We often associate wealth with inheritance or winning a lottery, but the reality is quite different. A 2017 survey revealed that 88 percent of millionaires have earned their wealth themselves, with only 12 percent inheriting it. This demonstrates that hard work and strategic thinking are key to wealth building. But there’s more to it. Successful wealth builders use certain psychological tactics to enhance their earning and saving capabilities. This article will provide an insight into seven such mind hacks that can help you accumulate wealth.
1. Understand the Power of Small Decisions
The wealth builders are aware that small decisions, compounded over time, can lead to substantial financial impact. They know that even a meager saving can motivate and empower them. For instance, saving $5 a day at a 10% compound interest rate results in a saving of $1,885 in a year. If continued for 40 years, this amount balloons to a whopping $948,611.
This habit of saving gives them a sense of control over their financial life, which most people miss. The wisdom lies in making choices that demonstrate control. As Charles Duhigg, author of “The Power of Habit” and “Smarter, Faster, Better,” puts it, “Motivation is triggered by making choices that demonstrate to ourselves that we are in control. The specific choice we make matters less than the assertion of control.”
2. Avoid Self-Sabotage
Wealthy individuals are more self-aware and take measures to reduce the chances of self-sabotage. One way they achieve this is by setting up automatic deductions from their income. With this system in place, a portion of their earnings is directly channeled into a savings account, reducing the temptation to spend.
3. Visualize Your Future Wealthy Self
Successful people from all walks of life, including athletes, actors, and entrepreneurs, use the power of visualization. They envision achieving their goals before they do so in actuality. This technique has been around for decades, with Napoleon Hill’s book “Think and Grow Rich” (1937) providing a step-by-step approach to combining visualization with action.
4. Sleep on Big Purchases
Sleep is an essential tool for making wise financial decisions. It helps to lower stress, improve memory, and elevate mood. Furthermore, it allows time to reflect on significant purchases, giving your subconscious mind a chance to process the related information.
5. Spend Cash Only
The rich often only spend cash, making them acutely aware of the financial impact of their actions. A study by MIT in 2001 showed that shoppers could spend up to 100% more when using credit cards instead of cash.
6. Calculate the Cost in Hours
The wealthy often translate the cost of their purchases into work hours. This habit makes them reassess the value of not only their money but also their time.
7. Use the Stranger Test
Before making a purchase, consider the Stranger test. Imagine a stranger with the item you want to buy in one hand and its cash value in the other. Which one would you choose? Regularly practicing this technique can help in controlling unnecessary spending.
Bonus Mind Hack: Believe in Yourself
The backbone of becoming rich is self-belief. Steven Siebold, author of “How Rich People Think,” suggests that in a capitalist country, everyone has the right to be rich if they are willing to create massive value for others. But the key is to believe in your ability to make it happen.
By employing these psychological tricks, and fundamentally believing that you deserve to live your dream rich lifestyle, you are setting yourself up for financial success. However, remember that these tricks are tools, and the ultimate factor in your success is your determination and commitment to your financial goals.
