THE REASONS FOR FINANCIAL FAILURE
THE PRIMARY REASON WHY MOST ADULTS HAVE FINANCIAL PROBLEMS IS NOT LOW EARNINGS. IN THIS CHAPTER THE MILLIONAIRE NEXT DOOR, THOMAS STANLEY AND WILLIAM DANKO SHOW THAT TWO FAMILIES LIVING ON THE SAME STREET, IN THE SAME SIZE OF HOUSE, AND WORKING AT THE SAME JOB CAN HAVE COMPLETELY DIFFEENT FINANCIAL SITUATIONS. BY THE AGE OF FORTY FIVE OR FIFTY, THE COUPLE IN ONE HOUSE WILL BE FINANCIALLY INDEPENDENT WHILE THE COUPLE NEXT DOOR IS DEEPLY IN DEBT AND HAVING TROUBLE MAKING THE MINIMUM PAYMENTS ON THEIR CREDIT CARDS.
THE REASON FOR THIS IS NOT THE AMOUNT OF MONEY THAT THEY EARN. THE REASON IS LACK OF SELF-DISCIPLINE AND THE INABILITY TO DELAY GRATIFICATION. WHY IS THIS WEAKNESS OF CHARACTER SO PREVALENT AMONG THE MAJORITY OF ADULST IN SOCIETY TODAY? IT GOES BACK TO EARLY CHILDHOOD.
WHEN YOU WERE A CHILD AND YOU RECEIVED MONEY (WHETHER IT WAS YOUR ALLOWANCE OR A GIFT FROM A FRIEND OR RELATIVE) THE FIRST THING YOU THOUGHT OF DOING WAS TO SPEND THAT MONEY ON CANDY. CANDY IS SWEET. CANDY IS DELICIOUS. CANDY FILLS YOUR MOUTH WITH A WONDERFUL, SUGARY FLAVOR. YOU LIKED CANDY WHEN YOU WERE A CHILD, AND YOU PROBABLY COULD SELDOM GET ENOUGH OF IT. MANY CHILDREN WILL EAT CANDY UNTIL THEY BECOME PHYSICALLY ILL BECAUSE IT TASTES SO GOOD.
AS YOU GREW OLDER, YOU DEVELOPED WHAT PSYCHOLOGISTS CALL A "CONDITIONED RESPONSE" TO RECEIVING MONEY FROM ANY SOURCE. LIKE PAVLOV'S DOG, WHEN YOU RECEIVE MONEY, YOU MENTALLY SALIVATE AT THE THOUGHT OF SPENDING THIS MONEY ON SOMETHING THAT MAKES YOU HAPPY, AT LEAST TEMPORARILY.
SPENDING MAKES YOU HAPPY
WHEN YOU BECOME AN ADULT YOU EARN OR RECEIVE. MONEY, THIS AUTOMATIC REACTION CONTINOUS. YOUR FIRST THOUGHTS IS, "HOW CAN I SPEND THIS MONEY TO ACHIEVE IMMEDIATE PLEASURE?
WHEN YOU GET YOUR FIRST JOB, THE VERY FIRST THING YOU THINK ABOUT IS HOW YOU CAN SPEND NOT ONLY THE MONEY YOU EARN, BUT ALSO EVERY PENNY YOU CAN BORROW ON A CREDIT CARD ON CLOTHES, CARS, COSMETICS, SOCIALIZING, ENTERTAINMENT, TRAVEL, AND EVERYTHING ELSE. YOUR MENTAL EQUATION IS MONEY = ENJOYMENT.
WHEN YOU GO ON VACATION TO A RESORT OF ANY KIND, YOU FIND THAT THE HOTELS AND STREETS ARE LINED WITH SHOPS SELLING USELESS TRINKETS, BOBBLES, AND TRASH, PLUS CLOTHES, ARTWORK, AND OTHER ITEMS THAT YOU WOULD NEVER THINK OF BUYING AT HOME. WHY IS THIS? SIMPLE. WHEN YOU ARE ON VACATION, YOU FEEL HAPPY. YOU HAVE A CONDITIONED RESPONSE TO ASSOCIATE HAPPINESS WITH SPENDING MONEY. THE HAPPIEAR YOU ARE, THE MORE UNCONSCIOUSLY COMPELLED YOU ARE TO GO OUT AND SPEND MONEY ON SOMETHING - OR, RATHER ON ANYTHING.
AS AN ADULT, WHENEVER YOU RECEIVE YOUR PAYCHECK, A BONUS, A COMMISSION, AN IRS REFUND, A PRIZE, OR A INHERITANCE, THE VERY FIRST THING YOU THIK ABOUT IS HOW YOU CAN SPEND THIS MONEY AS QUICKLY AS POSSIBLE AND ON AS MANY PLEASURE AS POSSIBLE.
REWIRE YOUR RESPONSES ABOUT MONEY
THE STARTING POINT OF ACHIEVING FINANCIAL INDEPENDENCE IS TO DISCIPLINE YOURSELF TO REWRITE YOUR ATTITUDE TOWARD MONEY. YOU NEED TO REACH INTO YOUR SUBCONSCIOUS MIND AND DISCONNECT THE WIRE LINKING, "SPENDING" AND "HAPPINESS". YOU NEED TO THEN RECONNECT THAT "HAPPINESS" WIRE TO THE "SAVING AND INVESTING" WIRE.
