Want To Be A Millionaire? Master These 7 Money Mindsets

10 Feb

A wealthy mind creates a wealthy life.

The path to becoming a millionaire starts in your mind first. Building wealth is a long-term commitment. Without consistency, the path to wealth will always remain hidden. No one becomes wealthy by chance.

This is why 70% of people who win the lottery go broke within one or two years of getting the money.

This tells me:

They didn’t have money before they won the lottery because of their mindset.
They didn’t have any money after they won either because of their mindset.

The problem most people have with money is not financial but psychological. They simply don’t have the right mindsets to make money work for them. So they are instead being worked by money.

To be wealthy, you need to think like a wealthy person.

This isn’t just positive thinking or some new age fade.

If you are able to picture yourself as successful, you will start to attract success. You will start acting, thinking, and adopting the habits of a successful person.

This is because your level of long-term wealth rarely exceeds the person that you are.

This is why certain clothes can make you feel more or less productive or confident. Wearing a tailored suit makes me walk taller, feel more confident, and confront challenges head-on.

All great ideas once started as imaginations in the mind.

In the words of Mike Tyson, “you gotta be the champion before you wear the belt.”

“You’re going to be an Olympic champion in attitude long before there’s a gold medal around your neck.” — Bob Bowman, coach to Michael Phelps.

1. Let Go of This Mindset First.

Attempting to keep up with the Joneses starts with a void and ends with a void. Your material possessions will not make you feel better about yourself. You can drive a nice car and still hate yourself. I know many people who do.

Remember that money only solves your money problems. The insecurities you have about yourself or thoughts of inadequacy will still be there. Money is only a mask for your problems, not an antidote.

So while money can’t buy you happiness, it can buy you time with a qualified therapist. Your wealth journey starts by solving your internal problems before beginning to acquire external success.

Many of the people who went broke after winning the lottery spent money to cover up their insecurities. Cars, parties, and expensive gifts. They spent money to buy things they didn’t need to impress people they didn’t even like.

2. Understand This Mindset Next.

It is not how much you make but rather how much you’re willing to save and invest.

A high savings rate is an investment in your freedom. By keeping cash in the bank or investing in low-cost index funds, you are slowly buying back your time.

An emergency fund will buy back your time during a crisis.
An investment fund will buy back your time during retirement.

Anything material you buy — a fancy car, a big house, new clothes — will become old news a year later. Welcome to the world of hedonic adaptation, where nothing is good enough, and your freedom has been given up.

3. Never Forget this Mindset.

“The only thing between most people and more money is knowledge,” writes Ayodeji Awosika

Learning is earning. And your skills pay the bills.

Upgrading your mind allows you greater capacity to make more money. You should never stop acquiring new skills. You don’t even have to be world-class at any one of these skills to make money, either.

Developing a unique skill stack with diverse skills will put you in the top 1% of the world. There are many writers out there, but few who can engage in public speaking with confidence as well as understand the social impact world like me.

While seemingly disparate skills, I can leverage all 3 of them to my benefit. Each additional skill I add to this stack will only further increase my value to any potential employer or client.

“Every new skill you acquire doubles the odds of your success.” — Scott Adams, creator of Dilbert Comics

4. Never Underestimate This Mindset.

Becoming a millionaire is actually kind of boring.

For most people, it required years of sacrifice and delaying gratification. Living a frugal life with a high savings rate. It is not particularly sexy in the day-to-day or even year-to-year.

But a boring investment strategy is the key to living an extraordinary life.

The investing you do systematically and consistently over time will make you wealthy. If you play with this by jumping in and out, you’ll never be able to make the most out of compound interest.

The yachts, the beaches, and the beautiful people sipping champagne are just great marketing by companies who make those things. Don’t be fooled. Most millionaires live very humble and quiet lives.

Up until recently, Jeff Bezos still drove his 1997 Honda Accord. Before that, he drove a 1987 Chevrolet Blazer. This frugal mindset is what brought him success in the first place.

“Live like no one else will so you can live like no one else can.” — Dave Ramsey

5. Emulate This Mindset.

“Better than a thousand days of diligent study is one day with a great teacher” — Japanese Proverb

We get to stand on the shoulders of our mentors and everyone else who’s influenced our domain before us.

With the internet, you can learn from millionaires across the world. How they live, how they spend, and how they invest. You can replicate many of their tactics on a smaller scale.

Despite being halfway across the world, I personally follow US YouTubers Graham Stephan, Andrei Jikh, and UK entrepreneur Ali Abdaal for most of my financial education.

When we work with mentors, we cut down the learning curve by taking advantage of the accumulated knowledge and experience they’ve gained. You would be silly not to learn from those who have already been there and done that.

“You can speed things up by actively searching for useful ideas. One strategy is to ask the top people what they do. Make their best practices your baseline,” writes James Clear.

6. Time and Money

Earn with your mind, not your time. — Naval Ravikant

You can always make more money, but you can never make more time. Your time is the most valuable resource you have. It is finite and impossible to recover once lost.

Yet, we still have this model of trading our time for money. Born of the industrial revolution where an hour on the factory floor was closely tied to an hourly output.

Create income sources that don’t require you to trade your time for money. Investing in shares or property is the conventional way to do this. But they require a higher capital investment and knowledge about the market.

With the internet, you can easily build scalable sources of income by monetizing your thoughts and ideas. Start writing on a blog about a topic you have specific knowledge on. Create videos about an area you love.

I’ve seen a podcast that talks only about radio scanners and a YouTube channel (Detail Geek) dedicated to cleaning dirty cars. There is a market for everything. Water always finds its own level.

7. And Lastly, Always Remember This Mindset

“The reason to win the game is that you can leave it” — Naval Ravikant

Learn to leave the game once you know you’ve won it. Money is a means to an end, not the end itself. You can easily find millionaires and billionaires who are utterly miserable but can’t stop their obsession with money.

Then they die. They never got to enjoy their money themselves or with the people they love. They not only robbed themselves of enjoyment but also their partners, kids, and friends too.

Understand when it is time to quit trying to make more money. At some point, the mindsets that got you where you are today are the mindsets you will have to learn to let go of. They will become a liability at some stage.

How do you do this? Start with the end in mind. What dollar figure will be enough for you? For me, it is $1,000,000 saved and invested. This will allow me to withdraw 4% per year while still being able to grow the principal.

Once I reach this goal, I’ll start thinking about other stuff. My money will continue to work hard for me. I’ve done my job climbing the mountain of financial independence; now I am enjoying the smooth ride downhill.

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Michael Lim