People everywhere live far below their potential because they are often ignorant of or simply accept how our society engrains into their minds a mentality that is detrimental to them achieving their goals, dreams, and potential. We can become and accomplish anything, but the first necessary step to accomplishing our goals is changing our perspective, and not accepting what society defines as normal, acceptable, or successful.
Changing our mentality about money, education, and our careers
Perhaps the goal of getting out of debt is far more than just creating a budget, cutting spending, or saving money. Getting out of and staying out of debt actually entails changing our mentality about money, education, and our careers. The goal, thus, should not just be to get out of debt, but to create financial independence. This can be achieved by applying the principles below:
1. Money is NOT Evil
Money is not the ‘root of all evil’ … it is the pride, condescending attitude, and selfishness that people develop from obtaining money that causes others to perceive money as being ‘evil.’ Contrastingly, money has been and continues to be used as a great tool for good in this world. Money is necessary for our daily survival, and excess money can also free up our time and resources to help other people.
Thus, what we need are fewer people going into (and staying in) debt, living paycheck to paycheck, and becoming content with mediocrity; we need many more people who become wealthy and use that wealth for good in this world. The more people who accumulate debt, the more people will become prone to wrongfully assume that money is ‘evil’ and condescend (pride looking up) upon those with money, many of which are able to enjoy life more, provide better for their families, and help many more people… because they don’t see money as ‘evil.’
2. Being Wealthy vs. Appearing Rich
Another way to say this is: Having assets that make you money vs. being in debt! Wealth is defined differently by everyone, but true wealth is financial independence and creating passive income. Being rich, comparatively, often means earning substantial amounts of money, owning material possessions, or having large bank account balances… accompanied with large amounts of debt. If you make 1 million per year, but have 1.2 million in expenses, you are not wealthy (or rich) at all. Having a fancy car, large house, and expensive clothes is nice, but the loan, mortgage, and credit card debt often associated does not classify one as ‘rich.’
True wealth is owning assets (not depreciating liabilities) that make you money, not spending 80+ hours a week in an office. Wealth is creating passive income, not trading time for money. Wealth is a result of taking a risk, not living paycheck to paycheck. Wealth is a state of mind and a result of hard work and mental reconditioning. (And here’s a little secret: most people who obtain wealth eventually become the owner or self-employed, not remain as the ‘employee’). The reason that the majority of people are in debt is that they are trying too hard to appear rich, rather than managing their finances in a way that creates wealth. In other words, they are spending more than they have, accumulating ‘things’ and depreciating assets, not saving money, and not spending with cash because they keep borrowing DEBT to appear ‘rich.’
3. Eradicate Excuses, Myths, & Misconceptions
Stop listening to society’s definition of what determines your success and potential. Your potential is NOT measured by a GPA, a standardized test score, educational institutions attended, degrees obtained, work experience, titles held, social connections, family heritage, or even the color of your skin to the anatomy of your body. What are the other excuses you believe that keep you in the rut of poverty and debt?
What misconceptions and myths do you ignorantly continue to hold on to, that are false? Perhaps you believe the fallacy that you need money to make money? So given the fact that you are on this blog might suggest you are in debt, so you don’t have money to make money … right? Wrong! The reality is that we can become and accomplish anything; or, in terms of finances, we can get out of debt and earn as much as we desire. Our potential is created and determined by ourselves. And yet, most people are not ignorant of this reality, they just simply are unwilling to put in the work necessary to achieve success – or wealth! The secret to any goal (even that of getting out of debt) is: desire, belief, hard work, and persistence.
4. The Great Flaw of our Educational System
From day one, we are taught to study hard, get good grades, graduate from high school, go to college, get a degree, find a good job, and then work for 40+ years as an employee of a great company. Don’t get me wrong, I am absolutely an advocate of education and working hard (be it for grades, a degree, or a job). But, gone must be the days where society and the ‘system’ dictate our course, define our potential, and determine our success. There is a distinct difference between getting a degree and educating ourselves (most don’t do the later).
Never forget that despite the degrees earned, despite the GPA’s, and despite the schools attended – we create and determine our own potential. This is what our educational system fails to teach! Whether you are a high school drop-out or a Harvard graduate, education is absolutely important; but, the ability to achieve a dream is equally possible for the high school drop-out as it is for the Harvard graduate. What often differentiates the two comes down to: desire, belief, hard work, and persistence.
5. Typical Employee Mentality
One of the quickest and surest ways to get out of debt is by eliminating what I call the ‘typical employee mindset.’ What is this mindset? It is thinking in terms of 9-5, manager and employee, weekends and holidays off, that is not my job or responsibility, and doing just enough to keep the job. Getting out of this mentality though requires one to do more than they are paid to do, to think and be different, to take risks, and to put forth action.
Because taking such action is hard, most people (employees) become content with mediocrity, continually trade time for money, live paycheck to paycheck, remain in debt, believe that job security is actually security, think that a pay raise or promotion is the solution to their problem, and convince themselves that an IRA or company-matched 401(k) is the road to financial independence. This detrimental mentality limits one’s ability to earn substantial amounts of money, and keeps people in debt because the paycheck to paycheck is not enough (especially when an emergency hits, which when that time comes, debt is often used to pay such bills, which continually perpetuates the debt problem).
6. Change Your Mentality About Retirement
Our culture’s unfortunate perception of retirement entails working hard for 40+ years, trading our time for money in hopes of promotions and pay raises, trusting complete strangers to manage our retirement accounts, and sacrificing pleasure now in hopes of
living our dreams in years to come. Yes, the goal should be to build a 401(k), IRA, Pension, or savings account, etc. But, there is a difference between retirement and financial independence – and financial independence should be the goal (long before the age of 65).
This does not necessarily mean you have to be an entrepreneur, quit your job, and be self-employed. What it means is you need to think in terms of: saving money and spending less with the sole intent of buying appreciating assets that will make you money. The goal should not be a pay raise or promotion, the goal should be to buy an asset that creates passive income on the side! This is the key. Those who achieve real wealth realize that in order to achieve this goal, they won’t necessarily work towards ‘advancing’ in a career, trading time for money, working towards retirement, or even becoming the boss – they create passive income, buy appreciating assets, create multiple streams of income, ideally have others (be it assets, accounts, or employees) work for them, and work hard to obtain financial independence far sooner than retirement would ever come.
Start Changing Your Mentality Today!
As repeated several times in this article, when all is said and done, a person becomes successful and obtains wealth (or gets out of debt) as a result of their desire and belief, ability to overcome fear, willingness to take risks, hard work and persistence, learning
from failures, and determination to never quit. So, start saving, start budgeting, start cutting back on spending, etc. But more importantly, start changing your mentality by internalizing and implementing the principles above … and resultantly, debt will cease
and true wealth will eventually follow.
