being frugal make you rich

You Can’t Shrink into Greatness….

Do you think that being frugal make you rich? Too many people think that the rich are rich because they’re cheap. Many assume that they horded and horded all of their dollars and cents until they had the money to live the dream life down the road. But when you take a look at how most self-made millionaires climbed to the top, almost none of them can say they did it by playing it cheap.

being frugal make you rich

Scarcity Mindset…

The first problem with the cheapskate theory is that being cheap creates wealth at all. Let’s take a moment to think about what it means to be cheap. There’s a reason you find the word “miser” in the word “miserable.” Constantly focusing on what you can’t afford to lose is daunting. People who obsess over themselves tend to get sucked into a very small stagnant mindset. They become overly adverse to risk. They close themselves off from new people, places, and opportunities. They begin to think about what can’t be done rather than what can be.

The scarcity mindset is essentially a place of fear. Fear keeps you from allocating your money where it needs to be put at some risk in order to grow. It keeps people from maximizing relationships, and recognizing the opportunities that could change their lives.

Don’t get me wrong. The rich are fiscally responsible. Not spending money that you can in should is the definition of cheap. But not spending money you don’t have, or that can be put to better uses is called wisdom. In my opinion, many poor and middle class people remain broke because they don’t understand this difference. They’re cheap where they need to be wise. And they’re wasteful where they need to conserve.

Saving doesn’t make your rich…

The other problem with the cheapskate theory is that it implies simply by saving money, you can amass wealth. Let’s imagined you are a true hermit. You eat crackers and water. You shop for bare necessities only. You live in your Mom’s basement. And you drive a used car to only go to and from work. And let’s say you also manage to get paid $150,000.00 a year. Imagine that after all the taxes and costs of living, you were able to save $130,000.00 a year over 20 years. That’s only $2.6 million dollars……which isn’t really rich at all.

The rich at least have to let go of their money in order for it to work in their investments. In general, the rich are more likely to risk more money, spend more money, and donate more money even as they’re still in the process of becoming rich. The truth is that becoming rich requires the mindset of abundance. And abundance only comes once you let go of fear, and use your resources in a way that feeds your spirit. That generally entails showing love to yourself, showing love to others, having a sense of adventure, and believing that there are enough opportunities in the world to take care of you as you venture on your path. Those who get rich in a decade or less generally believe in the ability to manifest wealth through experiencing self-reward, and letting that motivate them to keep pursuing their mission.

So the reality is that the rich TEND to be more open and clear about spending. They recognize that money tends to come by allocating it wisely rather than hording it. So the next time you look at the rich and assume they’re cheap, take a moment to think. If they’re that far ahead of you, perhaps it’s time to evaluate your own mindset.

About The Author

herbertkoehler

I am a college drop out who found my passion as an investor. I love the many facets of finance, investing, and business. But even more than that, I love sharing what I learn with others.

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