Greetings from a beach in Spain! This post’s short and snappy, with a simple message: ‘the rich’ think about money differently to ‘the poor’.

That’s the main thing which holds many people back, preventing the shift from payday to payday financial anxiety, to being financially secure, for ever. So what do the rich think about money? Simply this:

They see money as something which creates more money.

The rest of us, me included until relatively recently, see money as something to use to pay for stuff. Bills, mortgage, diesel, food, beer down the pub, and so on. We look at the balance of our bank accounts, and we work out how we can spend the money, what can we buy to wear, play with, show off with?

The rich don’t do this.

At least when I say ‘the rich’, I’m talking about folks who’re financially independent, rather than folks who ‘look rich’, and are in reality just as dependant on their monthly wages as everyone else. No, the ‘truly rich’ folks, those we look upon with envy (these days for me, that means looking at my ill-shaven face in a mirror), look at money as something to use to buy assets which generate money for them, while they sit on the beach.

To shift from a ‘poor person’ mindset to a ‘rich person’ mindset was easy for me, once we knew what on Earth was going on (a thunderbolt moment which happened when I read ‘The Unfair Advantage‘, recommended to me by a financially-free friend). We realised we needed to minimise the money we had sat in assets which cost us money (the over-sized house we lived in, and the various items of stuff we bought which needed insuring, replacing, repairing, storing etc). Instead we needed to maximise money in assets which generated cash – investments (wealth machines) such as rental properties, dividend-paying share funds, roof-mounted solar arrays and the like. Pensions count too, and we have a reasonable bunch of private pensions waiting for us, but bear in mind you can’t touch these in the UK until you’re at least 55.

But all my money is being spent on bills, dammit!

This is a familiar statement from folks I discuss this mindset shift with and it is of course a very fair push back. If you’re really living on the breadline, then you’re not going to be able to find the money to invest without increasing your income, which is a subject for other blog posts. If, however, you do have money left at the end of the month, or if deep down inside you know you’re wasting money on stuff which isn’t really enriching your life (a massive telly, Sky package, lottery tickets, designer gear, a fancy car, a house with ‘spare rooms’ you name it), then the money is already there, waiting to start thinking like the rich, ready to start buying you your freedom.

Cheers, Jay