5 Money Mindsets to Help You Build Financial Freedom

By AAwosika07 | Careers

Nov 29
money mindset

“Cash rules everything around me, C.R.E.A.M. get the money, dolla dolla bill yall.” – Wu-Tang Clan

You care about money.

In fact, if you’re not rich, you care about money even more.

What do I mean? The people who say they “don’t care about money” actually care about it the most. They’ve built up so many negative connotations and weird psychological scripts about money that, as much as they’d like to say otherwise, money is the central aspect of their life.

Contrast this with earning more money and building financial freedom. When you do this, you think about money less. You care about it less.

Every decision you make about money isn’t life or death. You build a reserve so you’re not constantly fretting about the next check. You’re free to do other things.

You don’t have to become rich, but I would strongly suggest you work on building some sort of path to financial freedom.

Like it or not, we live in the material world. This means that money simply has to be a part of your equation if you want to live a good life. Better to embrace it than deny it.

How do you undo these deep-seated narratives that keep you from building financial freedom?

First, identify them. Second, fight a never-ending uphill battle to change them. Changing your mindset and behavior around money isn’t easy:

” […] investing is not the study of finance. It’s the study of how people behave with money. And behavior is hard to teach, even to really smart people. You can’t sum up behavior with formulas to memorize or spreadsheet models to follow. Behavior is inborn, varies by person, is hard to measure, changes over time, and people are prone to deny its existence, especially when describing themselves.” Morgan Housel

But it’s necessary. I don’t know what else to tell you on that front. It’s important to work on it.

Identifying some of the common counterproductive mindsets and showing counterexamples is a good start. So that’s what we’ll do.

You Can Build Wealth Ethically

People seem to be under this impression that “the one percent” is comprised solely of people like Jeff Bezos and Monty Burns. Untrue.

To be in the one percent, you have to earn about a half a million dollars. Many people in this group earned their money in an ethical way. You’ve been sold this myth of money equating to guilt and greed because it makes sense to sell it to you.

The narrative that the rich are somehow holding you back from the life you want to live ties in perfectly with the notion that you need to be saved. This notion gets people elected. That’s the sole incentive for this message. That’s it.

There are many examples of how wealthy people have helped the world immensely. How could one argue that Bill Gates is a net negative on society when he helped spark a technological revolution that has made our lives easier, better, and wealthier in an innumerable amount of ways? Cognitive dissonance.

See, because many people deep down don’t think they can build wealth, they have to create this mental coping mechanism that everyone with wealth cheated their way to the top.

It’s too sobering to admit that you could, in fact, be more well off than you are right now if you just exerted more effort. Deep down, you want more wealth, too. Maybe not Bezos wealth, but to act like you don’t want some sense of financial freedom is just a flat out lie.

The first step to changing this is to realize that it’s okay to have money. You don’t have to cheat people to make it. You don’t need to be greedy to earn it. And you definitely aren’t a bad person for wanting it.

Anytime a narrative is commonly adopted by the masses you should pause and consider why.

The idea that we’re autonomous and capable of upward mobility isn’t good for the oligarchy. They don’t want us to self-actualize, build wealth, and create personal freedom. Because then we wouldn’t need them.

We don’t need them.

You don’t need them.

Not only can you build wealth, but it’s your ethical duty to do so. Time to start earning.

Stop Trying to Save Money

“I should save money.”

This phrase causes psychological damage. When you’re not earning enough money, saving money is difficult. Most people are living paycheck to paycheck, meaning that saving money is next to impossible. On top of that, penny-pinching only saves up pennies.

Even if you saved 20 percent of your income each year at a normal salary, what can you really do with it? Slowly but surely, you could roll it into some investments — put a down payment on a rental, stash it an index fund and wait decades, or become a millionaire when you’re old with retirement money. But that takes a level of shrewdness and patience most people don’t have.

Better to just earn more money.

Easy enough for me to say, right? Look, it’s not going to be easy, at all. But, if you start a side hustle you can get it to “pop” at some point if you’re honestly and diligently working on it.

Here are a few guides you can start with if you’re totally lost on the subject:

Here’s the trick. You have to be able to stay at your current lifestyle when your income goes up. If you have the discipline to do that, you’ll be able to save money. Lot’s of it. Then, you can turn that money into more money. However, this requires the right mindset about what money is.

