It’s all very well studying these first five steps, but what really counts is taking massive and consistent action and simply never, ever giving up.
What is holding you back from starting today? A fear of failure? A fear of losing money? You’re “doing OK” without investing? When will you start to take action? Next month, next year, next decade?
You need to dare to be different to achieve wealth. Procrastination is the killer of all opportunity. Take action today!