Here I am again, as always, in the lab working on things. I started formulating in my mind the things I want to teach, different ideas when I’m like, "Oh, this is so good. I have to share this with everyone!" If you ever wondered where I come up with my podcast topics or live stream topics, usually it's just me doing random stuff, working on different things and then me saying, "Oh my goodness, I'm going to share this.
"A few weeks ago, I was in New York working on some really cool top secret projects, which I will actually be announcing pretty soon. I've been thinking about ways to make sure that this top secret project is super successful, not just for me, but successful for the people who participated in it; because as always, the reason I do this is because I want you to think and grow and succeed.
I was thinking about what are some key principles that my best clients and more successful clients have had, so that I can make sure that I integrate them into this new cool top secret project that I'll be talking about soon enough, right?
What’s the difference between these clients? It is an interesting question for me to ask because I do have a screening process before I begin working with anyone, one-on-one. I want to make sure that people are at a certain place in their business, I also like to make sure that people have a certain mindset. When I think about my client Hall of Fame, there are just some people who really knock things out of the park and take it to the next level. I've had quite a handful of clients who have just been superstars, so I'll be shouting them out in a few weeks.
I was thinking about what really made all the difference? What made my creme of the crop, my creme de la creme? What did the superstar clients do that I want to impart to everyone else? Everyone started at almost the same level in their business, so it wasn’t like some came with more people or more followers than the rest, so what is it?
Even with my group of friends, there were some who really took it to the next level. They thanked me for my help, for something I didn’t realize I had even shared with them. So again, what is it about people who just really kill the game versus the people who don’t.
I’ve come to realize that it is definitely a mindset thing. It's not a starting place issue. I've noticed that people who are really successful, when it comes to financial success, business success, getting their business off the ground, creating streams of income and all of that, are successful because they don't have a scarcity mindset.
I was like oh my goodness! That's it. That's the only thing that I can think of that's made all the the difference.
So what does it mean to have a scarcity mindset? Some gurus use the word scarcity mindset to make you purchase all those stuff they’re selling. That’s not what I am talking about.
In this podcast, I talked about what scarcity mindset is all about, and how not to have it.
For the full audio, please check out the podcast on iTunes and Soundcloud.[podcast]
Notes from the Podcast:
How not to have a scarcity mindset
- Investing in yourself is not a one-time event but a long-term attitude.
Investing in yourself is a mindset. It is an attitude.
It's not a one-time event, investing in yourself is a long-term attitude.
I think the best way to demonstrate this is to give an example: My mom. Growing up, my mom was totally the baddest financial manager that I knew.
She was just really legit, always was the one in our family that managed money really well and everybody came to her for advice, even my own friends. I'm like, "Seriously guys, my mom doesn't know everything," just kidding, but she's really good at managing money.
One thing funny thing that I remember growing up was that my brother and I used to make fun of my mom because she would always pay somebody to do odd jobs around our house, and we thought it was ridiculous.
She would hire professionals do things around the house like painting, handyman stuff, fixing things, building things and for as long as we lived there, she was always hiring people. So we’d ask her, “You always need a professional, mom?” It doesn't make sense.
And we only came to realize its importance when we had to sell our house during the housing crisis. It was really sad because a lot of my parents' friends' families, went through foreclosures, some had to do short sales, or they had to sell their house for way less than what they bought it for. It was a really scary time. I remember my parents being kind of nervous. They were building a new house elsewhere, so the need to sell our current house was urgent.
While it took longer to sell, our house on the block was probably one of the only ones that sold for right about how much it was bought it for. Think about this, now, that's definitely not a win in the sense of what a homeowner would want. Obviously, if you buy a house and you live in it for 10 years, you would hope that it would appreciate, but given the nature of the economy at that time, it was amazing that my parents' house sold for what they bought it for.
