- You put too much emphasis on saving – and not enough on earning
Saving is crucial to building wealth, but you don’t want to focus so much on saving that you start neglecting earning, which is what rich people focus on.
“The masses are so focused on clipping coupons and living frugally they miss major opportunities,” Siebold writes. There’s no need to abandon practical saving strategies. However, if you want to start thinking like the rich, “Stop worrying about running out of money and focus on how to make more,” he added.
Some experts say that “it’s not about how much money you make, it’s about how much you keep,” but this shouldn’t be an excuse to disregard earning completely. To keep money, you have to earn it in the first place. A common thread among millionaires is that they develop multiple streams of income and have smart savings habits.
- You haven’t started investing
One of the most effective ways to earn more money over time is to invest it, the earlier you start, the better.
“On average, millionaires invest 20% of their household income each year. Their wealth isn’t measured by the amount they make each year, but by how they’ve saved and invested over time,” writes Ramit Sethi in his New York Times best seller, “I Will Teach You To Be Rich.”
The more you can set aside, the better, even a little bit can go a long way, thanks to compound interest. An easy way to dip your toe into the investing pool is to start saving for your retirement.
- You’re content with a steady paycheck
Average people choose to get paid based on time — on a steady salary or hourly rate — while rich people choose to get paid based on results and are typically self-employed.
“It’s not that there aren’t world-class performers who punch a time clock for a paycheck, but for most this is the slowest path to prosperity, promoted as the safest,” Siebold says. “The great ones know self-employment is the fastest road to wealth.”
While the world-class continue starting businesses and building fortunes, “The masses almost guarantee themselves a life of financial mediocrity by staying in a job with a modest salary and yearly pay raises,” he explains.
- You spend beyond you means
If you live above your means, you won’t get rich.
Even if you start earning more or get a hefty raise, don’t use that as justification to give yourself a lifestyle raise.
“I didn’t buy my first luxury watch or car until my businesses and investments were producing multiple secure flows of income,” writes self-made millionaire Grant Cardone at Entrepreneur. “I was still driving a Toyota Camry when I had become a millionaire. Be known for your work ethic, not the trinkets that you buy.”
- You rarely step outside of your comfort zone
If you want to build wealth, be successful, or get ahead in life, you’re going to have to get used to uncertainty or discomfort.
Rich people, in particular, find comfort in uncertainty.
“Physical, psychological, and emotional comfort is the primary goal of the middle-class mindset,” Siebold writes. “World class thinkers learn early on that becoming a millionaire isn’t easy and the need for comfort can be devastating. They learn to be comfortable while operating in a state of ongoing uncertainty.”
- You don’t have goals for your money
Money doesn’t grow on trees; you have to work at it. If you want to eventually build wealth, you must have a clear, specific goal in place before forming a financial plan to achieve that goal.
Rich people choose to commit to attaining wealth. It takes focus, courage, knowledge, and a lot of effort — but it’s possible if you have precise goals and a clear vision, emphasizes self-made millionaire T. Harv Eker, “The number one reason most people don’t get what they want is that they don’t know what they want. Rich people are totally clear that they want wealth.”
- You spend first and save last
If you want to get rich, pay yourself first.
“What most people do when they earn a dollar is pay everyone else first,” self-made millionaire David Bach writes in “The Automatic Millionaire.” “They pay the landlord, the credit card company, the telephone company, the government, and on and on.”
Rather than spending and then saving whatever is leftover, save first. Set aside at least 10% of your gross income and make the process automatic. That way, you’ll never even see the money and you’ll learn to live without it.
- You believe getting rich is out of your reach
“The average person believes being rich is a privilege awarded only to lucky people,” Siebold writes. “The truth is, in a capitalist country, you have every right to be rich if you’re willing to create massive value for others.”
Start asking yourself, “Why not me?”. Next, start thinking big. Rich people set their expectations high. Why not $1 million?