Posts Tagged ‘winning attitude’

Perceptions of the Wealthy: Learning to Think Like the Rich

Our view of the world is colored by our perceptions; our perceptions are colored by experience; our experience is adulterated by media influence. The secret to financial wealth is between the ears. How you think has as more to do with wealth creation than hard work. It is possible to work hard and accomplish nothing useful. Only with the correct mindset is value created.

Tony Robbins is fond of saying, “The past does not equal the future.” I think he is right. The average man or woman spends too much time worrying about every failure they experienced in life. Moving from mediocre to significance requires burying the past: the good and the bad. Past success isn’t good enough to ride on and failure doesn’t define you unless you allow it to.

There are only a few seemingly minor differences between happy, well-adjusted, successful, wealthy people and the masses. Believe it or not, wealthy people do NOT consider money their most valuable asset; time is. Money can be lost and having money always requires investing it or burying it in the ground. Both options carry their own unique risks. Rich people know money is easily replaced. In a world of fiat money (issued by decree) the government just prints more when things get tight.

Time is another issue. Whereas, you can always rebuild from a failed financial venture, time wasted is never recovered. The best one can hope for is a learning experience applicable to future endeavors. The financially successful of our communities know every moment should provide value. Sleep nourishes, quiet time allows for reflection, work feeds the soul and reading feeds the mind.

The Neighbors You Keep

I worry at times the FIRE (financial independence/retire early) community will implode. The group is diverse with people from all walks of life. Jealous and selfish people have plenty to gain by harming the movement. Perceptions are all important.

Think of a new friend you meet at a financial conference. You hit it off and share stories. You feel a strong affinity with your friend until you are shocked to learn she has AIDS. She never changed, your perception of her did. And that is wrong. If she was a nice person to talk with, she is still a nice person even if you learn she has a disability or disease.

Judgmentalism is a damning disease that destroys everything around it. It is so easy to judge others. The Bible even has a verse warning of such behavior, where Jesus preaches to take the beam from your own eye before the sawdust from your brother’s. (Matt 7:3-5)  Many religions warn against judging other as it leads to you being judged.

Walls are easy to build; near impossible to tear down! It is easy to stay within your own comfortable group. But if you are well on your way to financial independence, you need to share with people beginning their journey. Most people would rather continue their foolish money habits. Those who come to camps, meet ups and conferences (FinCon and the various FI camps around the world as examples) are eager to learn. Sticking tight to your click encapsulates your knowledge and experience. Only with open arms can they learn and grow. In fact, the only way for you to move another step higher is to share your experience! If you stagnate you risk tumbling back down the hill. It’s happens faster than you think. Billionaires have gone broke!

We can also judge people by where they live. Our initial impression is shattered when we discover our new friend lives on the wrong side of town. Once again, nothing changed except your perception.

Let’s hit closer to home. Your favorite accountant lives in a sleepy part of a quiet state. Yet, in this quiet neighborhood, the district attorney in the county where my office is planted went to prison on federal and state charges of bribery. A few of the convictions were overturned; most were not. Justice went astray for a long time in my community.

More recently, the district attorney in the county I live was booted out of office. His wife was accused of activities which could be construed as federal felonies! People get sick of that behavior from elected officials.

My county has a long history of poor behavior. The drama of the Netflix documentary, Making a Murderer, took place seven miles from my doorstep! To make matters worse, one of the key players in the investigation, Mark Weigert, is now running for sheriff and is likely to win! You can watch the documentary where Weigert gets a 16 year old kid, Brendan Dassey, in a secluded room and grills him for hours without his parents or an attorney present. Dassey has an IQ of 73 and a verbal IQ of 69 according to the documentary. Making a Murderer is chilling to watch. How anyone can take pride in cracking a kid with a low IQ is beyond me.

If we saw this happen in a third-world nation we would be up in arms. Since it happened right here in the good ol’ US of A we stand in stunned silence. Do we hate everyone from Wisconsin or my county? I sure hope not! Every community has things it would rather not talk about. Once again, we shouldn’t judge people without knowing all the facts. (And you never have all the facts.) Judging someone on a past fact diminishes you and invites others to return the favor.

