Being a financial adviser, I’ve been privy to the money habits and mindset of those we would define as ‘well off’. You know, the kind of person who doesn’t need to look at the prices on the menu of their favourite restaurant. There are 2 things that determine financial success. One is your money mindset, the other is your money habits.
Your money mindset defines your thoughts and how you think and feel about money. That then determines what you do with your money.
I’ll let you in on a secret. It’s not about the income you earn, it’s about the income you spend that determines just how well off you become. Here’s an insight into what those who are labelled rich, well off, wealthy or financially successful do with their money:
1. They give instant gratification the big finger
They don’t feel the need to splash the cash to get a certain feeling. They don’t need expensive bags, cars or houses to valid their worth. They are able to keep focused on their long term financial goals and don’t feel the need to keep up with the jones or the latest Louboutins.
2. They are best friends with their accountant
They take a proactive approach to their money. Lovely, if you can’t remember the last time you spoke with your accountant or have never sat down with one…you need to. You would be surprised how many of us don’t know how much money we’re earning or spending and in order to get to where you want, you need to know where you are. Plus, who wants any nasty tax surprises. It’ll about have clarity and being proactive in your approach to your money.
3. They use a credit card wisely
Credit cards can be very costly but when used in the ‘right’ way they can be a benefit. By the right way I mean paid in full each and every month no exceptions. There are some credit cards out there that give a rewards system with purchases which can then be used to discount items or even better, get something you would normally spend more on…note…normally spend money on, for free …note…normally spend money on, for free (not that I’m endorsing you get a credit card…you definitely need discipline and self control for this one).
4. They understand the compounding effect
They know that to continue being successful with money, like any other relationship, they have to respect it. When you mutually love and respect something, that appreciation grows. The more you compound something the bigger it grows. Most people will experience this with debt, the rich experience this with investments.
5. They are disciplined in their approach
Rich people have non negotiables when it comes to their money. They are consistent in their approach to money and pay themselves first ever time! There is no slacking off this month, to pick up again every month. They automate their finances and take a set and forget approach.
So comment below, what are you thoughts?