The most essential ingredient to building your wealth is your relationship with money. I hear you thinking, “But money isn’t alive.”
Money isn’t what you think it is—it reflects value. The more value you give, the more money you will receive.
Welcome back to the Saving & Investing 101 series (101), where we start the building blocks of a great financial lifestyle.
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What is a relationship with money? How do you feel about rich people? This is where your relationship with money begins.
How can you ever become rich if you don’t like rich people? When prices increase due to inflation, do you blame the government, society, or businesses?
When you blame other entities, you reduce your chances of having financial success. When prices grow, you should ask yourself, “How can I add more value to increase my income?”
As soon as you become a value-based investor, you will see the world differently. However, they teach us that we are the victims of a capitalist society and have no chance of obtaining wealth. Hogwash.
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How your money relationship begins. Most of our relationship with money comes from our parents. If they have a great relationship, you’ll also have a high chance of forming one.
But, if you grew up poor or middle-class (or even upper-middle-class), your relationship could be strained.
What did your parents say when you asked for something? Did they say they didn’t have money? How about “It’s too expensive” or “Only rich people can afford this item?”
These comments over 18 years will form a scarcity mindset that will take you years to overcome.
The trappings of a scarcity mindset. A scarcity mindset will prevent you from becoming wealthy. It’s almost impossible to obtain great wealth when you live in fear.
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A scarcity mindset tells you that there are a limited number of good jobs in the world. It says you can never become an entrepreneur or start a business.
Finally, it tells you that the only way to obtain money is through a 9-5 job. Therefore, you must climb the corporate ladder to make money.
Unfortunately, most people have a scarcity mindset and will never overcome it. It’s quite a shame because, with a bit of tweaking, they can become middle-class PLUS (have resources).
Building a great relationship with money. The good news is that you can create a great relationship with money.
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First, read good money books, and take the time to reflect on your own life through a new lens. Some great books to get you started are “Rich Dad, Poor Dad,” “Effortless Money,” and “Know Yourself, Know Your Money.”
Obtaining wealth is quite simple—the more value you add, the more money you receive. When you work a job, your employer determines your worth.
However, you can grow your value outside of a job. This is where the magic happens, and so many of us have talents that have great value. Let’s look at an example.
The magically handyman. If you own a home, you know how important it is to know a good handyman. Let’s say John is starting his handyperson business.
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He can charge $30 per hour plus parts when he first starts. He works hard and starts to get word-of-mouth referrals. Soon he has a waiting list of clients.
He raises his prices to $50 per hour to help trim his waiting list. Some people are upset because they love the low prices, but others are happy to pay the increased prices.
He keeps at it and builds another waiting list. He increases his prices again, this time to $100 per hour. Over the next three years, he maintains five high-value clients that pay him $250 per hour.
Now, he makes $100,000 annually by maintaining rental properties for successful businesspeople. He has their complete trust and confidence, and he loves his job.
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Selling out. I am sure you think that he sold out the middle-class clients that helped him get started—that’s YOUR scarcity mindset talking.
As I said earlier, most people have a scarcity mindset. Therefore, as John starts his business, he works with these scarcity-minded clients.
When he changed low prices, his clients would haggle over money. They also were late to show up, didn’t trust him inside their house, and always sought a discount on his labor or parts.
As John started adding value and working with abundance-minded folks, his friction points began to lower. He enjoyed his job because clients trusted him enough to give him a key to their homes.
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Most people fear there is so much money in the world; this makes them grip every dollar like it’s their last. Wealthy people understand how to create money, and they love to take care of people who take care of them (John).
Seeing the world of abundance. John created a world of abundance because he created value from thin air.
His days working with middle-class people gave him the experience necessary to work for rich people. Now, they pay him for his trustworthiness, expertise, and professionalism.
Most people wait for their boss to see them as good workers, give them promotions, and increase their pay. However, this rarely happens.
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You have the skills to start a part-time business or side hustle, but you must believe in yourself. You can add value independently without needing a boss to give you instructions.
There is so much money in the world; you need only see it. Once you learn to create money from your experiences, talents, and ambitions, you will convert from a scarcity mindset to an abundance mindset.
Conclusion. Your relationship with money comes down to how you see the world. If there are limited financial resources, then you will live in fear.
You will fear giving money to others, going out to nice places, and helping your kids throughout their lives.
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If you live in a world of abundance, you’ll always see your next royalty payment, dividend, or rent collection.
The money will keep rolling in, and you will keep helping others and building relationships. You’ll be happy to see other hard-working, trustworthy people, and you will have the means to support them.
I transitioned from a scarcity to an abundance mindset. It took me about two years and over 60 books. But it is worth the time and effort.
I love living on this side of the financial line. I love giving to others who will appreciate the support. As I give, this helps others believe in adding more value, which assists them in growing an abundance mindset.
The circle of giving is a great place to live. However, we must overcome the scarcity mindset that tells us to grasp every dollar for dear life. Good Luck!
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