Developing a Wealthy Mindset

Story by: Sophie Lancaster

As a Wealth Manager, it’s my purpose to help people achieve their personal financial goals. Many people want to be rich, however, I would rather be wealthy than be rich. Richness is defined by a number, a quantitative measure. Wealth, on the other hand, is attaining a position that allows you to live your purpose. Wealth is not defined by a number in a bank or investment account, but It is defined by having enough resources to fulfill a purpose.

Our perception and mindset determine our behavior. Below are five behaviors that will help you develop a wealthy mindset.

1) Live for purpose and not for people Financial freedom is living a life free from the unreasonable expectations of others. There are many people who buy possessions that they cannot afford for the sake of status. Change your mindset! Don’t strive to wear or drive a number and don’t make sacrifices to buy expensive things that you can’t afford. Think before you buy. Ask yourself these three questions; Can I afford it? Do I really need it? Will it help me achieve my purpose? If the answer is no to any of these questions, then don’t buy it! Asking these questions and being honest with yourself will help you reduce unnecessary and impulsive purchases.

2) Be a lender and not a borrower Make it your goal to be debt-free. Avoid frivolous spending and be careful not to cosign for debt you cannot afford. If you are already drowning in debt, there is hope. The way out of debt involves discipline, dedication and action. After reducing your spending, take that surplus and split it between paying off debt and building an emergency fund. Once you have achieved your emergency fund goal, dedicate more of your surplus towards debt. Be diligent and practice selfcontrol and you will see yourself climb out of debt.

3) Live for the moment while saving for tomorrow. Just because you earn it doesn’t mean you have to spend it all. Living on 100% of your income is a recipe for disaster. Life happens! Cars breakdown, health issues arise, and unexpected expenses pop up. Try to live on 70% of your income. Over time, as you become a better financial manager and pay off debt you will be able to live on much less. A budget is your best tool. It will help you determine what you need to survive and what you need to thrive. Survival expenses are the cost for modest shelter, food, insurance and transportation. Thriving expenses are lifestyle costs that are not essential but add to your quality of life. These expenses must be prioritized in goal setting. Your budget will empower and help you prepare for the needs of your household. Your budget is not only your roadmap but it’s your GPS to guide you towards achieving your goals.

4) Giving is not an option, but a priority Giving is an essential part of our existence. It contributes to the good works that are done in this world. I recommend constantly giving at least 10% of your income to a good cause. There is a universal law that exists under the sun. It is the law of sowing and reaping. This law cannot be explained intellectually, but it works. The biggest blessing in giving is the joy you experience in making a difference.

5) Be an investor! Wisdom says invest. Investing is putting up your money for a set time to get a return. Instead of renting, you can invest by buying a house. With the same money that you use to rent, you can use it towards homeownership. As a renter, you have an expense that will never end, but as a homeowner you have an investment that appreciates in value and can be paid off. Think about that. After the mortgage is paid off, your investment will return a lifetime of “free” housing. Based on this point, I believe you should buy instead of leasing a car. Leasing provides no investment benefit at the end of the term, whereas buying will provide you ownership. Mutual funds, stocks, bonds and real estate can be used for retirement, college, legacy and other long-term goals. Investing creates wealth that will not only benefit your life, but it leaves a legacy.