There is a huge difference between the rich people’s mindset vs poor people’s mindset. If you understand these differences it will change the way you think. It will be the first step towards achieving your financial goals.
Harv Eker in his brilliant book, Secrets of the Millionaire Mind, has written about wealth files for mastering the inner game of wealth. Some of the scripts are discussed in the succeeding paragraphs. These wealth files are very powerful and can cause a ‘Butterfly Effect.’ You may apply some or all of them to change the outcome of your life. Please study these scripts carefully and start applying them gradually to your daily lives.
Rich people believe ‘I create my life’. Poor people believe ‘Life happens to me’
Enlightened millionaires take responsibility for their life and actions. They do not blame others when things go wrong. On the other hand, poor people think they are the victims and are experts at the ‘blame game.’ They blame the government, the economy, their bosses, friends and family when they fail. Blaming others for them is like a stress reducer. Complaining and justification are like pills they become addicted to.
You can either be rich or a victim—it depends on what script you choose. You slit your financial throat each and every time you choose to blame others. So choose to stay above the line. At the end of each day, carry out a complete debrief and write down each situation and how you handled it. This will dramatically change the outcome.
Rich people play the money game to win. Poor people play the money game not to lose
In sports, you can never win a game by playing defense; you have to be offensive and score if you have to win. I once saw a table tennis match—a really good player playing offence was matched against a defensive opponent and I had never seen a defensive player of his caliber. He was a virtual returning machine: he would stand twenty feet away from the table and continue returning the smashes from his opponent. It forced the smasher to make mistakes as he was the aggressor. The crowd cheered for the defensive player as he was unique or probably they identified with him. The aggressive player made several errors and lost points, but in the end, he won handsomely to the disappointment of the crowd.
I was in the Navy and in every war game we played offensive tactics to beat any purely defensive strategy. We also found that it was nearly ten times cheaper to build or buy an offensive weapon platform – like a missile boat or an aircraft launched missile – than to provide a credible defense against the threat.
The same holds true for the money game: truly rich people go on the offensive. Their goal is to acquire massive wealth. They shoot for the stars. Poor on the other hand, want to be comfortable. They never want to stick their necks out or pick up a challenge. They are always on the defensive, acting within their comfort zone. Security is of paramount concern to them. As a result, they never win and never get rich.
Rich people are committed to being rich. Poor people want to be rich
The number one reason most people don’t get what they want is that they don’t know what they want. Rich people are totally clear that they want wealth. They are unwavering in their mind and are fully committed to creating wealth. They will do whatever it takes, as long as it is moral, legal and ethical.
Based on the Laws of Attraction, the universe will conspire to help them achieve their goal because the message the rich send out to the universe is very clear – they want to be rich! The poor on the other hand, send out confused messages because of the negative wealth files. “What if I can make money and then lose it all? I’ll be in the highest tax bracket and will have to give away half the money to the government—it’s too much work. My health may suffer. I will have no time for my family. I’ll never know if people like me for myself or my money…my kids could be kidnapped.”
Most poor people want to be wealthy but have a confabulating script and a vague desire to be rich. This is why they do not succeed. The rich on the other hand have a script that is fully committed to creating wealth—devoid of any confusion whatsoever. They want to travel, have time on their hands, provide best possible things to their loved ones or help others and give money to charity. If you want to commit, then put your goals in writing and read them morning, evening and night. Announce your commitment to the entire world. Be congruent in thought, emotion and action. Clarity of purpose leads to success.
Rich people think big – Poor people think small
The difference between the rich and the poor is only a couple of zeros behind their incomes and net worth statements. It is as simple as that.
There is a saying: “Size of the question determines the size of the result.” If you ask yourself a question: “Can I earn $30,000 doing this?” Then you will get the wrong result. If you ask yourself the question “How do I create or earn a million dollars?” Then your mind goes to work in a different direction. It wants to find a solution and works ceaselessly to find a satisfactory answer.
Most people fail to ask the big question – they choose to play small. They are frightened of failure and even scared to death of success. Our life is not about shrinking and feeling insecure—life is all about expansion and discovering our true worth. As we expand and liberate from our fears, our very presence liberates others from their small attitudes. Think big; there is no greatness in being small.
You will be a millionaire if you start thinking like a millionaire. Want to be a billionaire? Then learn to think big like a billionaire—it is all in the mind and beliefs you have.
