Secret of the Millionaire Mind: Wealth File #14 Rich People Manage Their Money Well

This is a chapter-by-chapter summary of a book by T. Harv Eker’s Secret of the Millionaire Mind: Mastering the Inner Game of Wealth (2005) series. One chapter, one article. Read this summary, buy the book. Enjoy!

Wealth File #14:

Rich People Manage Their Money Well.

Poor People* Mismanage Their Money Well.

Thomas Stanley, in his best-selling book, The Millionaire Next Door, surveyed millionaires and one of the results of his finding can be summed up in one short sentence: “Rich people are good at managing their money.” Rich people are not any smarter than poor people*, they just have different and more supportive money habits. That’s important! Not smarter, but know how to manage their money. The issue is not intellect, but habit and action. To put it simply: To master money, you must manage money! And to manage money to you need to take action – learn, learn, learn, and try, try, try.

The saying, “I’ll start managing my money as soon as I get caught up” is like an overweight person saying, “I’ll start exercising and dieting as soon as I lose 10kg.” It’s putting the cart before the horse, which leads to going nowhere, or worst, backward! First, you have to start properly handling the money you have or as Harv Eker puts it, “Until you show you can handle what you’ve got, you won’t get any more!” If your son couldn’t handle his Vespa (the Italian scooter), would you buy him a motorbike? Since Eker wrote this book in a very straightforward way, let me also do the same… to put it bluntly: Don’t be stupid and wait for having much money to manage, you’ll die waiting! Start right now with what you got. Every master once started small. “The habit of managing your money,” reminds Eker, “is more important than the amount.”

A Universal Law goes like this: Until you show you can handle what you’ve got, you won’t get any more. This is also true in how we manage our money, even if we only have little. Again, to make the question more personal, if you can’t even handle little money, why would you get more? What does matter is that you immediately begin to manage what you’ve got and you’ll be in shock at how soon you get more. Okay, so how can you do that? Eker advices the readers to create six (6) accounts (first two are most important):

Financial Freedom Account – 10%

Play Account – 10%

Long-Term Savings for Spending Account – 10%

Education Account – 10%

Necessities Account – 50%

Give Account – 10%

I’m not following exactly what Eker suggested here. The main point is: Manage your money. Or as the author reminds his reader, “Either you control your money, or it will control you.” To control money, manage it. He continues, “Money is a big part of your life, and when you learn how to get your finances under control, all areas of your life will soar.” I regret that I was doing the opposite a few years ago. It’s not too late, you and I can start now! Check your wallet now, if you have RM10 in it, put RM1 into your Financial Freedom Account. Start small, start now.

[*I need to note that the Harv Eker makes it clear in this book that he does not mean to degrade poor people. He does not think that rich people are better than poor or middle-class people. They’re just richer.]

I Have A Millionaire Mind!