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February 10, 2020
Last year I did a video all about money mindsets that was really popular and got a lot of people thinking about why they think about money the way they do. It got me thinking that it might be helpful to explore this topic even further, and talk about the differences between a “Rich Mentality” and a “Wealthy Mentality”
There are several differences between a rich mentality and a wealthy mentality when it comes to the following topics:
Many people look at earning $100,000.00 as a benchmark for wealth when it comes to income. Then they reach that benchmark, their lifestyle expenses increase, and then that 100k doesn’t seem like so much money. So they aim for the next benchmark… 300 thousand dollars. And guess what? Expenses increase, it doesn’t seem like enough, rinse, repeat. And this just goes on and on.
The above hamster wheel is what having a rich mentality looks like. It relies on earned income strategies, and you can only make as much money as you have time to earn.
A wealthy mentality looks for ways to earn passive income to reach that six-figure goal.
The way a person with a rich mindset looks at savings is quite different than that of one with a wealthy mindset. If you are someone who has a rich mindset, you likely have a large sum of money saved in a bank. I personally have done this myself! I used to be obsessed with the idea of having AT LEAST 6-9 months of living expenses in the bank at all times.
The problem with this is that the money sitting in the bank is not working for you, and is actually losing value due to inflation (I recorded an entire video on this, which you can check out HERE)
Someone with a wealthy mindset will look at that money that would be sitting in the bank and invest it in something that will protect them against inflation, and also bring returns. I get it- the idea of not having your savings readily available in case of emergency is scary. Please understand that I’m not talking about emergency funds, or having some amount of cash handy. BUT, I am talking about investing any large sums you may have sitting in the bank into investments that can work for you!
I know you’ve heard me preach this over and over, but even I am guilty of not really thinking about where every dollar is going. I do when it comes to large purchases, but when it comes to 20 bucks here and there on small inconsequential things I’ll do it without thinking. Guess what those small purchases add up to? You guessed it- Big ones!! The reason this falls into a rich mentality is because I’m fortunate enough to not NEED to worry about spending 20 bucks on lunch out. But if I was coming from a wealthy mindset, I would anyway because every dollar spent on something small is actually a dollar that could be spent on something larger and more meaningful.
Gonna say this loud for the people in the back: GET IN A BIGGER ROOM ????. What I mean by this is: don’t be uncomfortable or feel like you don’t belong if you find yourself in a situation with people who have reached a level of wealth or security that you aspire to. It’s GOOD to surround yourself with people who are reaching the goals you also want to reach. It can be inspiring to hear the successes of others, and it can be helpful to learn from them!!
If ever you want to talk about this, or have more questions, I’m here to help!
Lizy Hoeffer NMLS ID # 260183. AZ LO-0913409 I am authorized to conduct business in the state of Arizona. All loans subject to underwriting approval. Certain restrictions apply. Call for details. THIS SITE IS NOT AUTHORIZED BY THE NEW YORK STATE DEPARTMENT OF FINANCIAL SERVICES. PHONE NUMBERS DISPLAYED ARE NOT FOR USE BY NEW YORK BORROWERS. NO MORTGAGE SOLICITATION ACTIVITY OR LOAN APPLICATIONS FOR PROPERTIES LOCATED IN THE STATE OF NEW YORK CAN BE ACCEPTED THROUGH THIS SITE. CrossCountry Mortgage, LLC. NMLS1925878, 3100 West Ray Road, Suite 201 Office 212, 218, 219 & 228, Chandler, AZ 85226 (www.nmlsconsumeraccess.org)
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