FROM THE MOMENT ON , INSTEAD OF SAYING, "I FEEL HAPPY WHEN I SPEND MONEY", YOU WILL SAY, I FEEL HAPPY WHEN I SAVE MONEY.
TO REINFORCE THIS SHIFT IN THINKING, OPEN UP A "FINANCIAL FREEDOM ACCOUNT" AT YOUR LOCAL BANK. THIS IS THE ACCOUNT IN WHICH YOU DEPOSIT MONEY FOR THE LONG TERM. ONCE YOUR MONEY GOES INTO THIS ACCOUNT, YOU RESOLVE THAT YOU WILL NEVER SPEND IT ON ANYTHING EXCEPT THE ACHIEVEMENT OF FINANCIAL FREEDOM.
IF YOU WANT TO SAVE MONEY TO BUY BOAT OR A CAR, YOU OPEN UP A SEPARATE ACCOUT SOLELY FOR THAT PURPOSE. BUT YOUR FINANCIAL FREEDOM ACCOUNT IS INVIOLABLE. YOU NEVER TOUCH IT EXCEPT TO INVEST THOSE FUNDS SO THAT THEY CAN YIELD A HIGHER RATE OF RETURN.
ASSOCIATE HAPPINESS WITH SAVING
WHEN YOU BEGIN SAVING IN THIS WAY, SOMETHING MIRACULOUS HAPPENS WITHIN YOU. YOU START TO FEEL HAPPY ABOUT THE IDEA OF HAVING MONEY IN THE BANK. EVEN IF YOU OPEN YOUR ACCOUNT WITH ONLY $10, THIS ACTION GIVES YOU A FEELING OF GREATER SELF-CONTROL AND PERSONAL POWER. YOU FEEL HAPPIER ABOUT YOURSELF. THE VERY ACT OF DISCIPLINE YOURSELF TO SAVE MONEY YOU FEEL STRONGER AND MORE IN CONTROL OF YOUR DESTINY.
EACH TIME YOU GET SOME EXTRA MONEY YOU PUT IT INTO YOUR FINANCIAL FREEDOM ACCOUNT. EVENTUALLY, YOUR FINANCIAL FREEDOM ACCOUNT WILL BEGIN TO GROW. THEN, AS IT GROWS, YOU ACHIEVE TWO LAWS, THE LAW OF ATTRACTION AND THE LAW OF ACCUMULATION.
BECAUSE THE MONEY IN YOUR ACCOUNT IS EMOTIONALIZED BY YOUR OWN THOUGHTS AND FEELINGS, IT SETS UP A FORCE FIELD OF ENERGY THAT BEGINS TO ATTRACT MORE MONEY INTO IT. IF YOU SAVE $10 A MONTH FOR A YEAR, YOU WILL BE ASTONISHED TO FIND THAT WITH THE EXTRA BITS OF MONEY THAT YOU HAVE PUT INTO THAT ACCOUNT, YOU WILL PROBABLY HAVE MORE THAN $200 RATHER THAN JUST $120. IF YOU SAVE $100 PER MONTH, YOU WILL PROBABLY HAVE MORE THAN $2000.
THE LAW OF ACCUMULATION SAYS THAT "EVERY GREAT ACHIEVMENT IS AN ACCUMULATION OF MANY SMALL ACHIEVEMENTS". THE LAW OF ATTRACTION SAYS THAT "YOU ATTRACT INTO YOUR LIFE THOSE THINGS THAT ARE IN HARMONY WITH YOUR DOMINANT THOUGHTS. BECAUSE OF THESE LAWS, YOUR FINANCIAL FREEDOM ACCOUNT BEGINS TO GROW WITH THE MIRACLES OF COMPOUND INTEREST.
THE MORE MONEY YOU HAVE IN YOUR BANK ACCOUNT, THE MORE ENERGY IT GENERATES AND THE MORE MONEY IS ATTRACTED INTO YOUR LIFE . YOU HAVE HEARD IT SAID THAT "IT TAKES MONEY TO MAKE MONEY". THIS IS TRUE. AS YOU BEGIN TO SAVE AND ACCUMULATE MONEY, THE UNIVERSE BEGINS TO DIRECT MORE AND MORE MONEY TOWARD YOU THAT YOU CAN SAVE AND ACCUMULATE.
EVERYONE WHO HAS EVER PRACTISED THIS PRINCIPLE OF REGULAR SAVING IS ABSOLUTELY ASTONISHED AT HOW QUICKLY THEIR FINANCIAL FOTUNES CHANGE FOR THE BETTER.
THE RULE FOR FINANCIAL INDEPENDENCE, ONCE YOU HAVE REWIRED YOUR ATTITUDE TOWARD MONEY, IS TO "PAY YOURSELF FIRST". MOST PEOPLE SAVE WHATEVER IS LEFT OVER AFTER THEIR MONTHLY EXPENSES - IF THERE IS ANYTHING LEFT OVER AT ALL. THE KEY, IS TO PAY YOUSRSELF FIRST, OFF THE TOP, FROM EVERY AMOUNT OF MONEY YOU RECEIVE.
