Last week we began a series on the importance of thinking and planning out your financial goals for the year 2021. We highlighted planning for your retirement and some of the critical considerations. Today, I want to share about your money mindset and some of the myths and ideas which have impeded your success over the years. Let’s start with some money rules for 2021.
Wealth! Seems like a pretty noxious goal or concept. The problem is that most people walk around talking about being rich and have been socialized to view things through the lens of being rich. Who cares about being rich? Becoming wealthy is an intentional process. I know lots of “rich” people who are broke! You have to actually sit down and decide for yourself, what your definition of wealth is. I mean, the question is how do you know when you are wealthy?
Are you wealthy when you are living off your investments or living off your capital? How about, are you wealthy when you are living off the interest from your investment? You may define wealth as having enough so you don’t have to worry about having enough. For me, I would consider myself wealthy when I’m living off the interest from my interest! Now that’s a high standard of wealth and you may not want to set that standard for yourself, but that’s the point. You must sit down and establish your definition of wealth. Rich people go broke. Wealthy people generally don’t!
Setting Expectations or Goals?
Now that you have figured out your definition of being rich or wealth, how and when are you going to get there? Are you going to get there before age twenty-five or fifty? Are you going to retire wealthy? Besides the when, you have to be realistic, honest and true to yourself in figuring out the how? Now depending on your definition of wealth, you’ll never get there working a nine to five or as a wage earner employee type of job. You may receive a great salary with benefits and then run into Covid-19 then what? Or you may receive wonderful salary benefits, travel and other perks, and then to find out that after twenty years of commitment, your services are no longer needed. You were comfortable but not rich or wealthy. Therefore it is incumbent upon you to determine your how and when you plan to get there.
You may have a religious ideology or philosophy in which you believe. The same may be true when it comes to money. Some of the myths and money beliefs that people have are, “money is the root of all evil,” “money is only acquired by greedy and dishonest people,” “the more you have, the more you want,“ and “you can’t have money and be spiritual” or “money corrupts.” Where did these belief systems originate and have they been holding you back from financial success? If you’re to become successful in 2021, some if not all of those myths should be eradicated and replaced with responsible stewardship principles like “the rich rule over the poor“ and “the borrower is slave to the lender.”
Why be Wealthy
We all want more money and to be wealthy but what’s the reason? Someone who is a drug addict may want more money to feed their habit. Some people want to become wealthy because of their past lived experiences, like growing up poor and thus vowing never to go back to that lifestyle. Or, maybe they want to be rich to provide for their kids. One reason why it’s important to know why you want to become wealthy is because in the case of the drug addict, the questions are: is money the solution to your problem? And, do you believe becoming wealthy is going to cure your addiction?
Secondly, when you know why you want to become wealthy it may propel you into thinking about alternative ways of solving that need or problem. Now while you’re thinking about why you want to become wealthy, consider all the things for which you don’t need additional wealth. If you need to become wealth in order to acquire additional shoes, dresses, or even cars, check yourself! Will additional shoes, dresses or cars increase your wealth or value? Do you want to become wealthy to change underserved communities?
Why are we focusing on money rules today? Because if you haven’t noticed, money doesn’t come with instructions! Most things you acquire in life come with instructions. If you purchase a vehicle or piece of equipment, there’s a manual or some set of accompanying instructions. If you purchase a pair of shoes or article of clothing, there are usually instructions concerning how to wash or polish the item. However, when it comes to money there are no instructions on what to do with it. Knowing how to spend, save or invest is why you need money rules!