Live Below Your Means A poor mindset My poor dad said, “We can’t afford that.” My rich dad said, “Rather than live below my means, I make more money to get what I want. Rather than say, ‘I can’t afford that,’ I ask, ‘How can I afford that?’” “Live below your means,” is a poor mindset because it teaches you to think too narrowly. Rather than teach you to be creative in making more money, it teaches you to be merciless in what you spend your money on. You balance the dollars you bring in from your job against your needs and wants. And no one likes finding things you can live without so you can afford something else. It’s awful. When my wife and I want to splurge on something, we don’t look at where to cut costs to afford it, we acquire an asset to offset the cost of what we want. So, instead of always looking for what we can cut to afford something, we’re always looking to expand our wealth to cover the cost of what we want. It’s a completely different mindset, and it’s the way my rich dad taught me to think. For instance, some years ago I wanted to get a new Bentley. I could have easily paid cash for the car, but I didn’t want to do that for a liability. Instead, I invested in assets that would provide enough cash flow to cover my new toy. I took a little longer, but six months later my investments were creating enough cash flow to pay for my car—and some. In the process, I got my fun car and also built my wealth. This is the core of thinking like rich dad instead of poor dad. Think like an investor or an entrepreneur. Identify what you want and work out a plan to get there in a smart way through assets. If you live within your means, you can never add assets, so you’ll never break the chain of cutting costs and budgeting to afford something. -rich dad poor dad
Posted on: Mon, 28 Oct 2013 01:57:41 +0000
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