There are four ways to become rich:

1. Live Below Your Means
2. Expand Your Means
3. Do Both
4. Getting Lucky

Living Below Your Means

Living below your means and investing your savings prudently is the only guaranteed way to become rich.

But, this approach requires enormous sacrifices – you must manage your spending your entire life and that requires making sacrifices: small house in an inexpensive neighborhood, no vacations, no restaurants, no kids.

If you do have kids your kids are forced to sacrifice along with you.

They have to buy their own stuff: iPhones, movie tickets, toys, cars, college education, etc.

Most are unwilling to make those sacrifices.

We want the nice home in the safe neighborhood, we want the nice vacations, we want to give our kids their iPhones and a college education.

So, for the vast majority, living below your means requires too much sacrifice.

But, for those willing to make the sacrifice, wealth is virtually guaranteed.

So, the question is, how bad do you want to be rich? Is being rich so important to you that you are willing to make the sacrifices that are required?

Expand Your Means   

Expanding your means usually requires taking on risk and working long hours, by pursuing a dream or starting a business.

According to my research and many other studies on wealth creation, about 80% of the multi-millionaires and billionaires make their money this way.

The upside is enormous wealth where everyone in your family benefits from your risk taking and hard work.

The downsides include time away from family due to long work hours or poverty, you could fail.

Doing Both

Living below your means and expanding your means requires the most sacrifice.

Getting Lucky

Getting lucky means you fall into money somehow without any real effort. 

Examples of this are big gambling wins such as hitting the lottery, the slots, horses, etc.

Or, you you inherit your wealth – you’re born into a rich family or inherit money from a parent, grandparent, aunt, uncle, brother or sister.

The reason so many gamble is because they are unwilling to make the long-term sacrifices required.

Almost everyone wants to be rich, but they want that wealth without having to take on risk, work long hours, or make sacrifices for themselves or their family.

Becoming rich is not easy

 

 

 

 

 

 

There are two opposing schools of thought that divide mankind.

School of Thought #1: Self-Determination Drives Life Circumstances

School of Thought #2: Predetermination Drives Life Circumstances

Those who subscribe to School of Thought #1 believe we are in control of our life circumstances.

There is no one out there, no higher power, watching over us, guiding us.

Those in this school believe success, wealth, failure and poverty are manufactured.

We turn left or right, decide A or B, or do X or Y as a matter of free will, instinct or internal guidance. 

In other words, the circumstances of our lives are dictated by our own decisions, our own behaviors and the choices that we make.

We, in effect, create our own destiny.

Those who subscribe to School of Thought #2 believe we are not in control of our life circumstances.

Some higher power is watching over us, determining the circumstances of our lives.

Those in this school believe success, wealth, failure and poverty are outside our control.

We turn left or right, decide A or B, or do X or Y because some force of nature acts upon us, directing us in every aspect of our lives.

In other words, the circumstances of our lives are not determined by us, but by external factors we cannot possibly control.

We, in effect, are powerless over the course of our lives.

When you subscribe to School of Thought #1 you embrace the concept that you are in control of your destiny; that you have power over the course of your life.

As a result, you develop a mindset of self-reliance.

Through hard work and personal initiative you seek to create the life you desire.

You pursue lifelong self-education, take calculated risks, seek feedback from others and carefully weigh every decision you make.

You search for mentors to help you forge good habits that put you on the right path.

When you subscribe to School of Thought #2 you embrace the concept that your destiny is predetermined; that you are powerless over the course of your life.

As a result, you feel you are not in control of your life.

You are a mere victim of the luck of the draw.

Because you feel you are not in control of your life, you do very little to affect the circumstances of your life.

You float along in life like a leaf on a fall day, carried by the wind.

Which are you?

Something to think about.

 

 

 

As I’ve mentioned often in my writings and interviews, self-awareness is a prerequisite to change.

So, I thought I’d put on my muse hat to help you confront the inner demons that are holding you back.

Here’s 5 questions to ask yourself that will help you better understand why you are where you are:

Question #1: Who Are My Mentors? 

Question #2: Do I Have Toxic Relationships?

The fewer toxic relationships one has in life, the better their life will be.

Question #3: How Much Self-Study Do I Do Every Day?

Question #4: What Are You Passionate About?

Question #5: How Many Hours Do I Waste Every Day?

The hallmark of successful people is their productive use of time.

They devote hours to self-study, networking with other success-minded people and pursuing dreams and the goals behind their dreams.

They develop a blueprint for their lives and devote hours every day following that blueprint.

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According to a study by Brown University habit study by Dr. Pressman, we pick up most of our habits from our parents.

If parents are bad at managing money, their kids will be bad at managing money.

When you’re bad at managing money it has a tendency to disappear.

That means no savings, no retirement assets, runaway debt and a life filled with financial worries.

No parent wants their kids to grow up to struggle financially as adults.

Yet, since most people do struggle financially, it’s clear parents have been and are failing to be financial success mentors to their kids.

Well, let’s put an end to this generational parenting malpractice.

In Tom Corley’s award winning and bestselling book Rich Kids, he shares many parent mentoring success strategies that help parents in raising their kids to succeed in life financially.

