Friday, January 25, 2019

Secret of the Millionaire Mind: Wealth File #15 Rich People have Their Money Work Hard for Them


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 #15:
Rich People have Their Money Work Hard for Them.
Poor People* Work Hard for Their Money.

The more your money works, the less you will have to work,” said Harv Eker. The idea that you have to work hard to get rich is “bogus”! Eker suggests that if you want to be rich, let your money works for YOU. The magic word is working smart. That’s what the rich people have mastered, he said. The rich no doubt has to work hard, but only temporary. They work hard like everybody else but they think long-term and what they do with their money is smart – they save it to invest it later. First, they work hard for their money and later, they let their money work hard for them. Why do they do that? Because they want to be financially free!

My definition of financial freedom is simple,” writes Eker, “It is the ability to live the lifestyle you deserve without having to work or rely on anyone else for money.” How is that possible? He said you need passive income. In short, you become financially free when your passive income exceeds your expenses (Income > Expense). There are two primary sources of passive income outline this wealth file. The first is “money working for you.” This includes investment earnings from financial instruments such as stocks, bonds, or other assets that “appreciate in value and can be liquidated for cash. Assets are the key here. These are investments in things that (hopefully) gain value over time.” Like buying land and selling it at a later point (when it has gained value).

The second major source of passive income is “business working for you.” This entails generating ongoing income from businesses where you do not need to be personally involved for that business to operate and yield an income. An example of this would be buying real estate and rent it out. “The idea of passive income is to generate income without having to actually work. Yes, this is possible!” Eker emphasis this: “Rich people think long-term. They balance their spending on enjoyment today with investing for freedom tomorrow. Poor people* think short-term. They run their lives based on immediate gratification.” You have the power to make choices. It’s a matter of priorities. “Poor people think now, rich people think balance.”

So, make the right choices and save some money today so you can invest tomorrow and be financially free the day after tomorrow. Like what Eker said, “Rich people see every dollar as a ‘seed’ that can be planted to earn a hundred more dollars, which can then be replanted to earn a thousand more dollars.” Awesome! From what I’m reading, that how the rich got rich! Hard work today, smart work tomorrow, and no work the day after tomorrow… pretty cool, right?

[*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!

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