Perceptions can cost a community or individual. Poor choices a lifetime ago can extract a current cost if you allow it. Perception has a powerful hold.

Wealthy people make mistakes all the same. The only difference is that they don’t allow perceptions to derail their aspirations. Never allow someone else’s perception to alter your focus. Lesser people will always want you to quit. Winners don’t do that!

Your Most Valuable Asset

While average people are concerned with the perception people have of their work ethic, status and affluence, the wealthy are laser-focused on the most valuable asset anyone possesses: time.

Warren Buffett, Bill Gates, Elon Must and Jeff Bezos all have the same amount of time each day as you. What each does with that time determines the level of value created. Create massive value and financial wealth is sure to follow.

When you are more concerned with the actions, past and present, of other people, you are allowing your perceptions to be twisted. This will make you average, mediocre. Your desire for all the benefits financial independence brings will be derailed because you allowed your precious time to be wasted by unimportant dramas.

Tony Robbins is right, the past and future are only loosely connected. Past mistakes mean you tried. That’s more than you can say for most. Mistakes do not define you; how you handle them does. If you quit because you’re worried what others might think, you rob the world of your talent and experience! All the time invested learning those skills is squandered. You have wasted the most valuable asset any human being possesses. Rich people don’t do that.

If your dreams involve early retirement (retirement at any age) then you must use your time wisely. Business ventures will fail. Ideas that sounded good at the time will fall flat. Screwing up is not the problem. Never screwing up is! The only way to never screw up is to never try. If you never try, all you have is delusions of grandeur.

Carry It with Pride

I don’t walk around telling people my net worth. Money is a score card for determining value created in my practice. As much as I avoid talking purely money, people tend to come to the conclusion quickly I have a significant financial pot of goodies.

People develop a perception of me fast. The same happens to you. Then the gloss wears off. My human side is exposed, warts and all, and the weaknesses and failures are revealed. Business ventures that ended with a dead thud remove the illusion, the perception, everything I touch turns to gold. (I butchered that goose a long time ago for stew meat.)

Successful people make mistakes. Big ones! It comes with the territory. You’ll also notice the failures don’t distract the successful from the true prize.

Elon Musk is a modern example. He made a fortune with PayPal and instead of sitting on his hands he risked it all on SpaceX, Tesla, Solar City, and now The Boring Company. Any one of these ventures could cost him his financial fortune.

But Musk knows money is not real wealth anymore than the scorecard in a bowling game is skill. Value must continually be created! He had to risk it all to do something of real value. His rockets are unique in their performance. Nobody has anything like it. Automotive manufacturers told us electric vehicles were not a viable option until Musk made it a reality. Now the simple-minded are playing catch up.

I don’t encourage mistakes. They happen easy enough on their own. But you should own your mistakes. Wear them with pride. They are a reminder you are human and remain motivated to create value. Scars are a badge of honor. When they lay you to rest, pray your skin isn’t smooth and soft. Pray to be covered in scars of experience. Yes, it is painful. But it is the only way to live life with meaning.

Our Deepest Fear

I’m going to close with a quote from Marianne Williamson:

Our deepest fear is not that we are inadequate. Our deepest fear is that we are powerful beyond measure. It is our light, not our darkness that most frightens us. We ask ourselves, Who am I to be brilliant, gorgeous, talented, and fabulous? Actually, who are we not to be? You are a child of God. Your playing small does not serve the world. There is nothing enlightened about shrinking so other people will not feel insecure around you. We are all meant to shine, as children do. We were born to make manifest the glory of God that is within us. It is not just in some of us; it is in everyone and as we let our own light shine, we unconsciously give others permission to do the same. As we are liberated from our own fear, our presence automatically liberates others.

I can’t say it better.

 

More Wealth Building Resources

Personal Capital is an incredible tool to manage all your investments in one place. You can watch your net worth grow as you reach toward financial independence and beyond. Did I mention Personal Capital is free?

