Be honest, most of you want to join the 3.3% of people in Singapore who are millionaires right? It’s only natural to look at a guy driving around in a Ferrari 458 Italia with a woman half his age and think, “you know what, I want that too!” (By the way, that girl could be his daughter you know, just saying…)
So what separates that guy with the Ferrari from you? Well, his financial mindset probably has a lot to do with it.
If your mindset toward achieving wealth involves taking monthly trips to Marina Bay Sands (MBS), plenty of visits to Singapore Pools, and plenty of duty-free shopping at Changi Airport because you want to be the next “Changi Millionaire,” well… good luck with that.
However, if you really want to know the mindset differences that set apart the rich from everyone else, you’ve come to the right article.
Here’s Part 1 of our article 10 Mindset Differences Rich People have when it comes to Money:
Mindset Difference #1 – Creating a Financial Gameplan You Know Will Lead to Wealth
You don’t become wealthy overnight – unless you happen to win the lottery or some wealthy distant relative decides to leave his vast fortune to you (that might be a scam by the way).
No, the vast majority of people who count themselves among Singapore’s wealthy did so by having a long-term financial gameplan.
If you’re not sure what needs to be in your financial gameplan, check out this article to get a better picture of what you must do achieve wealth. Also, you can speak to a certified financial planner, just make sure you read this before you do.
Well, having a gameplan is only half of the equation. The more important half deals with putting that plan into action and sticking with it no matter what.
Mindset Difference #2 – Knowing How Much Money You Must Save
A direct result of coming up with a financial gameplan is you’ll know exactly how much money you can save each year.
Do you know how much money you save annually? How about over the last couple of years?
The rich know exactly what their annual savings rate is and how much of it will be saved or invested each year.
That gives them the flexibility to predict how much saving/investment is needed over X number of years to reach their long-term financial goals.
Mindset Difference #3 – Knowing How Much Money You Can Spend
Another result of coming up with a financial gameplan is that you’ll know exactly how much money you can afford to spend each month.
Do you know how much money you spend on utilities, dining out, transportation, entertainment, and on your “personal” expenses (yes, I’m talking about your luxury watch and branded handbag habit!)?
By finding out how much you’re really spending each month, you’ll have a better idea of what expenses you can cut, how much you can invest, and how much you can afford to smartly spend on personal expenses each month.
Mindset Difference #4 – Having the Discipline Not to Compete Over Possessions
Do you know the difference between perception and reality? No, I’m not going to dive into a long-winded speech about Plato’s Allegory of the Cave (something you definitely should read!).
What I’m getting at is this – how do you know that the rich guy with the Ferrari and home in Changi Cove is rich? He might appear rich, but his financial situation might show that he’s buried in debt and payments on everything he “owns.”
A surefire way to end up in such a situation is to get in a financial “manhood measurement” contest with someone by sacrificing your wealth on toys that are more liabilities than assets.
Mindset Difference #5 – Having the Humility to Ask for Help When You Need It
When you don’t know much about something, especially money, what should you do?
You know what I’m going to say right? Yes, you should ask somebody who knows – whether it be a friend, relative, or a financial professional (although professionals don’t work for free mind you!).
Seriously, don’t let your ego trick you into thinking you’re the next Warren Buffet. Have the humility to ask for advice whenever you run into any obstacles, opportunities, or uncertainty on your path to wealth.
Do you think this list is total BS, or do you think there’s something to these mindset differences? Share your thoughts with us on Facebook! For even more useful information on everything personal finance, visit MoneySmart today!
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