How to develop a MONEY MINDSET

In this article I want to give you simple steps how you can create a money mindset.

By creating a money mindset, you start to take control of your financial future by improving your financial intelligence.

If you start to take control of you future, you will be able to to create more opportunities for yourself.

And with more opportunities you will be able to make more money and create a better life for you and your family.

It is not about chasing money and getting rich for the sake of money.

I talked about this in another post where I list the negative effects if you start to only think about money and start chasing it.

What is the MONEY MINDSET?

The money mindset is simply put: shifting your mindset towards money, understanding it and learning how to take advantage of it in order to reach your personal goals.

It is about the creation of financial stability in order for you to have the freedom of choice.

In order to create the money mindset you need to get rid of all your old believes, such as “Money is the root of all evil.”

If you want to create a Level-10 life you will need to embrace money.

Step 1 – Understanding Money

The first step to changing your mindset about money, is to understand what it actually is: Money is a tool.

Reduced to its simplest form, money is just a number printed on paper. A number display on a screen in your bank account. The value of money is purely based on how much trust you put in it.

Money is a tool that will take you wherever you will but it will not replace you as a driver.

As Sara Blakely puts it..

“I feel like money makes you more of who you already are.”

– Sara Blakely, CEO of Spanx

I am sure you came across statements such as “Money is the root of all evil” or “Money will not make you happy”.

Money itself won’t make you happy. That is true. But having no money will not make you happy either.

A lot of times you will hear people saying that, who actually don’t have money at all. They simply try to justify their own situation.

In order for you to make more money, you need to get rid of the mindset that money is something unimportant and evil.

Because this is not true. Money is just a too. Embrace it and learn to make use of it.

One of the greatest games that teaches you the mindset of money is Monopoly. This game demonstrates perfectly that money is just a tool. It helps you to buy property and houses. These houses generate money every time someone visits your property. Over time, it generates enough money that it can be turned into a hotel, which creates even more money.

Which brings me to the next point…

Step 2 – The MOST IMPORTANT rule about money

So, monopoly teaches that you make more money by buying more houses and turning them into hotels.

But why is not everyone doing this?

For about 95% of all people the following scenario matches: They work harder to climb up the career ladder. They switch companies to increase their salary. They are chasing promotions.

There are two problems that I see with that approach:

1. With each promotion, expectation and responsibility rise exponentially whereas salary only linearly.
2. There is a limit how much you can earn as an employee. Even for a high ranked manager, it is very unlikely that you get paid a million $ a year. 100k is already out of reach for most people.

Therefore the rule #1 when it comes to money is:

“The rich don’t work for money.
They let money work for them.”

To make more money, you need to stop thinking like an employee and chase promotions.

You need to start thinking like an entrepreneur and increase your own value.

Increase your financial intelligence by acquiring skills that increases your value and helps you to make more money in the long run.

Step 3 – Understanding our financial system

In order to develop a money mindset and understand why you need to focus on building wealth, you need to understand how our financial system works.

I’m by no means a financial advisor but these are economic basics that everyone should know:

The turning point of our financial system is the year 1971. On August 15th 1971, president Nixon took the USD off the gold standard.

As a result, governments could start to print money as much as needed to stimulate the economy. This, of course, let to central banks around the world totally overseeing transactions and steering the economy in any direction as they pleased.

The impact?

Interests rates decreased, everyone started to borrow more money, the stock markets went up, rich people got more wealthy, prices went up, salary didn’t increased and poor people got more poor.

That is why Cryptocurrencies are currently on the rise because they circumvent the middle man (the banks) and create a decentralized financial system where transactions between parties are directly performed.

Because banks are continuing to print money, it therefore exists in abundance, yet is not equally distributed. If the entire money would be distributed equally, EVERYONE would be a multi millionaire today.

As a result: everyone CAN get rich but not everyone IS. Only the ones who know to leverage the power of money.What can you do?

Great, above you already got familiar with the concept of money and why you shouldn’t be chasing promotions only for the sake of money.

In order to create a life of abundance you need to master 3 simple rules.

1) How to make money

You need to get rid of the employee mindset and develop an entrepreneurial mindset.

In order to make more money, you need to move from being a consumer to becoming a producer. Start with something small that you can work on next to your day job. Here are 15 Ideas of Side hustles To Make Passive Income.

Checkout my other article to the learn the differences between the mindsets: Why you need to get rich. You will get a better understanding of where you are and where you need to go in order to make more money.

2) How to keep money

After you learned how to make money, don’t spend it immediately. To learn how to keep your hard earned money, you need to get away from being a consumer. If you spent all the money that you earn, you will never become wealthy.

When salary arrives, many people tend to spend their cash an acquiring liabilities. But liabilities with not make you wealthy. Checkout my article where I explain the differences between and asset and a liability: Create assets and stop acquiring liabilities.

3. How to multiply money

And once you create a stable stream of income, learn to reinvest the money by repeating the process.

If you follow the process, I will be well on your way to financial freedom.