When it comes to the game of money, there are critical moves that determine whether you’ll be a winner or loser; one misstep in your strategy can present an unnecessary roadblock that delays your long awaited victory. Below are 8 tips to keep you on course, and make you a winner.
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Don’t be a “Chicken Little”
"The sky is falling!" - Chicken Little
Most of us know the story of Chicken Little, who ran around the barnyard crying out about impending doom after an acorn fell on her head. In the story, the sky is not falling, of course, but to Chicken Little, facts didn't matter. Rather than investigate and learn what was happening, Chicken Little panicked and spread her fear to others.
All of us know people who are like Chicken Little. And, if we're honest, we all have an inner Chicken Little who comes out in the face of fear and doubt.
Ultimately, if unchecked, our inner Chicken Little turns us into cynics who always see danger and never take action. If you have any hope of being rich, you must learn to overcome this cynicism in your life.
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Stay away from the blame game
In these hard times, people want to blame the rich for their problems. Because life is not fair, people are looking at those who have an unfair advantage and wanting to even the playing field.
We see this in the US with proposed tax increases on passive income and other benefits that businesses and investors enjoy.
We see it across the world with the Occupy Movement smashing windows and creating mayhem on May Day.
We see it most recently over this last week as the French ousted their president and replaced him with a socialist leader who vows to tax the rich more.
The problem with this blame game is that it takes an entire class of people and pits them against another class of people. It creates tension and aggravation. But it doesn’t create any solutions.
And it goes both ways. The poor blame the rich. And the rich blame the poor. The blame game is a losing one.
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Understand what it means to really be successful
Are there some people among the rich who are part of the problem? Yes. Are there some people among the poor who are part of the problem? Yes. Classes aren’t the problem, and it’s important not to pin the problem on a particular class out of desperation to hold someone accountable. No, classes are not the problem, people are.
The truth is that whether you’re rich or poor, the amount of money in your bank account isn’t what makes you successful. And I’ve been both rich and poor.
What makes you successful is building something of value to others.
Most often this is done through investing and business, which is why money follows. But it’s not the money that makes the success — the money is simply a sign of success. Rather it’s the initiative and end-product of entrepreneurs or investors that makes a success because they bring value to the world.
Successful people solve problems. They provide jobs. They fund new ideas and initiatives. They take risks so that they and others can benefit. Sometimes this makes them rich. Sometimes it makes them poor; nevertheless, they continue to move forward without punishing those who are or are not successful.
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Stop asking, “What if?”
When it comes to our money, we too often play the "What if?" game. We ask questions like, "What if the economy crashes after I invest this money?" "What if I lose control and can't pay the money back?" "What if things don't go as planned?"
Compounding the weight of our "What if’s" are friends and family who also speak into our life and tell us that our investments and businesses are too risky, will never work, or are not a good idea. These words of doubt often become so loud that we fail to act. Instead, we play it safe.
The "What if?" questions are just noise. And this noise distracts us from great opportunities in front of us. People in the 1950's, for instance, asked, "What if there is nuclear war?" They then spent minor fortunes on fallout shelters and spare food. Nuclear war never came and that money was lost. If they'd invested their money, they'd be financially free today.
In order to be rich, you must stop asking, "What if?" and start asking, "What is?"
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Find good advisors (and keep ‘em close)
Many years ago, our friend Richard visited us in Phoenix. He was impressed with what Kim and I had done with investing in real estate. At the time, Phoenix real estate prices were depressed, and we spent two days showing him around the city, brining him to what we thought were great real estate investments for cash flow.
Richard found an investment that he liked, a two-bedroom townhouse for $42,000. Similar units were going for $65,000. He found a bargain, and we called an agent. He went back to Boston ready to close. Two weeks later the agent called and said that Richard had backed out of the deal.
I called Richard to find out what happened. "My neighbor said it was a bad deal," he told me. "Is your neighbor an investor?" I asked. He said “No.” When I asked why Richard would listen to his non-investor neighbor, he became defensive and simply said he wanted to keep looking.
Put plainly, Richard's neighbor was a bad advisor. Often, when we're battling fear or doubt, our inner cynic will seek out advisors who will validate our fear with "What if" rather than with "What is." A good advisor will be knowledgeable in the game of money, and help you see the true reality.
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Focus on the big picture
Rich dad said, "Cynics criticize, and winners analyze."
When I speak to people about investing in real estate, they often tell me they're not interested in real estate because they don't want to fix toilets. Those are the words of a critic and a cynic. They are the words of someone that can't see the big picture.
Those that can’t see the big picture, make other factors the source of their problems. They’re always at a disadvantage because they never take the time to create their own advantage. They’re too busy waiting for it to be handed to them.
Those that are successful understand that an unfair advantage exists and they do all they can to create their own unfair advantage through financial education, which they use to build business and invest successfully — to create solutions. Successful people understand that life is what you make it.
When someone says, "I don't want to fix toilets," they're saying that little problems like toilets are more important than their financial independence, which is the big picture. I talk about getting out of the Rat Race and they talk about toilets. That thinking keeps most people poor.
The rich find a way to make their "I-don't-wants" into keys for success. For instance, I don't want to fix toilets either. But instead of making that a reason not to invest in real estate, I find a good property manager that does want to fix toilets. The rich find a way—the cynic finds excuses.
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Take action
Remember this: One’s inaction keeps them poor.
A while back, a friend of mine told me all the reasons why the price of oil was going up. He was worried and did nothing with the information, much of which was new to me. Later, I went home, did my own research, verified what he was saying, and instead of worrying, got excited.
With that information, I immediately began looking for and found a new, undervalued oil company that was about to find some oil deposits. I bought 15,000 shares for $0.65 per share. A few months later those shares were worth $3 per share.
My friend did nothing but worry. I got good information and acted. One of us is rich; the other is not.
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Invest in financial education
All the examples I've shared in this post required high financial intelligence. Knowledge is power, and it's the new money. It is your knowledge that makes you rich at the end of the day...and it's knowledge that casts out fear and doubt. In order to overcome your cynicism, you'll need to change your thinking. The best way to do that is to invest in a financial education that helps you see in a new way how money works. Then it's go time.