Chapter 14: Manage money very well
Find the game where you can win,
and then commit your life to playing it;
and play to win. — Robert Kiyosaki
In his best-selling book The Millionaire Next Door,
author Thomas Stanley surveyed millionaires across North America,
then announced who they were and how they got rich.
The whole result can be summed up in one short sentence:
“Rich people manage their money very well.”
The rich are no wiser than the poor.
It’s just their habits with money that are different and more supportive.
As we discussed in Part I of the book,
habits are formed largely on the basis of previously formed thinking.
So, if you don’t know how to manage your money,
you probably weren’t programmed to manage money.
In addition, most likely you do not know how to manage your money simply and effectively.
I don’t know about you,
but I didn’t take Money Management 101 in high school,
but instead we learned about the War of 1812.
This may not be the hottest topic,
but it leads to the following conclusion:
the biggest difference between financial success
and failure is how you manage your money.
Just simple, To master money, you must first manage it.
The poor often appear clumsy, confused in money management,
even they are afraid or avoid all problems related to money in general.
Many people confess that they don’t like money management because,
first, they think it limits their freedom,
and second, they say they don’t have enough money to manage.
In fact, money management does not take away any of your freedom, on the contrary,
it makes you more free.
Money management allows you to be financially free
so you never have to work again.
I believe that is true freedom.
For those who use the argument “I don’t have enough money to manage” as an excuse,
they are indeed having a wrong view of this issue.
They were observing the stars from the other end of the telescope.
Instead of “When I have a lot of money, I will start managing it”,
they should say: “When I start to manage money, I will have a lot of money”.
The statement, “I will start managing my money
as soon as I get rich” is not much different from
the overweight person’s commitment
that “I will start exercising and dieting as soon as I lose ten pounds”.
If you tie the chariot in front of the horse,
the chariot will not be able to move,
or maybe go backwards! So first manage your money effectively,
then you will have more money to manage.
In Think Millionaire courses,
I often tell a story that makes everyone think.
Imagine you are walking down the street with a five-year-old.
You stop in front of an ice cream parlor
and buy your child an ice cream cone with a round ice cream.
Just a few minutes later, the ice cream melted
and ran down the baby’s small hand,
then suddenly fell to the sidewalk.
The child cries and asks you to go back to the store to buy another ice cream.
And right at that moment,
the kid saw a brilliant promotional photo of an ice cream cone
with three ice-creams that looked appealing.
The child pointed to the picture and happily exclaimed: “I want that ice cream!”.
Here comes a question.
As a kind, loving, and generous person like you,
would you buy your child an ice cream with three sweet balls?
Your first reaction might be “Sure.”
However, when I think back a little,
the majority of people who attended our courses answered: “No”.
Because why would you want to send the child to a certain failure?
The child can’t hold an ice cream cone,
how can he hold the ice cream cone with three?
This example is very appropriate to talk about the universe and you.
We live in a kind and loving universe,
and the unchanging principle of the universe is:
“Unless you prove you can manage what you have, you will have nothing more!“.
Rule of Prosperity No. 31:
Unless you prove you can manage what you have, you won’t get any more!
You have to get into the habit and skill of managing small amounts
before you can get big.
Remember, we are creatures of habit,
and so your money management habits are more important than how much money you have.
Rule of Prosperity 32: Your money management habits are more important than how much money you have.
So how are you managing your money?
In the Millionaire Mind training courses,
I have taught a money management method
that many people consider effective and surprisingly simple.
Here, I will present you with some basic points
so that you can start managing your money.
Open a bank account,
name it Financial Freedom and put in 10% of every dollar you receive (after taxes).
This money is only used for investments, i.e. buying or generating passive income cash flows.
This account acts as a “golden chicken that lays golden eggs” and will give out profit eggs.
When can you use this money?
Never! This account is never used for spending, but only for investing.
Maybe when you retire, you can start using the income from this fund,
but you will never be able to use the original capital.
By doing so, your capital will continue to increase
and you will never have to worry about falling into poverty.
One of my students, Emma, once told me her story.
Two years ago, Emma was about to declare bankruptcy.
She didn’t want to, but her debt was beyond her ability to pay
and she felt she had no other choice.
Then she attended the Millionaire Mindset course
and heard about the financial management system.
Emma exclaimed: “Here it is! This is my helper out of this mess!”.
Emma, like other students,
was taught how to divide her money into different accounts.
“Sounds good,” she thought. –
“I don’t have money to divide!”.
But because she wanted to give it a try,
Emma decided to still set aside $1 a month for her accounts.
That’s right, only $1 per month.
According to our split system, every time she received a dollar,
she would put ten cents into her Financial Freedom Account (FFA).
The first thing she thought to herself was,
“How can I be financially free on ten cents a month?”.
So she decided to double that amount every month.
The second month she put out $2,
the third month $4, then $8, $16, $32, $64,
and that amount increased to twelfth month is $2,048.
Then two years later, she began to reap surprising results from her efforts.
She was able to put $10,000 into her Financial Freedom account!
She also developed such good money management habits that,
when a $10,000 bonus check came to her,
she didn’t need to spend the money on anything.
Now Emma is out of debt and on her way to financial freedom.
It was all because she put into practice what she learned,
even if it was only for a dollar a month in the beginning.
Whether you have a large fortune right now or almost nothing,
it’s a good idea to start practicing managing what you have,
and you’ll be surprised how quickly you’ll have more.
