We convince ourselves of stuff. All the time. Some of it's good stuff. Sometimes less so. Some things we tell ourselves can prevent us from being wealthy. Yes, I'm saying that if you tell yourself a story about how you'll never be better off, and believe it, it can actually prevent something good from happening with your finances.
So maybe you tell yourself a different story - one where good things do happen because you save, and you get that house you want or that retirement of your dreams or that trip to Bali....well, stories we tell ourselves can become beliefs. Which become truths.
But first you have to question the story that you've been believing - and telling yourself - all along. Here's seven things that I hear people say that prevent them from getting wealthier.
1. I don't want to appear 'cheap'
I hate the word cheap. Cheap, to me, is stingy, ungenerous, and self-centered. Cheap people invite you to dinner...and ask you to bring the main course.
But frugal is different. Frugal is using one's resources in the way that gives the most benefit. It's putting thought into what really matters, and spending on that, rather than the thing that caught your eye. Frugal people are often generous - with their time, energy, friendship. I might not join you for that expensive dinner out, but I'll sure as heck cook you a great dinner.
People get hung up on appearing cheap, and less successful than they are. The problem with the idea that being more frugal is noticed and commented on by others is that it fails to take into account how self-focused the rest of us are.
I learned this truth when working in the retail industry in my early 20s. We're all too worried about how the outfit looks on us to worry about whether the jeans the woman in the next fitting room is trying on make her look fat. Same thing with spending. The likelihood that someone will notice if you keep your car a few more years and correspondingly think something negative about it? About the same as winning the lottery.
2. My savings will never amount to much
David Bach talks a lot about this in his books - how small savings add up. The reality is, savings grows. And success breeds success. Even if you can only save a little, save. You would be surprised at how fast $100 a month - just $25 a week, adds up. At the end of the year you will have $1200, not including any interest.
3. Everyone has debt
Many people do, that's true. But they don't have to. One of the biggest myths out there is that low interest debt is good to keep, especially if you can make more money in the stock market. But I've talked before about how stock market returns are 'fuzzy math'. Even Wall St. tells us that past performance does not indicate future results. Don't believe me? How are your investments doing this year?
Investing is key to creating wealth. Freeing up more income to invest will help you build wealth faster. That $500 a month car payment is not a good deal. Putting that $500 into an index fund is. Check out www.morningstar.com to find some good funds.
4. Rich people aren't generous
Really? So Warren Buffett gives less than you? How about Ted Turner giving away 1 billion dollars a few years back. Did you do that last week or last year? Yeah, didn't think so. The reality is that wealthy people give, and in larger percentages than the rest of us.
Interestingly, some research has shown that the more the wealthy give, the more wealthy they become. Maybe that karma thing really does work. http://aei.org/publications/pubID.27007,filter.all/pub_detail.asp
5. Rich people are snobs
Yesterday I talked about The Millionaire Next Door. Flip to page 27 and then come back and tell me that 'Mr. Bud' is a snob. Rich people aren't snobs. As a matter of fact, they might be your neighbor that helps you with garden tips. Money in the bank doesn't have to make you different than you are. If you like your life, keep it. As a matter of fact, one of the reasons why lottery winners typically aren't happier is that they give up the things that made them happy (like that weekly potluck with friends) when they receive their money.
6. Wanting to be wealthy (or at least well-off) is shallow
Why do you think this? Is it because you believe the pursuit of money is the root of all evil?
Or is it that the people that you have encountered with high incomes are shallow? Or you believe them to be? Did you grow up with the belief that money makes you less of a good person?
I'll admit, the pursuit of money for it's own sake is pretty superficial. And if you just want money for stuff, and you are into rampant consumerism, then I'm guessing you'll only be happy as long as you have the best of everything - which is impossible unless you are Bill Gates. But what if increasing your net worth allowed you to retire 10 years early and volunteer for a cause important to you? Is that shallow? Think about it.
7. You can only be rich if you inherit money
Actually, The Millionaire Next Door proved this not to be true. The average millionaire is first generation rich.
So if you are ready to change the story you have believed, here's 7 traits of wealthy people. Does that sound like you? Good.