There are two types of people: those who think about their money and those who don’t. Which one are you? Per a recent government survey, roughly half (55%) of Australians believe that money is “just a means to buy things.”
While partially accurate, holding that viewpoint is not a mindset that lends itself to long-term financial security and wealth accumulation. Of course, it’s easy to see where that way of thinking might come from. After all, what is money if not a means to buy things?
If you’d like to improve your financial situation, manage your funds better, and get your money working FOR you, rather than waiting to be used BY you; it’s time to change the way you think about money.
Mindset is Key
Believe it or not, you don’t need to be wealthy in order to build financial stability. You don’t need to own several properties to accumulate and grow your wealth. Your paycheck doesn’t need to have six 0’s either.
The first step is changing the way you think about the money you earn. Your mindset, believe it or not, has a lot to do with the results. Get out of the 55% that think money just something you use to buy things. Rather, start thinking of money as a tool.
Any tool has a use for which it was intended. In this case, money is a tool for achieving your financial goals. If it isn’t used properly, you aren’t getting the most out of it.
This is good news because it’s a relatively simple step. You don’t need to spend thousands of dollars on new education, get a new, high-powered job, or even rob a bank. Your life doesn’t need to change (although it will), your thoughts do.
Don’t Wait. Act.
Once the idea of looking at money differently sinks in, there is a need to become proactive about your finances. It’s time to take an active role in your money’s life. One of the differences between “rich” and “poor” is the mentality that surrounds those actions.
Steve Siebold, a self-made millionaire, has spent decades studying the effects of psychology and mindset on personal finances. One of the key differences he has discovered is the difference between active and passive mindset when it comes to money.
Siebold illustrates the difference in these behaviors by comparing an active mindset to what he describes as a “lottery” mindset:
‘While the masses are waiting to pick the right numbers, and praying for prosperity, the great ones are solving problems,’ Siebold writes.
Simply put, rich and successful individuals take a more pro-active approach to their finances. They seek out opportunity and look to make something happen. Those with a lottery mentality are more prone to sitting back and waiting for something to happen to them.
This is the difference between active and reactive. Many people are “reactive.” That is, waiting for an event to unfold and then managing the circumstances. When it comes to building wealth, that may be waiting for the lottery, hoping for a raise at work, or a better employment opportunity.
How often does that approach work? Not very often, as it turns out. Per an article that appeared in Forbes, the top source of wealth among millionaires is, not surprisingly, the financial sector. Other key sectors include real estate, technology, and manufacturing.
What doesn’t appear on the list of wealth creating industries? Winning the lottery.
How To Get a Handle On Things
For the 40% of Australians who say thinking about their financial future makes them uncomfortable, this can be a lot to take in. It can be overwhelming and difficult to know where to start. Thankfully, there are a few steps you can take to get on the path to success and get out of the old way of thinking.
Online budgeting tools give perspective on your current and future financial positions. If you struggle with managing your money, now you can put everything in one place and view your financial health. An important step in planning for the future is to get a good grip in the present.
Having your finances laid out in visual fashion helps you to clearly see the current state of your wealth. Online budgeting tools can further help you manage your cash flow and give you a clearer view on the steps you can take to realize your financial goals.
When you can picture wealth, it becomes easier to improve. Areas of opportunity become identifiable and are able to be built upon. Picturing your wealth is the first step toward improving your wealth. By viewing your finances as a tool to build on, you can shake the 55% mindset and start watching your money work for you.
This information is general in nature and does not take into account your personal situation. You should consider whether the information is appropriate to your needs, and where appropriate, seek professional advice from a financial adviser.