Did you know that our minds are wired to make “psychological mistakes” with money?
Many of us wind up broke and dependent on others by retirement age because money confuses us on a psychological level.
It’s all so common to read stories about people who win a big lottery, only to spend or lose it all in a few years. Or about ultra high income celebrities or sports stars who go bankrupt after they retire.
The level of wealth someone has is not only dependent on his income as earning money is just one part of being wealthy. Keeping it and growing it is actually more important.
Think about a thermostat.
If it is set at 25 degree, the temperature will ultimately settle at 25 degree no matter how high the external temperature is.
What is the level of your financial thermostat today and what is the level that you want to set it at?
If you do not know how to manage $100,000, will you know what to do when you are given one million dollars?
There’s this story about Warren Buffett being in a lift with few other people (who are obviously nowhere near his level of wealth).
A coin was on the floor but nobody bothered to pick it up. However, Warren Buffett did and the reason why he did so was that he has a very simple philosophy. Every penny will contribute towards his next million (or billion).
We are all creatures of habit. If you adopt bad money habits when you are dealing with $100, you will most probably have the same bad habits when you are dealing with $1,000, $10,000 or $100,000.
Therefore, do not wait until you are “rich” before you start learning about how to manage your money the right way.
If you’re interested to know some other insights about the psychology of failure and success with money, you can find out more in this PDF report (opt-in required) – and watch the video that goes with it: