Money is only an idea. If you want more money, simply change your thinking. Every self-made person started small with an idea and then turned it into something big. The same applies to investing. It takes only a few dollars to start and grow it into something big. I meet so many people who spend their lives chasing the big deal or trying to amass a lot of money to get into a big deal, but to me that is foolish. Too often I have seen unsophisticated investors put their large nest egg into one deal and lose most of it rapidly.
Rich dad always said, “Start small, and dream big.”
I turned $5,000 cash into a one-million-dollar asset producing $5,000 a month cash flow in less than six years. But I started learning as a kid. I encourage you to learn because it’s not that hard. In fact, it’s pretty easy once you get the hang of it.
The subject of money can be complicated and intimidating. But if you start with the basics and use them as building blocks you can gain the knowledge you need to understand money and investing and how to make your money work for you.
Build Your Confidence
Quite a few years ago, I was in Las Vegas for the night. I do not gamble much, but with time to burn, I decided to play some blackjack. As soon as I got to the table, I noticed my body begin to tense up with the fear of losing and my mind began saying, “You can only lose $200. Then you have to stop.”
Immediately, I changed my thoughts to, “I have $200 to play with and when I win $500, I will stop.” I had my entry and my exit strategy in place. Then I sat at the table, watching the dealer deal, but I did not put up any money. I could feel the fear of losing deep inside my chest.
I focused my attention on changing the losing feeling to the winning feeling. Only when I could feel the confidence of a winner in my chest, heart, and stomach did I begin gambling. Even though I lost the first few hands, all I did was focus on winning thoughts and winning feelings. After an hour, I walked away with my $500.
The point of this is that I go through the thought-and-feeling process especially when I feel afraid or doubtful of myself. For me, doing that is better than allowing your feelings of doubt and uncertainty to run your life. While the process does not always assure that I win, it is still a good habit that has allowed me to occasionally win when the odds were stacked against me and I wanted to run. Always remember that all winners lose now and then, but that does not mean they have to feel or think like a loser.
As Nike says, “Just do it.” In life, it seems that what winners do is focus on what they want. Losers seem to focus on what they don’t want. That is why it is important to make a habit of listening to yourself on a regular basis. Winners keep those winning feelings and winning thoughts, even though they may not be winning. That is a very important habit.
Be Willing to Fail
One of the biggest differences between my rich dad and my poor dad was that my poor dad was unwilling to fail. He thought making mistakes was a sign of failure. After all, he was a teacher. My poor dad also thought that in life there was only one right answer.
My rich dad constantly ventured into areas that he knew nothing about. Rich dad believed in dreaming big, trying new things, and making small mistakes. He said to me at the end of his life, “Your dad spent his life pretending he knew all the right answers and avoiding mistakes. That is why at the end of his life, he began to make big mistakes.” Rich dad also said, “One of the great things about being willing to try new things and make mistakes is that making mistakes keeps you humble. People who are humble learn more than people who are arrogant.”
Over the years, I watched rich dad go into businesses, ventures, and projects he often knew nothing about. He would sit, listen, and ask questions for hours, days, and months as he gained the knowledge he required. He was always willing to be humble and ask stupid questions. He would say, “What is stupid is to pretend you are smart. When you pretend to be smart, you are at the height of stupidity.”
Rich dad was also willing to be wrong. If he made a mistake, he was always ready to apologize. He did not try to be right all the time. He would say, “In school, there is only one right answer. In real life, there is more than one right answer. If someone has a better right answer than you, take it. Then you have two right answers.” He would also say, “People who have only one right answer are very often three things. One, they are usually argumentative or defensive. Two, they are often very boring people. And three, they often become obsolete because they fail to notice that their once-right answer is now wrong.”
So rich dad’s advice was, “Live a little. Do something daring and a little risky every day. Even if you do not become rich, this habit will keep your life exciting and keep you younger for years longer.”
Start Small in the S Quadrant
The S quadrant, which stands for Small business or the Self-employed, is the perfect place to start small. Once you learn the skills to be a successful entrepreneur. You can then decide to move on to the B quadrant and then to the I quadrant. Or you can stop and start your own business. Some may find that moving into the S quadrant proves to be too challenging. While anyone can be an entrepreneur, becoming an entrepreneur is not for everyone.
As I have often said, “Keep your daytime job and start a part-time business.” The reason most small businesses fail in the first five years is that the fledgling entrepreneur cannot earn enough money to support the business, themselves, and their families. Learning to become an entrepreneur takes time.
One reason people learn so much by starting a part-time business is that they start as insiders in their own business. If someone can learn to build businesses, a whole new world with virtually unlimited financial opportunity becomes available.
Editor, Rich Dad Poor Dad Daily