The non-rich spend their money and save what’s left.

The rich save their money and spend what’s left.

One is a poverty philosophy and the other is a wealth philosophy.

Poverty Philosophy

According to my Rich Habits data, those who are poor never forge the important habit of saving money and, thus, are never able to invest. How can you invest what you don’t have?

If you were never taught this savings Rich Habit, you automatically default to the Poor Habit of spending all of your money. And if you spend everything you make, you eliminate any opportunity to create wealth, through prudent investment.

In effect, you abandon one of the least difficult and more certain paths towards accumulating wealth – Saving & Investing.

Wealth Philosophy

Saving money is crucial to creating wealth because only by saving money can you invest those savings.

And this Rich Habit – Saving and Prudently Investing Your Savings is one of the three paths to wealth I discovered in my Rich Habits research and often write about.

What makes this path so important is that it is within the reach of just about everyone.

Unlike the two other paths (Becoming a Virtuoso or Pursuing a Dream), it is the least sexy path towards wealth creation.

It does not require any special skills, innate talents, excessive risk or some outrageous work ethic.

The only requirements are saving at least 10% of your income and prudently investing those savings.

This Saving & Investing path takes a long time to accumulate wealth – an average of 32 years.

Also, in terms of the millionaires in my study, those who pursued this path were also the poorest millionaires in my study.

Nonetheless, it is one of the more certain and least demanding paths to creating wealth.

The wealthy who Save and Invest force themselves to survive off 80-90% of their net income by automatically setting aside 10-20% of their income with every paycheck.

What I mean by automatic is – they treat saving as if it were a monthly bill – the first and most important monthly bill they must pay each month.

This Wealth Philosophy elevates Savings to the point where it becomes your #1 financial priority, or #1 monthly bill.

When you consider Saving as your #1 financial priority, you are then able to back-engineer your standard of living (i.e. keep it low), in order to ensure your ability to save.

How you think about money, your money philosophy, drives your money habits. If you have a Wealth Philosophy, you will see money as a tool to build wealth and forge good money habits, enabling you to save and prudently invest those savings.

When I was nine years old my Mom gave me $1 and asked me to go to the store to get milk so that my Dad would have milk with his dinner.

I went to the bathroom and then walked the two miles to the grocery store to get the milk. When I got to the store, I couldn’t find the dollar my Mom had given me. I lost it somehow. I got back home to see my Mom standing at the door, waiting for me.

“You left the money I gave you in the bathroom,” she said in a stern voice. “Now hurry back to the store before your father gets home.”

I ran to the store as fast as I could, got the milk and ran back home. Unfortunately, my Dad had already gotten home from work and was finishing up his dinner.

“If your head was not attached to your neck, you would have left that in the bathroom too!” he yelled to me.

Whatever message my Dad was trying to convey to me, the message I got was that I was stupid.

That single event created a limiting belief for many years.

From that moment on, I believed I was stupid, and so, I got into the habit of not doing my homework or studying.

As a result, I struggled academically.

My struggles, however, ended in 8th grade thanks to my very attractive science teacher, Ms. Summers.

After handing me the results of yet another failed science test, Mrs. Summers asked me to stay after class, as she wanted to talk to me.

I had gotten so used to these after class meetings that they no longer bothered me in the least. They were all the same lecture – “you’re not doing your homework and you’re not studying enough”.

In my mind, homework and studying for tests was a waste of time because I was stupid. My teachers just didn’t understand that.

But Mrs. Summers did something very different. She didn’t criticize my school work habits. Instead, she told how smart she thought I was. She said she actually thought I was one of the smartest kids in her class.

Part of me wanted to turn around to see if there was someone standing behind me, Mrs. Summers was actually talking to, other than myself.

Mrs. Summers concluded our talk by telling me she was so confident in my intelligence that she expected I would get the highest grade in the class on the next test.

I remember going home on the bus that day. All I was thinking about was studying for that science test. I studied for hours every night for that test.

A few days later, when Mrs. Summers handed me the test results, at the very top, in very large numbers was written “99”.

I had received the second highest grade in the class.

Mrs. Summers made me stand in the front of the class and held up my test score for all the class to see. Then she wrapped her arms around me, hugged me tight and told everyone in the class how smart Tom Corley was.

I’ve had many emotions in my life but that emotion ranks among the highest. And it’s still with me to this day. I’m feeling it right now, as I write these words.

Emotions are very powerful things. And emotions happen to be one of the most powerful catalysts for creating beliefs.

A belief is formed one of three ways:

1. Internal Statements – Self-Talk
2. External Statements – Statements made by those who exert a major influence over our lives, such as parents, teachers, friends, family, etc.
3. Emotional Events – Achieving a goal, failing to achieve a goal, winning, losing, failure, success, etc.

Occasionally, the influencers in our lives (parents, friends, teachers, supervisors, etc.) can unintentionally cause the creation of limiting beliefs.

“Dan is no good at math”, “Lauren is clumsy”, “If Tom’s head wasn’t attached to his neck he’d forget it in the bathroom”.

Destructive criticism can morph into a a negative belief if the person doing the criticizing is someone you respect, love, like or admire.

Conversely, compliments can morph into a positive belief if the person doing the complimenting is someone you respect, love, like or admire.

At the core of almost every belief, is an emotion that gave it life.

Once a belief is accepted, habits generally follow.

My newfound belief that I was, in fact, smart changed my study habits for the rest of my life. I went on to become a solid B+ student the rest of my academic life. I was even able to pass the CPA exam, get a Masters degree in taxation, and pass the ten-hour long Certified Financial Planning test on the first try.

Your daily habits are joined at the hip, with your beliefs. If you want to change bad habits, you must change the limiting beliefs behind them.

Major life changes always require a catalyst.

Sometimes it’s a dream that inspires you with so much passion, you completely change course in life.

Sometimes it’s an audacious goal that pushes you to work hard towards the realization of that goal. That work forces you to develop new skills and acquire new knowledge that forever changes your life.

Sometimes it’s a break up that causes you to seek personal self-improvement, completely changing you physically and mentally.

Sometimes it’s a job loss that forces you to make a shift in your career, which completely changes the trajectory of your life.

And sometimes it’s just plain disgust.

Disgust may be the single biggest catalyst there is, which forces change.

I like to think of disgust as the Dead End that pushes your back up against the wall, requiring that you do something different.

You reach a dead end when you decide you are simply disgusted with yourself, your circumstances, your relationships, your poverty or your mediocrity.

Disgust forces you to self-assess. This self-assessment often leads to massive changes in your life.

But what if you’re not disgusted with your life and are simply disappointed about your life circumstances?

How do you trigger disgust?

The Dream-Setting exercise of creating a script of your ideal, future life, holds the key to releasing this emotion.

Creating a script of your ideal future life and comparing it to your current life will cause disgust because it creates a conflict deep inside your subconscious mind.

That script activates certain regions within the subconscious mind, whose new mission or directive is to deliver to you the circumstances you described in your script.

The Reticular Activating System, Insula and Thalamus work in unison with the five senses, searching your external environment for people, opportunities and information that can help direct you to the path that leads to the life you desire.

Reviewing your future life script at the start and end of every week will reinforce your desire to change your life and keep your subconscious on alert, searching for the right path to take.

It takes time, but it works.