Here are a few of those strategies: 

•  Teach Savings – Saving is a habit that must be forged right out of the gate, with your child’s first adult job. Advice your adult child to start small, say 5% of net income. As their income rises increase their savings rate to 10%. The ultimate goal should be saving 20% of net income by the time they are age 30.
• Teach Investing – Parents can help their young adult children by directing them to sound financial advisors who will help them safely invest their savings. Personally, I’m fond of CFP’s, since they are experts in developing financial plans. They also have to pass a rigorous exam and abide by certain, not so easy to follow rules, in order to keep their license. 
• Teach Frugality – Don’t mistake being frugal with being cheap. They are two very different things. Being frugal requires three things:
•     * Awareness – Being aware of how you spend your money.
•     * Quality – Spending your money on quality products and services and
•     * Bargain Shopping – Spending the least amount possible, by shopping around for the lowest price.
• Teach Delayed Gratification – As your young adult child’s income rises make sure they do not fall into the very common trap called Lifestyle Creep.

Lifestyle Creep is by definition: increasing your standard of living in order to match your increased income.

It’s a common Poor Habit among many who suddenly find themselves making more money. 

The Rich Habit is to forgo the desire to spend your money today and, instead, sock it away into savings and investments that grow in value and provide financial resources that can be used in the future to maintain your standard of living.

That Rich Habit is called Delayed Gratification – putting off something you want today for something you want tomorrow – financial independence.

Now go out there and start mentoring.

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The gulf between Rich Habits and Poverty Habits is staggering.

If you’re well off already, chances are you already adhere to most of these Rich Habits.

Integrating the ones you’ve neglected will push you further.

But be assured: If you’re doing fine now without minding these principles, it’ll catch up to you.

Some of the differences between rich and poor are obvious, while others are a little more surprising.

Here are the most important Rich Habits you can take up to reach and maintain your wealth potential.

1. Avoid toxic people

We are only as successful as the people we spend the most time with.

Of wealthy, successful people, 86 percent associate with other successful people.

But 96 percent of those struggling financially stick with others struggling financially.1

If you want to end your financial struggles, you need to evaluate each of your relationships and determine if they are a Rich Relationship (with someone who can help you up) or a Poverty Relationship (with someone holding you back).

Start spending more and more time on your Rich Relationships and less on your Poverty Relationships.

Rich Relationships can help you find a better job, refer new business to you or open doors of opportunity.

2. Don’t give up

Those who are successful in life have three things in common: focus, persistence and patience.

They simply do not quit chasing their big goals.

Those who struggle financially stop short.

3. Set aside the self-limiting beliefs holding you back 

If you’re hurting financially, you’ve probably told yourself some of these untruths before: Poor people can’t become rich. Rich people have good luck and poor people have bad luck. I’m not smart. I can’t do anything right. I fail at everything I try.

Each one of these self-limiting beliefs alters your behavior in a negative way.

Almost four out of five wealthy people attribute their success in life to their beliefs.

Change your negative beliefs into positive affirmations by reading lessons from the greats of personal development, like Napoleon Hill, Dale Carnegie and Jim Rohn.

4. Get a mentor

Among the wealthy, 93 percent who had a mentor attributed their success to that person.

Mentors regularly and actively participate in your growth by teaching you what to do and what not to do.

Finding such a teacher is one of the best and least painful ways to become rich.

If you know your goals, find someone who has already achieved them.

You’ll be amazed by how many people want to lend a helping hand.

5. Eliminate “bad luck” from your vocabulary

Those struggling financially in life have a way of creating bad luck for themselves.

It’s a byproduct of their habits.

Poverty Habits, repeated over and over are like snowflakes on a mountainside.

In time, these snowflakes build up until the inevitable avalanche—a preventable medical problem, a lost job, a failed marriage, a broken business relationship or a bankruptcy.

Conversely, successful people create their own unique type of good luck.

Their positive habits lead to opportunities such as promotions, bonuses, new business and good health.

6. Know your main purpose

It’s the last Rich Habit, but it might be the most important. 

Those people who pursue a dream or a main purpose in life are by far the wealthiest and happiest among us.

Because they love what they do for a living, they are happy to devote more hours each day driving toward their purpose.

Odds are, if you are not making sufficient income at your job, it is because you are doing something you do not particularly like.

When you can earn a sufficient income doing something you enjoy, you have found your main purpose.

Believe it or not, finding this purpose is easy.

Here’s the process:

1. Make a list of everything you can remember that made you happy. 
2. Highlight those items on your list that involve a skill, and identify that skill.
3. Rank the top 10 highlighted items in the order of joy they bring to you. Whatever makes you happiest of all gets 10 big points.
4. Now rank the top 10 highlighted items in terms of their income potential. The most lucrative skill of all is worth 10 points.
5. Total the two ranked columns. The highest score represents a potential main purpose in your life. Presto!

As you can see, the differences between rich and poor are simple—sometimes intuitive—but not insignificant.

Aim to take up all 16 of these habits, and you’re almost guaranteed to become better off.

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