Another student in my Millionaire Mindset course said,
“How can I manage money when I have to borrow money to live like now?”.
The answer is: Take a loan add another dollar and manage that dollar.
Whether you’re borrowing or just making a few dollars a month,
you still have to manage that money,
because here there are not only principles of the “material” world,
but also spiritual principles.
Money miracles happen once you prove to the universe
that you can manage your finances effectively.
Besides opening a Financial Freedom account,
you should have a savings tube in your house and put money into it every day.
It could be 10 dollars, 5 dollars, 1 dollar, a penny, or your pocket money.
The amount is not as important as your habits.
The trick here is to focus on your goal of becoming financially free.
Every day, every day,
Everything will attract things like it.
Money will suck money,
Let your savings tube become a magnet for more
and more money and opportunities to help you become financially free.
I guess this isn’t the first time you’ve heard advice
to save 10% of your money for long-term investment goals,
but it might be the first time you’ve heard
that you must have an equally large account for your money,
the opposite goal,
which is reserved for consumption and play.
One of the biggest secrets to money management is balance.
On the one hand,
you want to save a lot of money to invest and earn more money.
On the other hand,
you need to put another 10% of your income into a “Account”.
The Enjoyment clause”.
Why so? Because man is a unity.
You cannot affect only one part of your life without affecting the others.
Some people are busy saving, saving, saving,
and when the responsibility and reason are satisfied,
the inner part is not satisfied.
Ultimately, the need to find joy will speak up: “I’ve had enough.
I also want to be noticed”, and it begins to struggle,
even destroying the achievements you have built before.
On the other hand, if you just spend and spend,
not only will you never get rich,
but the responsible part of you will eventually create situations
where you can’t even enjoy the things you enjoy.
What you spend money to get,
and sometimes you will still carry heavy guilt.
That feeling will urge,
making you unconsciously overspend as a way to express your feelings.
While you may feel a little comfortable at first,
you will eventually return to feeling guilty and ashamed.
This is a vicious cycle,
and the only way to get out you have to learn how to manage your money effectively.
Your Enjoyment account is mainly used to pamper yourself,
to do things you wouldn’t normally do,
such as dining out at restaurants and ordering the best bottle of wine,
or renting a Cruise all day,
or rent a hotel room,
luxury to enjoy a night immersed in pleasure and luxury.
The rule of this account is that it must be “disbursed” every month.
Yes! Every month you have to spend some of the money in
that account in a way that will make you feel rich!
The only way most of us continue to do so is by having fun to pay off our efforts.
This account is also designed to strengthen your “reception”
and make money management more enjoyable and enjoyable.
Besides the Enjoyment Account and Financial Freedom Account,
I recommend creating four more accounts, which are:
20% for saving, deposit and invest assets
10% for Education account(Buy books, training cost)
20% for sub-accounts(for example: extra expenditure, party, wedding, family cost, sick, clothes)
50% for stable expenditure, you have to pay monthly(for example: Rent house, petrol, food)
Poor people think it all depends on income,
meaning you have to earn a lot of money to become rich.
That’s a very simple way of thinking!
In fact, if you manage your money the way I guide you,
you are completely capable of financial freedom
with only a relatively low income.
If you do not know how to manage money,
you will never be financially free,
even if you have a high income.
You see, there are still many
High-income professionals such as doctors, lawyers, athletes fall into dire straits.
So the key issue is not how much money you have,
but how you manage it.
One of our course attendees, John, confesses
that when he first heard about this money management system,
he thought: “How monotonous!
I don’t understand why people take time to do this?”
It was only near the end of his final course
that he realized that if he wanted to be financially free soon,
he would have to manage his money now, as the rich do.
John had to learn that new habit,
because it wasn’t his natural habit.
This reminded him of a while ago,
when he started doing triathlons.
He is a very good athlete in swimming
and cycling, but he hates running.
His legs and knees ached, and his back ached.
After each training session,
he felt his whole body stiffen,
his lungs burned and he could only sit and gasp,
even though he wasn’t running very fast!
All these things made John dread running.
However, he knew that if he wanted to become a great athlete,
he had to practice running and accepted
that act as part of the work he had to do to achieve success.
Previously, John tried to avoid the subject running,
but now he decided to practice running every day.
After only a few months,
he started to get used to it and felt like it.
For John, the awkward and unfamiliar area of money management is akin to running.
At first, he hated it, but gradually he really liked it.
Now, you keep looking forward to the pay period to allocate
that money to different accounts!
He also enjoys watching his total net worth gradually
increase from zero to over $300,000 and continue to grow day by day.
In short, either you control the money,
or the money controls you.
To control money, you must manage it.
Rule of Prosperity No. 33:
Either you control the money, or the money controls you.
I love hearing students share their thoughts
that they have felt more confident in money matters, success,
as well as confident in themselves,
since they know how to manage money effectively.
The most positive aspect of this feeling was that confidence spread to other areas of their lives,
making them happier through relationships,
and even improved their health and benevolent.
Money is an important part of your life,
and when you learn to take control of your finances,
all areas of your life will improve.
The reason most people never get rich is
that they never even consider it a possibility. – Grant Cardone
Place your hand on your chest and say…
“I am a great money manager!”
Then you put your hand on your forehead and say…
“I have a Millionaire Mindset!” We are self made millionaire.