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#002 How Millionaires Think About Money
Manage episode 275499460 series 2813671
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Do you know any millionaires? I do. If you hang around millionaires whether they have $1 million or $100 million, most of them think about money the same. It’s a simple thing but its life changing. They don’t think in terms of amounts, but percentages.
Numbers don’t lie, but they can misrepresent what is actually going on. We see this in data that politicians and large media outlets put out. They’ll give a number that sounds like a lot, but it doesn’t sound like much.
A great example is government budget cuts. The government recently said they cut out $20 BILLION DOLLARS in wasteful spending! That’s an incredible amount of money! But the government is already running a deficit (spending more than they make). So did that $20B make a difference?
That’s $20,000,000,000. Ten zeroes. Well the budget this year for the government this year was $4,450,000,000,000. So while $20B sounds like the government is really cutting out big dollars, in the grand scheme of things, if we break it down into what percentage of the budget they cut, it’s only 0.45% of the budget.
That’s the equivalent of you making $50,000, saying you’re going to cut down your spending and cutting out $225. And if you were in politics, you’d pat yourself on the back for this “accomplishment” and make commercials so everyone else knew you did this.
Let’s say every day on your way back home, you swing by your local convenience store for a bag of Skittles and a 20oz Pepsi. Well, at current prices, that will cost you about $4. So let’s say you do that 5x a week. That’s $20 a week. Doesn’t seem like a big deal, right? Now let’s look at it monthly. That’s $80. Seems a like a bit much for Skittles and Pepsi. But now let’s say your take-home-pay on a salary of $60,000/year is $3700/mo
Quote – Vices are often habits rather than passions.
We talk a lot about habits on the show. That’s because habits show what you will be successful at in the near future and left unchanged, the distant future as well! If you have a habit of eating McDonalds everyday and not exercising, you’re going to gain weight. And if you leave that habit unchecked, you’re going to have severe health issues.
Quote – “Winning is a habit. Unfortunately, so is losing. – Vince Lombardi
Every time you make an investment, don’t think about it in terms of amounts. At the beginning of your financial journey, it will feel discouraging.
Never say things like “I only made $50”. Again, that doesn’t tell the full story. Did you make that $50 on a $25 investment? That’s a 200% return!!! That’s amazing! The market average is around 9% year over year. So you are killing it!
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About the Podcast
If working a 9-5 for 60 years so you can retire with a little money and die a few years later is what you want to do, then this is not the podcast for you.
This podcast is about unique investment strategies and interviews with hi-earning individuals on how they make money so you can copy us and grow wealth too!
There's a big focus on reaching that first $100,000 net worth is one of the biggest financial milestones because you have to get their through labor, not necessarily investing.
Then, create a plan and develop habits to become a millionaire before you want to retire and enjoy the life you want instead of the one society wants you to have as a complacent consumer.
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