3 Factors that separate the rich from the poor
Have you ever sat and wondered why some people are rich and others are poor? When we were over-indebted and cash- strapped, I used to think success was a result of luck! And my break hadn’t arrived yet. But as we started to work through our financial issues it was clear. We realized that our spending actions were the real reason why we hadn’t progressed in life.
My name is Judy Hayes and I am an entrepreneur working remote from the Southern Peninsula in Cape Town. When I met my husband Vernon, we were both over-indebted due to unsecured debt. We entered the working world at the age of 18 without any understanding of how to work smart with our salaries. We also entered the workplace at a time before the National credit act. I had clothing accounts, loans and by the time I was 21 I had 3 credit cards with exceeded limits. At 24 my unsecured debt was worth over R100 000. I had no investments, savings or assets to show for the money I had spent. But the reality is I didn’t know any better and I had used the tools I learnt in life to get by. Sound familiar?
In Rich Dad Poor Dad book Robert Kiyosaki highlights 3 factors that separate the rich from the poor. This made me think of my journey with debt. I had followed all the traits that poor people did and it led me to being poor. But when I started working for myself, I was fortunate to complete my BCom degree in management. This gave me insight to manage my own finances like you would balance your business books. By managing our finances, we were able to change our spending habits and could grow in life.
So when I read Robert’s words I could resonate with what he said because I had experienced it first hand. I know if you can apply the steps of the rich you will get the same results over time.
3 factors that separate the rich from the poor
Factor 1: Knowledge
Traditional schooling, while very important, is no longer enough. They do not teach financial literacy in school and this is the foundation we need, for our success.
The rich educate their kids from a young age on how to work smart with their money. They teach the children that money is power that you can use to make more money.
Poor parents lack financial foundations. They thus do not teach their children how to manage money. Instead their children learn their poor money management habits. They grow up to recreate the same mistakes their parents made.
Therefore, financial literacy is so important in our society. We need to educate ourselves and our children to follow better financial guidelines. This will help not only us but also our children to make better financial decisions.
Knowledge is power!
Factor 2: Thought
Our thoughts shape our lives. When you read books about the “millionaire mindset” it’s clear how important our thoughts are for success.
A rich person will train their thoughts to be positive so they can focus on opportunity instead of problems. Instead of saying “I can’t afford that”, they will think; ” how can I afford that?” Their change in mindset allows them to find ways to move forward. They do not surrender to their current position.
A poor person will succumb their mindset to their less fortunate situation. They will be negative because they focus on what they do not have instead of what they do have or want. A negative mindset will shut the mind off from focusing on opportunities. The result is the person stays in their position and cannot progress leading to more negative thinking.
It is important to work on your thoughts if you want to change your situation. Train your mind to choose thoughts that lead to a positive outcome.
Factor 3: Action
Action separates the dreamers from the achievers. If you want to get somewhere in life you should have a plan and put it into action.
Rich people understand that you must have a long-term goal and a workable plan that you action over time. They understand that you will have setbacks and challenges that you learn from along the way. But if you keep aiming for your goal and keep trying you will achieve it.
Poor people don’t have a plan or goal and live day to day repeating the same habits. They do try change but its short lived when faced with a challenge or failure. They don’t understand the benefit to sacrifice now for future gain.
Lack of knowledge and negative thinking kept me making the same mistakes that led me into debt. I had followed the ways of the poor and I ended up poor.
When I improved my knowledge about how to manage money, my mindset changed. I was able to be positive and discover opportunities to change spending ways. The result was we were able to get out of debt, buy a new car and grow our business
The desire to change made us see our situation differently. Our motivation was the catalyst we used to take steps forward.
I used the comparison between the rich and the poor to show that differences in behavior and thinking can lead to different results.
People are in debt because they get used to their ways of thinking. They do not realize that it’s the day to day decisions that keep them trapped in debt.
Knowledge, thought and action are 3 factors that every person can improve on. No matter what your situation is, you can work on these 3 factors to think more like the rich so you can end up with better results.
The rich are motivated to do something about their situation. They don’t give up until they achieve their goals.
If you want to live your life without debt, then the first step would be to work on your motivation to want to change. What is it that motivates you to get out of debt? Set a goal and make it your focus.
Once you have the goal, you can work on a long -term plan and then daily plans to take different decisions so you can work towards your goal. Keep a positive mindset and don’t lose your faith when you hit a speed wobble on the way.
Everything that is worth it in life takes time so just keep working on your goal. It will materialize if you keep trying.
Knowledge, positive thought and action are 3 factors you can use get yourself out of debt.
Thank you for sharing your time with me. I hope my insight helps you to analyze things from a new perspective.
If you are interested in reading rich dad poor dad, you can find a copy on amazon