When we asked Mom what she thought was the case, she laughed and she was like, "All those years you and your brother used to laugh at me about hiring a professional to do this and to do that, what you don't realize is to a layperson, if I paint the walls and I know I'm not a professional painter. I'm not even like really crafty or handy or good at painting, or I try to touch up the drywall or I try to do this or I try to do that, to your untrained eye, it might not seem like a big deal. But because you're not a professional, you miss those subtleties."
I finally understood what Mom meant by that. Over time, over the years, if she had done everything herself, if she had been scared to spend money, the house would have looked sloppy. But because she made sure that she always hired professionals because they are professionals, they can see things that the untrained eye can't see as a layperson.
This is not necessarily a story about my mom and her propensity to maintain houses well or her hiring professionals, but it's about that mindset. That's what it means not to have a scarcity mindset.
- Invest in yourself from a standpoint of finances, time and energy.
There are a lot of people who want financial success, business success. They will psych themselves up to get to a place where they're spending money to get started, and then they drop and curl back up decide that they’re done with it.
Two questions: (1) Are you continuously putting in the effort and energy in it? (2) Are you willing to maintain your investment?
Because here's the thing, you have to understand that the value of what you invest in is not just for the result, but there's value in that asset in and of itself, if you are truly building an asset.
There are many people who are signing up for programs or trying to get information, not because they value the information for what it is and what it can actually teach them. Education is value in and of itself, but if you learn something from someone or you receive mentorship from someone, no one else can take that away from you. That is something that you always will have.
That in itself is valuable. Don’t miss the value of things you are investing in waiting for the return but not really doing what it takes.
A scarcity mindset is not just scarcity around you having money, at the end of the day, it's scarcity around your ability to generate that income back.
- Invest in your ability to get more money.
The biggest shift that happened for me was when I got to a place where I was no longer afraid of money. There are a lot of people who are afraid of money, afraid of not having enough of it, afraid of what's going to happen if we lose our job or things or whatever. We give money so much thought, we make it way bigger than what it has to be in our minds. I read a book called Secrets of Six-Figure Women which was written by Barbara Stanny and she interviewed women who have a propensity to earn six -figures or more, meaning no matter what kind of job they get, even if they get fired, when they get a new job, they're always the top earners. And then, there are women who, no matter what kind of education they have, women with PhDs, master’s degrees, highly-educated women who have a propensity to what the author called, under-earn. No matter how much education they have, they have this propensity to under-earn and they can’t figure out why.So, as a chronic under-earner, the author went on a quest to study these six-figure women as well as the women who can't get it together financially in hopes of figuring out what the difference is.
It was interesting to know that the women who were chronic under-earners, didn’t ask for more money when it came to negotiations in job interviews. They didn't want to do anything to invest in their ability to get more money because they think they are not one of those people that cares about money, that they’re not greedy like those wealthy people or those rich people.Instead, they opted to focus on the what they love to do, focus on their work. They won’t negotiate. They don’t go to seminars, won’t learn how to network. In short, they won’t invest in themselves in anyway. They just wanted to get more “education” because that’s the one thing our society has been taught that in order for you to get more money, you need to keep getting degrees. They didn’t want to go to seminars or conferences that teaches or focuses on having money, just because they don’t want to be one of those greedy people. This was the recurring theme that the author noticed that women who were having difficulties succeeding had in this book.
And then there were the six-figure women, no matter what their situation in life, they were able to command a good income for themselves and negotiate. She asked them what their mindset was and it was so fascinating. These women said, "I don't want to be greedy. I don't want to focus on money, so I do what it takes to make sure that I can command the top dollar no matter what room I'm in."
The real difference between these two groups of women was their mindset. The six-figure women's reason for investing in themselves, for learning negotiation skills, for demanding a higher salary at the negotiation table when they're getting into a job, is because they don't want to be one worrying about money. They don't want to be one of those people who’s always worried about it, always obsessed with it and always wondering if they have enough.
