How to Turn Your Doubts Into Profits
As a kid, I had to take two opposing views on money into account…
My poor dad, my natural dad, told me money isn’t important.My rich dad, meanwhile, told me that money was immensely important.
The thing is most people never even go this far. They blindly believe, or rebel against, what they were taught.
Rich kids might deny the value of money and try to live a life of poverty. Poor kids might hate the fact they grew up with no money and make it the most important thing in their life.
My rich dad taught me there were always two sides to a coin, and that’s where most people stop. But, he told me, there is another side to a coin that most people don’t pay attention to. It’s the edge of the coin. Most often the truth is not found on one side of the coin or the other, but instead, it is found on the edge… the point between points.
Most people don’t take the time to sit down and understand what they believe about money. For some, money is the root of all evil, a subject to be avoided at all cost, not talked about, and demonized. People who make money are the enemy. It’s the rich against the poor.
For others, money is everything. They’ll sacrifice friends, family, and integrity to get it. It’s a dog-eat-dog world.
For others still, money is merely a tool.
For better or for worse, our understanding of money often shapes our life. And our understanding of money is often something that is passed down to us from a young age, received without a critical eye, and lived out in unseen ways. Because of this, money often rules us in ways we can’t understand, because we don’t truly understand money and how it works.
When my wife Kim and I began our journey from broke, to rich, to retired in less than 10 years, we were nearly out of money, low on confidence, and filled with doubt.
We all have doubts. The difference is what we do with those doubts…
Money Is a Tool
All of us carry many beliefs about money, and our beliefs tend to guide our actions, feelings, and thoughts.
Ayn Rand once said that “Money is a tool. It will take you wherever you wish, but it will not replace you as the driver.”
I love the quote above because it illustrates three very important points:
#1 Money is a tool
One of the most common reasons people give for not investing is, “I don’t have the money.”
This illustrates a common misconception many people have that money makes money. This is not true. People make money.
Wise investors use money as a tool to invest and generate returns on the money invested. Unfortunately, as many people have experienced, simply having money to invest and investing it often leads to loss of money.
To be a successful investor you need to be educated about your investments and take control of your investing.
#2 It will not replace you as the driver
I see it again and again on talk shows with financial “experts”: a person from the audience asks, “I have X dollars saved up. What should I invest it in?”
This question shows that this person thinks he or she is not capable of making their own investment decisions. Certainly, financial experts don’t mind you thinking this since you then turn your money over to them to manage — they get paid their fees whether your investment makes money or not.
The problem here is that you’re turning your financial future over to someone else.
To use the car metaphor, if you want to control where the car goes, you have to drive it. If you let someone else drive, you end up wherever they take you, and you may or may not like where they take you. Why take the risk? Drive yourself.
#3 It will take you wherever you wish
When you use money as a tool, instead of becoming a slave to money, your dreams really can come true. Learning how to use money effectively is a process and you’ll make some mistakes along the way, but once you’ve mastered the skill of using money you’ll find it can take you wherever you wish.
The Answer Is Education
If a person wants to be a concert pianist, the only thing that stands between where they are now and performing on a stage is training, mentors, hard work, and time. The catalyst for everything is education.
As rich dad said, “Investing is a subject you can learn the basics of for the rest of your life.” What he meant was that it sounds complex at the start, and then it gets simple. The simpler you can make this subject or the more basics you learn, the richer you can become while reducing risk. But the challenge for most people is to invest the time.
It is now possible for more and more people to gain access to the great world of infinite wealth, the wealth found in information. And information is infinite, not restricted as land and resources were in ages gone by. The bad news is that the people who cling to old ideas may be brutalized by the changes upon us, as well as by the changes yet to come.
If rich dad were alive today, he might say, “The Internet is much like the California Gold Rush of the 1850s. The only difference is that you do not need to leave your home to participate in it, so why not participate in it?”
He would probably go on to say, “During any economic bonanza, there are only three kinds of people: those who make things happen, those who watch things happen, and those who say, ‘What happened?’”
You can choose which kind of person you will be.
Play it smart,
Editor, Rich Dad Poor Dad Daily