Money is Fuel

Money is a means to an end. Money has no positive or negative connotations except for the ones you attach to it. Even if you don’t want to get rich (which you probably do) you must understand that money is a means to the things you do want like:

  • Freedom – Without enough money, you’re not free to do what you want when you want. Money buys time, flexibility, and freedom when you earn it the right way.
  • Peace of mind – Once you reach a certain level of income, you sleep better at night. The psychological stress you avoid when you rise above living paycheck to paycheck is massive. And less stress saves you even more money because your stress won’t degrade your health.
  • Experiences – Forget about toys like homes, cars, and clothes. If you want to see the world, watch your favorite team live, skydive, or a number of other awesome experiences, you need money to do those things.

I’m not that materialistic, but I’ve always wanted to be rich. Why? Not to have a bunch of money sitting in my account or keeping up with the Jones’s. Rather, I wanted to do whatever I wanted 100 percent of the time. That’s what I do now. And it feels as good as you think it does.

Don’t let negative associations with money ruin this future possibility for you. If you don’t build this type of relationship with money, seeing it as fuel to a better future instead of something to be guilty for having, you’ll never experience the type of life you want to live. Point blank.

Get on the Right Side of This Equation

Warren Buffet has a saying, “You can’t live a good life borrowing at 18%”

Financing opened up a lot of possibilities for people. Without financing, you probably wouldn’t be able to afford something like a home. That being said, becoming a serial financer is the easiest way to stay broke forever. And that’s exactly what people do.

Each time you finance something with an interest rate, you end up paying much more than the actual price of the item. You die a death by a thousand cuts. Why do most people do this? Insecurity.

Why do you have to get a brand new BMW with a $500 car note when you get a raise at your job? You don’t.

Why do you have to finance a new furniture set? You don’t.

You don’t have to become extremely frugal by any means, but until you become the type of person who has money working for them instead of the other way around, you’ll never be able to have financial freedom.

I drive a 2008 Kia optima that I bought at a car auction 5 years ago for $2,500. Based on my income, I’m more deserving of driving a BMW than almost everyone on the road that drives one, but I don’t. Because it’s just a car. Because I know these people have become indentured servants to “own” that car.

I’ll take my Kia going to and from when and where I want instead of being one of a dozen 2019 models crammed on the freeway Monday morning.

Make your money and then make your money work for you. How?

  • Invest – Index funds tracking the market are as advanced as you need to get.
  • Own assets that create cash flow – Rentals, intellectual property, franchises, etc.
  • Do it over again – Reinvest profits over and over again, building an even bigger margin of safety.

A few years down the road, I may buy some luxury items, but I’ll do it the following way.

Treat Yourself at the Right Time

Once you have assets that create cash flow for you, passive income, you can spend that money on luxury items.

I’ll probably won’t buy my own home until I own multiple properties that pay me enough cash flow to buy said home. After I’ve written a dozen books, created multiple products, invested in many properties, stocks, and funds, I’ll take some of that money and start thinking about buying a fancy car.

This is about playing the long game.

Grant Cardone is an ostentatious and nearly obnoxious real estate investor and online guru. Under the brash veneer lie some important lessons.

Years before he bought a Gulfstream Jet, a $450,000 Patek Philipe watch, and all of his other fancy toys, he was a sales consultant in his mid 30’s.

According to Grant, he rode around in a busted Toyota Camry with $1,000,000 sitting in his bank account from his sales consulting business. He took that money and bought an apartment complex. He did it again, and again, and again.

Ironically, he got actually rich by, at first, not trying to look rich. Almost everyone else does the exact opposite, then gets mad at someone like him for displaying too much of his wealth. This is the inverse mindset of the world that kills people’s futures.

I’m sure you’re not looking to buy a private jet, but the point here is to build your income up to a level that your investments make buying luxury items…a luxury. You really have enough money to (sometimes) blow it on dumb stuff.

You Want to be Free

You know how I stayed focus long enough to be able to quit my job, build assets, and pave the path to financial freedom?

Every time a crappy client at my digital marketing job sent me a stupid email, I absorbed that energy into my soul and turned it into motivation.

Each day when I commuted an hour back and forth to work, I stared at the faces of people driving next to me and cemented their expressions in my mind. I told myself my face would never look like that.

I kept my focus…

Not on toys, logos, cars, and homes, but on freedom. On being able to proverbially tell the world to piss off. On being able to do what I want.

Freedom isn’t priceless. You have to buy it. So do it.

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