Rich People focus on opportunities. Poor people focus on obstacles
Rich people see opportunities – poor people see obstacles. Rich people see potential growth – poor people see potential loss. Rich people focus on rewards – poor focus on risks. The mindset of the poor is, “It won’t work.” The mind-set of the rich is, “It will work because I will make it work.”
What you focus on expands. If you focus on opportunities, they will expand. On the other hand, if you focus on obstacles, they will look insurmountable. If you want to be rich, focus on making, keeping and investing your money. If you want to be poor, focus on spending your money.
Rich people see an opportunity, jump on it and get richer. The poor look at the obstacles and keep preparing to overcome them. They never take action, which is why they lose.
Action always beats inaction. Rich people get started after understanding the risks; they make adjustments and corrections as they move along. If you want to be rich, focus on opportunities and take action.
Rich people admire other rich and successful people. Poor people resent rich and successful people
One of the surest ways to remaining poor is to resent the rich. Most poor people are conditioned to believe that one can’t be both rich and spiritual simultaneously or be rich and a good person.
There can be nothing further from truth. To create wealth, certain human characteristics are needed. One has to be intelligent, hardworking, reliable, focused, determined, persistent and positive. Moreover, the person has to be a good communicator with a high degree of human skills and integrity. Without some of these skills coming into play, it is impossible to become rich in the first place.
There may be a few exceptions wherein people have become wealthy through ill-gotten means. However, in my experience such wealth never lasts for long. Seek inspiration from the enlightened rich who are, by far, some of the nicest people. They have reached where they are because of their expanded mental state and positive attitude to life.
Practice the Huna philosophy which states, ‘Bless that which you want’. Write a letter or an email to someone successful you admire. Tell them how much you admire and honor their achievement. You will develop an instant connection to success.
Rich people associate with positive, successful people. Poor people associate with negative or unsuccessful people
Easiest and fastest way to create wealth is through association. Be with the rich and learn how they became rich and mastered the game of money. ‘If they can do it, I can do it’.
You must have heard the old adage: “Birds of a feather flock together.” This is very true because most people earn within 20% of the average income of their closest friends. If you want to soar, fly with the eagles and don’t get stuck swimming with the ducks.
Being in company of negatively minded people can be infectious. You can get measles of the mind. Instead of itching, you get bitching and instead of irritation, you get frustration.
It is not your job to reform negative people. You must keep away from them. Once you develop the positive energy field around you, they will get influenced by it but not before that.
In the initial stages, you must charge your energy field by hanging around with winners. Read biographies of the extreme rich and successful: Warren Buffet, Bill gates, Steve Jobs, Donald Trump, Andrew Carnegie and the likes.
Join clubs which the rich frequent. Identify friends and family who pull you down and stay away from them. Stop watching trash television and stay away from bad news that could potentially pollute the mind. Rich people hang around with winners. Poor hang around with losers. Never forget this basic principle.
Rich people are willing to promote themselves and their value. Poor people think negatively about selling and promotion
People who have issues with selling are usually broke – it’s obvious. How can you create a large income in your business, or as a representative of one, if you aren’t willing to let people know that you, your product, or your service exists? Even as an employee, if you are not willing to promote your virtues, someone who is willing will bypass you on the corporate ladder.
Poor have the fear of failure and rejection. They feel it is impolite to blow one’s own trumpets. The world has so many products and services that nobody has the time for you or your product if you are not willing to step up and project yourself.
The poor have an attitude that makes them naively believe in their uniqueness. Hence, promotion is beneath them. Poor believe that because they are so special, someone will find them ultimately. They remain broke because of this attitude.
You may have the best talent and the product but no one will know of it if you are unwilling to promote. This is because everyone in the world has an information clutter and no time for you. You have to rise above the clutter and make yourself be heard.
Rich people are always excellent promoters. They know how to package their ideas, products and skills and they promote them with enthusiasm and passion. Robert Kiyosaki, author of the best-selling ‘Rich Dad Poor Dad’ series of books calls himself the “best-selling” and not the best writing author.
Every business depends on selling. Money is made only when something is sold in the market place. To become rich, you have to learn the art of promoting with 100 percent integrity. This can be done through courses in marketing and sales or reading books on the subject. People who shy away from this vital aspect cannot hope to amass wealth.
