HAVE you ever wondered why so many people are challenged financially, even though they desire to be financially independent?
Or have you ever wondered why the few rich frequently get richer and the many poor more often get poorer?
Even though the overall living standards have markedly increased over the last two centuries, there certainly still exists a wide inequality when it comes to wealth distribution.
Some authorities claim that only 1% of the world’s population ever reaches the status that can be truly considered financially independent, but why so few?
Let’s explore some interesting behaviors that lead to such diverse results when it comes to money and wealth:
As I have travelled the world and had the privilege of being part of the financial education journey of thousands of people, I have frequently asked my more general public audiences: “How many of you would love to be financially free?”
Without fail 99.99% of the audience get seriously enthusiastic – hands fly up, laughter erupts interspersed with giggling and a chorus of “absolutely’s, totally’s, of course’s, wicked’s and duh’s (depending on the age group) burst forth.
But their laughter often also projects their internal tragedies and struggles associated with money.
I then ask: “So who here is either confidently on your way to being or are already financially independent?” The noise quickly dies down and hands drop like flies!
I then ask: “Which of you is ready to transform your wealth destiny and become a part of the 1% club?”
They generally point to themselves and assume that those around them are the misfortunate ones. Their response is predictable and is an expression of unrealistic expectation or fantasy.
Of course, when I present these questions to more financially savvy and adept audiences the response is quite different.
In this group, not everyone rushes to put their hand up and assume they are obviously the ones destined for financial freedom.
There are distinct personalities of the wealthy-minded who are heading for financial freedom, versus those who live in a fantasy about their future misfortunes.
So let’s look at some of the distinctions I have noticed between those who are more and those who are less likely to become financially independent:
Those who are more likely to become financially independent:
- They understand and appreciate the purpose of money and how it represents a rational means of exchanging fairly between two or more parties;
- They truly have a higher value or priority on serving ever greater numbers of people. They believe they that by delivering massive value they will be rewarded immensely, so they have their money working for them instead of them working for money;
- They are long-term visionaries that save and invest the money that flows into their personal and business lives in assets;
- They truly place value on studying, understanding and applying the principles of wealth creation and money management for the sake of their family, loved ones and society;
- They understand their financial management is a business and work on it more than just in it.
- They refine their actions to maximize the profit they are making in their lives and minimize unnecessary expenses;
- They leverage their money-making opportunities and embrace progressive levels of risks and rewards. They value themselves and pay themselves first.
- *They are more masters of their destinies than victims of their stories.
Those who are less likely to become financially independent:
- They don’t understand, nor truly appreciate the purpose of money and often have illusions concerning money’s goodness or evilness;
- They are immediate gratifiers spending their money on things that depreciate in value or fill up their liability drawer, so they work for money instead of having their money work for them;
- They fantasize about how they will spend their imagined fortunes, inheritances and lottery winnings on fancier lifestyles instead of strategizing, structuring and managing money to make it grow and work hard for them;
- They don’t truly have a high value on serving ever greater numbers of people;
- They expect entitlements in their life – rather than empowering themselves financially and being dedicated to delivering massive value;
- They put less, little or no value on studying, understanding and applying the principles of wealth creation and money management;
- They are not refining their actions and spending consciously to maximize their profit and minimize their unnecessary expenses;
- They fear financial risks and leveraging and withdraw to the assumed (false) security of “safe” saving and investing;
- They devalue themselves and pay themselves last;
- They are more victims of their stories instead of masters of their destinies.
When I have asked those who feel financially strapped what they would do if they suddenly had a substantial sum of money, their answer is usually that they would enjoy spending their money on stuff.
The answer is very rarely how they would make their newly acquired money grow and work hard for them by saving and investing. People who are unlikely to be wealthy are spenders – not savers.
When I asked those who feel more financially free what they would do if they all of a sudden came into such a sum, their answer is invariably how they would assure that their wealth pot is filled with assets and how they will manage it and make it grow, preserving the capital and feasting of the money their assets make for them.
Wealth Chefs and money cooks have different hierarchies of values and mindsets:
Wealth Chefs value and understand money more. They see, create and attract ever greater opportunities to grow their wealth.
Wealth Chefs manage money wisely and so receive more to manage. Money cooks manage it poorly, receive less.
Money automatically circulates through the social economy from those who value it least to those who truly value it most.
Ultimately, the rich get richer and the poor get poorer. But nature has its inherent way of balancing the economic game.
As the wealthy become really wealthy, there emerges from within a desire to contribute, to give back.
Meanwhile, the poor develop a greater feeling of entitlement and rely on government handouts and charitable contributions to survive.
Ultimately nature recycles the wealth through time to give everyone the opportunity to master the art of wealth creation, which is truly a state of mind.
We all must make the decision of where they want to play in the game of wealth – at the top, the middle or bottom.
We have a choice on where and when we want to place ourselves in this magnificent financial game.
Where are you choosing to play?