Creating the Right Mindset for Financial Freedom
“If only I were rich.”
How often have you found yourself thinking this? How often have you fantasized about the security you would have, the projects you would start, or the causes you would support, if only you were rich?
Financial security can sometimes feel like a birthright, something that those born without it can only get if they wish upon a star. But this is America. Someone who is rich today could be poor tomorrow. And someone who is poor today? Well…
For someone who is poor (or feels poor) today, there is nothing stopping you from taking the steps to get rich. The great obstacle is knowing those steps. What are the steps to getting rich? Well, there are many get-rich-quick schemes that pretend to know the answer to that question.
The truth is that it all begins with your mindset. If you want to liberate your bank account from debt, begin by liberating your mind. Doing that starts not with acting rich but thinking rich.
How Does one “Think Rich”?
Consider how the wealthy handle their money. Or rather, consider how the wealthy handle their money when they’re good at handling their money. There are plenty of wealthy people who rely on tricks, nepotism, and other dishonest means to secure their wealth.
You can’t rely on these things. Not because it’s dishonest, but rather because they can bear the burden of getting caught. You cannot, so it’s better to discount the risk altogether.
Always remember that your goal is to pay your debts and secure funds for emergencies. The people who use dishonest means to make money are usually people who already have money, people with a pathological need to make money.
Since your needs are more practical, your methods should be too.
Your method must be to take the hard road of investing wisely. Wealth in this country is less often the result of individual genius. That is the myth, obviously, but that myth is a predatory lie.
Wealth in America is the result of learning a magic trick: The trick of turning one dollar into two dollars. And the magic wand that catalyzes that spell is Wall Street.
To “think rich”, you must think of Wall Street as yours. You must accept the notion, however ridiculous it may seem, that it is a beast you understand and can tame. You must imagine it as predictable. Obviously, it’s not predictable. Its symbol is a great, uncontrollable, brass bull.
Bulls Aren’t Known for Being Predictable
And yet Matadors fight bulls and win all the time. They don’t do this by perfectly predicting how the bull will move or act. Were that possible, there would be no artistry in bullfighting. They, like you, must develop their instincts to feel how their quarry will behave.
“Thinking rich” means treating your bank account like a stockbroker treats their portfolio. You have less to put into the market and more to lose. But the advice here is not “Go to the roulette wheel and bet it all on black.” Far from it.
Start with the lowest-risk investments you can find. Low risk means low reward, but it also means low consequences if you fail. “Turning one dollar into two dollars” might have sounded like a metaphor, but really, it’s the ideal way of practicing the stock market.
To aim too high in the stock market is a mistake. Looking for a big payout, as if the stock market was a slot machine and investment was its lever, is a poor person’s outlook on money. Rich people act, think, and indeed invest as if they have all the time in the world.
One Dollar is now two Dollars. Now What?
If you can turn one dollar into two dollars, the next step is to turn two dollars into four dollars. Don’t get the wrong idea: The goal of this exercise is not to simply build your investing skills, multiplying larger and larger sums of money till you’re rich.
After all, if turning one dollar into two dollars was easy, then why not dump all the money you have into the investment that yielded you that result? Because there will be investments you make while you’re still learning that don’t yield that result, and you don’t want to overcommit.
Rather than overcommitting, what you want is to develop a fund of “free money”.
Imagine that in your first week of investing you turn one dollar into two dollars. You now have one dollar you didn’t have before. This dollar is “free”. You got it by the natural movement of the stock market, rather than by your own time or labor.
Then imagine you do the same thing the next week. You turn your free dollar into two free dollars. Then two becomes three, three becomes four… You get the idea. “But,” you might wonder, “what am I to do with a few measly dollars, however free they are?”
You Start Making Yourself Secure
Being able to turn one dollar into two dollars means that any one dollar you save becomes twice as valuable, if not more. After all, you aren’t looking to buy a bank. You aren’t looking to turn around and bet it all on a roulette wheel. You’re looking to pay your debts.
How much more free would you be if you could double some small section of the money you have? If, instead of working for every dollar you had, you had that money delivered to you by the natural currents of the stock market?
It all starts with making small, safe investments over time to establish that security fund.
It might seem small, but it’s free. Once the money goes from the stock market to your pocket, it is yours to keep with no strings attached. No debt collector can take it unless you give it to them.
It won’t happen fast. But you have all the time in the world.
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