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The primary difference between a rich person and a poor person is how they manage fear
Five reasons financially literate people do not become wealthy:
Fear stops people from investing, and the earlier the better. Compounding interest is a powerful force. His Rich dad told him, “go big - f you lose big, it is a better story. No one wants to admit bankruptcy on a duplex.” While personally, I am a bit more risk-averse than that - I understand the sentiment. Especially, if you are young, you can afford to make mistakes. Want to open that business, go for it - when kids and families are in the picture you lose a lot of your freedom to do risky things.
It is really odd that most people are afraid of the stock market, or investment properties, but will do almost no research before buying a house. These tasks that can make you wealthy, should be prioritized so you can enjoy life down the road. If you are going to choose to play it safe, it is best to start early, that way you have as much time to get compounding interest.
You have to overcome the “sky is falling mentality”, people who say it is too late to invest often are not educated enough on the topic. For example, when most people are saying it is the “worst time to invest”, it is normally the best time to make money. No one was buying stocks in 2008 after the crash, however, if you bought near the bottom, you would have made a killing since then. Also, if you didn’t sell but just held onto your stock, you would still be up over the period.
Cynics use simple and ridiculous excuses to avoid becoming wealthy. For example, many people choose not to invest in property because “I do not want to fix toilets”. That is a simple reason you can use to fail at building wealth. Even if you don’t want to, there are other ways around having to do that yourself (look into property management, for example).
It is odd, but most of the time very lazy people fill their time with useless activities - they just operate very inefficiently. The cure for this laziness is often just a touch of greed, and putting yourself first. This greed can be a motivator to get up and do something about your financial situation. In this case, a little greed can be a good thing, as long you are not using it to hold people down, or step on them to get yours.
Overcoming Bad Habits
Rich dad believes in always paying yourself first - especially if he then did not have enough to pay bills. This gave him the motivation to get out there and do something about it. Personally, I am a bit more risk-averse than that, I make sure my bills are paid before saving, but I do limit myself to only a small portion of my income as discretionary. That way, I am always motivated to find new ways to make money.
This exercise of how to make more money is mental practice, and it is a skill we do not often practice. Something as simple as cutting needless spending truly is the same as earning more.
What I know makes me money, what I don’t loses me money.
Be honest with yourself about what you know and don’t know. Do not let pride block common sense. It is much better to ask a question than have the arrogance lose you a ton of money.
I am just a regular guy who does far to much research on financial independence and early retirement (FI/RE). I look forward to sharing my journey with you all.