Building long-term financial wealth and happiness is often a long journey. It is easy to become distracted and even venture off course a little. That’s why I think it is always great to have financial mindsets to keep you on track. Here are five financial mindsets to improve your life.
Don’t Compare Yourself To Others
One of the best pieces of advice I ever got was don’t compare yourself to others. For the longest time I always thought that was crazy! I was a little competitive in my earlier days (I guess I still am in some ways). If you don’t compare yourself to other people how can you know you’re the best?
It took me years to learn that it was an unhealthy obsession. There are 7 billion other people on the planet; chances are there’s someone out there better than you (well unless you’re Tom Brady apparently).
Not everyone received the same starting point in life. Some were born to well connected families in the business/political communities and some were born in the inner city. As a result, apples to apples comparisons are often not available.
During my senior year of college, there was quite the competition among a few in my class about getting the highest salaries. People were courting Fortune 500 companies like Amazon, Microsoft, Costco, and a few others and getting decent signing bonuses and stock options.
Instead of comparing yourself to others, compare yourself to yourself! As long as you’re progressing, making changes, and getting your ducks together, that’s all that matters.
Here’s an easy way to see if you’ve grown to be a better person: Look at some of the decisions you’ve made 2 or 3 years ago. If you’ve cringed at your actions, congratulations, you’ve improved!
Learn The Basics Of Investing
If you want to build long-term wealth, you must learn the basics of investing…whether it is the stock market or real estate or other asset classes. Many of the world’s most successful and wealthy people learned how to invest (sometimes even without an education).
If you want to beat inflation and reap the benefits of compound interest, you need to take the time to learn how to invest. Now, I’m not saying you need to be some stock market guru or Wall Street analyst. You can gain tremendous wealth investing through an index fund/ETF over numerous decades.
The point is arming yourself with the right tools and knowledge to succeed.
Don’t Focus Too Much on Saving Money
When I moved out of state for my first real job after college, I was obsessed with saving money to invest. At the time, I wasn’t making too much money and rental prices were (and still are) high in Southern California. I used a number of strategies to save money…even foregoing the AC in the summer!
I often see older folks doing everything they can to save a penny. You know….things like waiting months to get a haircut to driving around in a 15+ year old car without properly functioning airbags. There’s a fine line between being frugal and being a cheapskate.
At some point, you need to stop worrying about penny pinching. What’s the point in working hard, saving, and investing money if you’re not going to do anything with it?
These days, I’ll happily pay $10 for underground parking downtown if it saves me 30 minutes circling around the block trying to find a tiny space to cram into. Finding the most efficient way is more important to me now than saving a few bucks.
Don’t get me wrong, having a budget and keeping track of expenses closely is very important to your financial health. Just don’t go overboard and do anything at the expense of saving money. There’s a fine line between enjoying life and saving for retirement. What’s the point in getting to retirement a year or two earlier if you’re miserable in the process?
Get Plenty Of Exercise
If you want to improve your chances at long-term financial health, you must get in shape. I don’t mean you need to train like an Olympian, but going to the gym a few times a week or joining some kind of boot camp is a good idea.
Being overweight costs women $4,879 a year and men $2,646 a year. That’s a ton of money! Multiply that by 30 years and you could easily spend $200,000 on additional healthcare costs! That’s a big opportunity cost if you could have invested that money in the market and earned 7% a year!
I’ve always firmly believed that no amount of money is worth your health. What’s the point in being rich if you’re constantly at the doctor’s office or the hospital or only have a few more years to live?
Many people (like myself) had a big hurdle to jump through before going to the gym consistently. Check out my post on setting your mindset straight to avoid excuses and get going! It helps if you have a support system of friends that also go to the gym.
Always Be Hustling
To get ahead of your financial health, you must always be hustling. This may mean putting some more hours at work to get that well deserved raise or maybe even starting your own side business.
Earning money from a side hustle is the greatest feeling in the world. It gives you tremendous confidence because you’re not dependent any employer to make money. Plus, the extra money is nice to pay down debt or to increase your period investments.
In the age of the internet anyone can get a side hustle pretty easily. That wasn’t the case 15 or 20 years ago. Most online side hustles can be started for less than $50. That’s a pretty good deal because it means your risk of loss is very low.
When starting out with your side hustle, keep in mind that it may take a while to scale up. Don’t be too discouraged if you’re not making too much money in the beginning. Like all good things, it takes a while to ramp up.
If anyone is interested, check out my post on how I make over $1,000 a month writing erotica on Amazon! It’s one of the best side hustles I’ve ever started and it was easy to get started.
Achieving financial prosperity and happiness can be a long journey. Having the right mindsets can speed up the journey. Don’t get discouraged; as long as you’re getting a little bit better every day, you’ll eventually cross the goal line!
Readers, do any of you have some amazing financial mindsets that you follow? Let me know in the comments!