Medi-Share is a low cost way to manage health care costs. As health insurance premiums continue to sky rocket, there is an alternative preserving the wealth of families all over America. Here is my review of Medi-Share and additional resources to bring health care under control in your household.

QuickBooks is a daily part of life in my office. Managing a business requires accurate books without wasting time. Quickbooks is an excellent tool for managing your business, rental properties, side hustle and personal finances.

A cost segregation study can save $100,000 for income property owners. Here is my review of how cost segregation studies work and how to get one yourself.

Worthy Financial offers a flat 5% on their investment. You can read my review here. 

Tough Times Make You Rich

Berkshire Hathaway Inc. held their annual meeting this past weekend. Warren Buffett noted some of his failures over the previous decades (missing Amazon, for example) and Charlie Munger added Google as a big miss. Both men agreed they’d continue missing many opportunities in the future. Buffett and Munger made it clear they learn more from their mistakes than from their successes. They felt winning was a poor teacher as it fooled people into thinking they were right.

Steve Jobs had some Syrian blood and was raised by adoptive parents. Armed with only this information it would be hard to imagine a path that would lead to Jobs creating a company which would become the largest on the planet by the time of his early death at age 56. The odds were stacked against Jobs, yet he rose above the travails and changed the world.

Elon Musk was born in South Africa. His parents divorced when he was nine. It would be hard to see a path for this young boy where PayPal would be part of his future followed by SpaceX, Tesla, Solar City and a growing list of additional companies.

Tough times. We hear about them all the time. Rarely is found a successful person who doesn’t have baggage in the closet. Show me someone who never had problems and I’ll show you someone who is mediocre. The exceptions are exceedingly rare.

Yet, most people have hard luck stories in their past. Why does a difficult time in life, especially early on, define so many successful people? And why do people with the odds stacked in their favor frequently end up average at best?

When the Going Gets Tough

Everybody has those days. Steve Jobs was raised by adoptive parents and later lost his company only to get it back and send Apple to heights no corporation has ever scaled before. Yet so many people fold when difficulty arises. One abused child grows up and does incredible things while another ends up in prison, a product of her own demons.

Buffett was right; mistakes, and how you deal with them, define who we are. Tough times should not be feared! Tough times are an opportunity to build character and learn. When life is roses we tend to party because we delude ourselves we know it all. A bat to the side of the head has a way of focusing attention.

Failure motivates. Winning in a must-win situation requires drastic actions.

Cortez, when he arrived in the New World, ordered his men to burn the ships. Cortez knew it had to be done. His men were outnumbered in strange new world. If there was an option of retreat his men would eventually find a reason to take it. Cortez knew the only way forward was to remove any possibility of retreat.

Tough times are like Cortez burning the ships. Think back on times in your life when things were really bad. I bet you had little to no control over the situation. It was bad and you could not see a way out, at first.

What changed? Maybe you faced the death of a loved one or divorce. Worse, maybe you were abused as a child or a battered wife. You felt helpless and out of control.

The ancient Stoics knew what to do. Epictetus taught us to let go of the things we do not have control over. Since the only things we can control is how we interpret a situation and how we respond in our mind. A child suffering abuse cannot control an evil parent. All they have is what is inside.

I wish no one such a tragedy. Learning from tough times is one thing, but it doesn’t have to include abuse. But it happens. It happens to prisoners of war; it happens to children; date rape happens among so-called friends; divorce and death of loved ones will happen. Not might happen; will happen. And there is not much you can do to prevent it. If cancer is going to strike, it is going to strike. Your only recourse, your only control, is your head. Only you decide what goes on there.

Small Examples

I throw around household names, yet there is an endless supply of examples in your own community. I bet if you look behind the curtain of successful people in your community you will find terrors. The abuse shelter is run by women who suffered abuse. They can’t change the past, but they can do something about the present. A police officer suffered a terrible crime as a child; the wealthy businessman was so poor as a child she sometimes missed meals. These people suffered to such an extent that it left a scar, a scar so deep it defines who they are today.

