Bank Deal: Earn 1.00% APY on an FDIC-insured savings account at Barclays Bank.
I come from middle-class roots and was brought up with what I’ve recently heard referred to as a “middle-class money mindset.” By that, I mean that I’ve been primarily concerned with:
- Getting an education
- Developing a skill/career
- Honing that skill
- Using that skill to work and trade time for money
- Saving that money
- Working to a ripe old age, and then retiring
- Living happily ever after
More recently, I’ve come to realize that this isn’t what I want out of life. Rather, I want to develop a “wealthy money mindset.” By that, I mean that I want to:
- Embrace the concept of compounding interest
- Always spend less than I earn and avoid debt
- Save/invest as much of my income as possible
- Achieve financial independence
- Spend my “work” week pursuing my passions
- Never retire, but rather continue pursuing my passions
- Give generously
Wealth is, of course, a very personal concept, so your definition might differ from mine. That’s fine — to each his own!
The following is a brief synopsis of how I came to realize that I need to abandon my middle class money mindset and replace it with one of passionate, wealthy living.
After graduating from high school, I secured student loans and worked part-time as a waiter to put myself through college. I chased after the “middle class dream” of getting a degree and building a career in hopes that it would lead me down the path toward wealth and peace of mind. At the time, I had no personal definition of wealth. The only “goal” that I had was that I wanted to do whatever I wanted whenever I wanted. I was truly ignorant and clueless.
In May of 2000, I graduated from college with a degree in Information Technology. I had over $30k in student loan debt and more than $5k in credit card debt. As far as the world was concerned, I was finally ready to start my career and begin trading my time for money!
As I continued down the path of modern consumerism, I was indifferent toward my personal debt. Then, about six months ago, I finally had my fill of running on the hamster wheel of life and getting nowhere fast. I started a personal finance blog, committed myself to debt reduction, and vowed to pursue my newfound passion all the way to financial freedom.
My extreme mindset makeover
In a recent discussion with my father I told him that I had rewritten my entire view of money and wealth. Intrigued, he asked me to elaborate. I explained to him that I had come to the realization that I needed to get out of debt, reduce my standard of living, spend less than I earn, give generously, save the difference, and eventually live off the interest. Knowing me from birth, and knowing my traditional spending habits, he was flabbergasted to hear such words coming out of my mouth.
I actually fell off the middle class mindset cliff the day I sat down and figured out exactly how much of my money goes toward interest payments month in and month out. If you’re in debt, I suggest that you do the same. Once I realized how much of my money was going toward interest payments, I was able to put my debts in proper perspective. From here, I:
- Developed a financial philosophy based on sacrifice – The more I sacrifice in the short term, the faster I’ll reach my financial goals. I’d much rather sacrifice when I am young, than worry about money in my later years.
- Discovered the importance of financial mentors – My mentors are people who have already accomplished what I have set out to accomplish, and are currently living the life that I want to be living. Conferring with these mentors helps me to continually transform my financial thought process from that of a middle class man to that of a wealthy man.
I’m now committed to doing the following in pursuit of financial freedom and wealthy living:
- Eliminating all debt including my mortgage
- Simplifying my life
- Saving aggressively, increasing as my debts dwindle
- Giving generously, increasing as my debts dwindle
- Pursuing my passions and developing income from them at my own pace
- Continuing saving/investing until I can live off my nest egg
These last points are going to be unique to each of us, but the general principles of my extreme mindset makeover stand. Now I just have to figure out how much I want/need to save before I start giving the surplus away, but that’s a topic for another day…
- How to Become a Millionaire
- How to Get Out of Debt
- The Best Dollars I've Ever Spent
- How Our Estate Plan is Structured
- How We Paid Our Mortgage In Less than 10 Years
- Money Making Ideas
- How to Manage Your Asset Allocation with Multiple Accounts
- Consumption Smoothing - Save While the Saving's Good
- How to Save on Groceries
- How Much Life Insurance Do You Need?
- Eleven Great Books About Money
- Dave Ramsey is Bad at Math (692)
- Dish Network Customer Service SUCKS (534)
- $8,000 Homebuyer Tax Credit (429)
- Pay Off Mortgage Early or Invest? (424)
- How to Claim the First-Time Homebuyer Tax Credit (352)
- Termite Control: Sentricon vs. Termidor (325)
- How Much Should You Pay a Babysitter? (284)
- Ethanol Blended Gas = Lower Mileage? (272)
- Reduced Credit Limits? Share Your Experience (256)
- $15,000 Homebuyer Tax Credit (242)
- Buying Furniture off the Back of a Truck (227)
- Will Mac OS X Lion Kill Quicken 2007? (191)