Rich people are bigger than their problems. Poor people are smaller than their problem
Poor people want to run away from problems – they don’t want hassles and headaches. They will sweep them under the carpet or close their eyes like ostriches to wish them away. Problems have a habit of rebounding with a great vengeance. The more you try and avoid them…the poorer, broke and miserable they will keep you.
The secret to success is not to try to avoid or get rid of or shrink from your problems; the secret is to grow yourself so that you grow bigger than the problem.
The rich are problem solvers. They make money by identifying a problem and find a solution for it. People will pay money to solve their problems.
If by training you become level-10 problem solvers, do you think a level-5 problem will cause any worry or stress to you? The secret is to grow bigger than the problem.
The first step is to write down all the problems you are having in your life and then list actions to resolve them—this simple exercise will make your growth process to become bigger than your problems.
Your income will directly relate to the level of problem you are willing to solve. If you are an employee, you are solving a problem for your boss. You will get fired once you become a problem for the organization. If you are in business, you are solving problems for your clients. Be it servicing a car, providing plumbing services or pulling out a tooth. The quality of service and level of problem you are willing to solve will determine success of your business.
Rich people are excellent receivers. Poor people are poor receivers
For every giver there has to be a receiver, and for every receiver there must be a giver. One of the reasons why poor remain as poor is because they are poor receivers. They may or may not be good at giving but most certainly, they are poor receivers.
This holds true in every walk of life. To be loved, we have to know how to receive love. The universe has infinite abundance of wealth—it has to go somewhere. There are trillions of dollars floating around. If we are not ready to receive our share, it will go to someone who is willing to receive.
Being open to receiving is absolutely critical to creating wealth. There are times when money flows into our lives, we should accept the blessing of the universe gracefully and accept it as a gift. Once you learn the art of receiving, you will become a money magnet and start attracting money.
Rich people choose to get paid on results. Poor people choose to get paid based on time
The thumb rule to becoming rich is: “Never have a ceiling on your income.” Poor people trade time for money. The problem with this strategy is that your time is limited. This means that you are breaking the fundamental rule of becoming rich which means having no ceiling on your potential income.
Rich people prefer to get paid in results. If they run a business, they get paid from the profits. Alternately, they prefer to work on profit sharing, stock options or commissions.
In the financial world, rewards are proportional to the risk one is willing to take. What the poor do not realize is that job security comes at a price and that price is wealth. You can make a small start by requesting your employer to pay you partly based on the results. Another option is for you to set-up your own small business or consulting company, or to join a network marketing company and become result oriented.
Rich people think ‘’both.” Poor people think “either/or.”
Rich people live in a world of abundance and poor people live in a world of limitations. Both live in the same physical world, but the difference is in their perspectives. Poor people think that either I can be rich or be spiritual.
Rich people think they can be both. Poor people think that either they can spend time with their families or work hard to become rich. Rich people think they can balance both.
Rich people believe “You can have your cake and eat it too.” The middle-class people believe “Cake is too rich, so I’ll only have a small piece.” The script of the rich is to be creative and find ways for having “both.”
The rich focus on their net worth; the poor on their working income
The vocabulary of the poor consists of: “How much I earn” or “How much I make.” The rich, on the other hand, think of their net worth’ and “How much profit I made.” The true measure of wealth is net worth, not working income.
The words that write your script define your future. If you think in terms of ‘earning’ as opposed to ‘net worth,’ you will stay put in your job of trading time for money. Where attention goes, energy flows and results show. So, focus your attention on the right script to increase your income. Simplify your life style to reduce your cost of living and invest the savings or surplus amount. Create a net worth statement and revise this statement every quarter to help analyze your progression.
Rich people manage their money well, Poor mismanage their money well
Rich people are good at managing their money though they are not necessarily smarter than the poor; they just have a different approach towards money.
This small difference in habit makes the biggest difference in the financial outcome of being rich or poor. Poor people either mismanage or they avoid the subject of money altogether. The excuse generally given is either, “It restricts our freedom” or “We don’t have enough money or time to manage.”
Nothing can be further from truth, because managing money allows financial freedom. The habit of managing your money is more important than the amount. Until you learn how to handle what you’ve got, you are most likely not to get any more.