My own story is one of growing up in poverty in a very rural community. After the family farm was gone my dad had a business fixing agricultural equipment. Those early days were scary. One day my dad kissed my mother good-bye. I heard him tell my mother he did not have enough gas to get back home if he did not make a sale that day. There were no other options. He sold one link in an industrial sized chain for $50. My dad returned home that evening. His business grew well into the seven figures in sales and a modest number of employees year later. But it started from great tribulation.

That day has never left my mind. It was 34 years ago. In my mind there is no other option, the ships were burnt. In my mind there is no room for quitting. No retreat. We all run from our pasts and I run quite well from mine. Once we know a man’s story we start to understand why the man is as who he is. Only then can we empathize.

Your Success Story

What about you? Do you struggle with money? Relationships? Retirement? The reason could be things were never tough enough on you. When things go good all the time it is easy to delude ourselves we can run up the credit card bill and afford gas-guzzling SUVs. The problem with having the great job from an early age without risk of unemployment is that you have no incentive to change. Sure early retirement sounds nice, but things are pretty good as they are so you settle in at mediocre.

But who wants to be mediocre? Your dreams can be much smaller than those of Steve Jobs or Elon Musk. Changing the world is one thing; changing the life of your significant other and children is certainly a worthy goal everyone should have.

Yet, with life all roses, you stick to the old plan of long work hours in a job you despise. You miss the kid’s baseballs games and other school events. You are miserable inside, but this is not tough times, my friend. Tough times are more than just a mild inconvenience.

Artificial Tough Times

Tough times might be the ticket to higher levels of success, but who intentionally encourages tough times? A crazy man, that’s who! You don’t have to shoot yourself in the foot to gain the benefits and lessons of tough times.

I want to show you how to do an exercise called negative visualization. It’s nothing bad or harmful. What negative visualization does is allows you to see the worst possible outcomes and helps you deal with these possibilities. Once you are done with the exercise you will be refreshed knowing these bad things didn’t happen to you and if they ever do you have nothing to fear.

When I negatively visualize I do it in a quiet place so I am not disturbed. This works best when there is plenty of time for you to work through the exercise without interruption.

You can lie down on a bed or couch (my preferred method) or sit lotus-style with hands on knees. Close your eyes and relax. Steady your breathing. (You can also do this while taking a walk or running or clipping lawn, et cetera, anyplace where you can think uninterrupted.)

Each session should include only one issue. For example, imagine the death of a spouse, parent or child. Other things to visualize are poverty (loss of possessions) or disease (cancer, et cetera).

With your eyes closed and your breath steady, imagine the loss of a significant other. Really dig deep. What would you do? See it. Walk through the process. This takes time. Something as deep as the loss of a spouse can take an hour or longer and more than one session. The loss of a job might take less time unless job loss is imminent.

The important part is to really feel it. Your brain can learn from imagined hard times as well as real-world tough times. The deeper you feel it and internalize it the better. When you are done you should feel grateful you are so lucky as to have your spouse, job, heath. You also have the experience of the loss. The pain, if it is really felt, allows you to mentally burn the ships so there is no option of retreat.

We spend our lives avoiding the unpleasant. If we are really good at it and really lucky, we may never face many tribulations. This is a double edged sword. Living an awesome life is the dream, but a life too good all the time takes away the flavor or incentive to reach for more.

You must do this. Negative visualization helps us cope with serious issues when our minds are not under the stress of the actual situation. No matter how awesome your life, family members will die, disease will intrude, accidents will happen. By preparing now you give your mind the power to cope when the inevitable happens.

Tough times happen to all of us. It has nothing to do with how good a person you are. Job loss happens, businesses can and do fail, loved ones get sick and we all die. A few moments in quiet contemplation now can give you the strength to handle those moments of crisis. And by creating artificial tough times you will have reference points to motivate you to do what you know you must do.

You are the solution.