Rich people have their money work hard for them. Poor people work hard for their money
Most of us are programmed “to work hard for money.” The rich on the other hand, reprogram themselves “to make their money work hard for them.”
Working hard has never made anyone rich—working smart is the way to riches. The more your money works, the less you will need to work.
The definition of financial freedom is the ability to live the lifestyle you desire without having to work or rely on anyone else money. Therefore, to become free you will need to earn money without working. To do this you will need to create a passive income wherein money keeps flowing in whether you work or not.
The sources of passive income working for you can be either financial instruments like stocks, bonds, mutual funds or businesses working for you that are in confluence with: real estate, royalties from books, music or software, licensing your ideas, network marketing etc.
These will be discussed in depth later in the book. In simple terms: poor people work hard and spend all their money, which results in them having to work hard forever. Rich, on the other hand, work hard, save and then invest their money so they never have to work hard again.
The key is to change the money blueprint from immediate gratification to thinking long-term. Balance your spending on enjoyment today with investing in freedom tomorrow.
You will need to change your “Material gratification” files and replace them with “Financial freedom” files. Change your focus from “Active income” to “Passive income.” List out strategies you can put to work to generate passive income.
Rich people act in spite of fear. Poor people let fear stop them
Fear freezes us to act and our well laid plans fail to manifest; thoughts lead to feelings, feelings lead to actions and actions lead to results.
We may have all the right knowledge but unless we act, there can be no wealth creation. Action is a bridge between the inner and the outer world. Rich and successful people have fear; they have doubts and worries like the rest of us but they do not allow these fears to stop them.
Poor people on the other hand, allow their fears to limit them. To change our scripts, we have to break the habit and make a conscious effort to act in spite of doubt, in spite of worry, in spite of uncertainty and discomfort. We have to learn to act even if we are not in a mood to do so.
Rich people constantly learn and grow whereas poor people think they already know
The three most dangerous words in English are “I know that.” So how do you know if you know something? It is simple. If you live it, you know it. Otherwise, you heard about it, you read about it, or you talked about it, but you do not know about it. To know about it, you have to live it. If you are not really happy, there’s a good chance you still have to learn about money, success and life.
Poor people generally try and prove that they are right and they have got it figured out; it is just a stroke of bad luck or a temporary glitch that has them broke and struggling.
There is an excellent saying by Jim Rohn that makes perfect sense here: “If you keep doing what you’ve always done, you’ll keep getting what you’ve always got”. If you are unsuccessful and not willing to change your life script or take the trouble to educate yourself, then you will keep getting the same results again and again. Someone rightly said, “Definition of madness is to keep doing the same thing again and again and expect a different result.”
There is a constant need to learn and grow; everything alive is constantly changing. If a plant is not growing, it is dying. It is true for every organism including human beings. If you are not growing, then you are dying.
Author and philosopher, Eric Hoffer, has rightly said, “Learners shall inherit the world while the learned will be beautifully equipped to live in a world that no longer exists.” This means that if you are not constantly learning and growing you will be left behind.
Poor people usually complain that they do not have either the time or the money to get educated—these are plain excuses. The only thing normally lacking is the commitment to learn and change. Rich people, on the other hand, relate to Benjamin Franklin’s famous quote: “If you think education is expensive, try ignorance.”
Poor people seek advice from relative and friends who are equally clueless. This keeps them entangled in the web of poverty. The most expensive advice you can ever receive is free advice from an ignorant person.
Rich, on the other hand, continuously read books and attend seminars to improve the skills and strategies they need to accelerate their income, manage their money and then invest it effectively. They learn the game of money from those who are the masters in the field and have success become a corollary of it.
Your income is directly related to your inner growth, which includes: financial, emotional and spiritual IQ. You must commit to your growth and consider hiring personal coaches to keep you focused and on track in the various aspects of your life, including health.
The outer world is merely a manifestation of your inner world. There are outer laws of money that entail: business knowledge, money management and investment strategies.
Equally important are the inner laws that defines you as a person. It is not enough to be at the right place at the right time. You have to be the right person in the right place at the right time.
Fear, which is the biggest enemy of wealth creation, can – to a large extent – be controlled by expanding our financial, emotional and spiritual intelligence. The internal change is critical before we can learn about the outer laws of wealth creation which in comparison are very easy to master. Once the internal transformation is complete, there is no force on earth that can stop you from becoming a millionaire.