- Make Thy Gold Multiply
There’s another book that I read and recommend called The Richest Man in Babylon. Hands down, this is the best book on personal finances I think and maintaining a money mindset. This book is everything! Written by George S. Clason during the Great Depression, it was first published in 1926. In this book, set in the Middle East and written in the style of parable, are seven lessons that he gave to these men who came to ask him to how to be financially successful. These lessons were all good, but one thing that really changed my mindset was when he talked about “making thy gold multiply". We all have this understanding that we need to control our expenditures, meaning things that we are spending money on. We understand we need to be mindful of our spending, right?
This book taught about making sure we do not feed to our every wish and whims and that we don’t bleed ourselves dry financially. It also taught to save a portion of everything that you earn. That was the biggest financial mindset shift that I had to make.I had to get in the mindset that I had enough to save 10%. A lot of people are thinking about saving money, but they can’t because they are not making enough money. But even if I was having financial difficulty, earning 12 or 13 dollars an hour, I was still able to save 10% even when I had debt.
The other lessons that I really learned from we’re “Start thy purse to fattening”. This is the first one, and this is where you will be taught to save one coin out of ten. Then there’s the second cure, “Controlling thy expenditures,” which is to not have unnecessary expenditures.
And then the third cure, "Make thy gold multiply," which I feel really got me on the savings bandwagon. I read it again a year or two later, and it was this that really changed my mindset and really speaks to what I'm talking about today in terms of not having a scarcity mindset and really understanding how it can affect your finances if you do.
It's the idea that after you've saved, a portion of your expenses also needs to go to investments. This is so huge and people do not teach this.
We are taught to not overspend, great. We're taught to save at least 10%, and then that's it. But no, if you want to have financial independence, to secure wealth for you and your family, you also need to take that savings or at least part of your savings and make it multiply. How do you do that? Through investments.
You don’t have to wait until you’re 50,60,70 to think about making investments. Get into the habit now of taking one-tenth of all your earnings and putting that towards favorable investments. You have to retrain your mind to not see investments as expenses. Investments are different than expenses, because when you put your money out, at some point it is supposed to return back to you.
Now, that might not be instant. It might not be tomorrow. It might not even be next year. But just because it doesn't return to you next week or next month doesn't mean that you should not continue investing in it.
- Understand how money works.
Another thing that I think is very interesting is that you have to understand how money works. I'm super passionate about this because I worked in finance before I quit my job. Particularly in government finance, banking, banking insurance. I was very privy to economics, treasury rates, federal reserve and how money works from a global standpoint. You can see it or hear it in the language that is used about money, but isn't it interesting that we don't apply that to our own financial practices?
Money is called “currency”. It was really interesting when I was working in banking, successful businesses always had a practice of putting money out and waiting for it to return back to them. They were participating in circulation, currency. Money is supposed to go out and to come back in.But for most of us, money comes in from one entity, from our job, and then it goes out to a series of other entities, like AT&T, Comcast, Safeway, Netflix, Zara, whatever else, and that money never comes back. What do you have to do to maintain the circulation of money so you can maintain your lifestyle? You go back to the nine to five, back to work because you’ve got to trade hours for dollars to continue this current that you got going on in your lifestyle.
You go back to work, give them more hours for a dollar, you get back your dollar and then what? So you can pay AT&T, Comcast, Netflix this month. You can go to Zara or Hollywood Nails to get your nails done. But that money that goes out, it never comes back. And that cycle goes on. All money is a cycle, but the average nine-to-fiver middle class American, has it backwards. The money that's going out is not coming back.A lot of the money these wealthy people, business owners, and people who are financially independent send out, always comes back to them. With more money. They use that extra to fund their lifestyle expenses, Zara, Ruth's Chris, AT&T, whatever, but the bulk of that they're sending it back out to other investments that are going to come back to them.
I’ve made some really big investments that were super scary. I’ve been involved with two masterminds, worked with three different coaches, and these investments were like thousands of dollars and it was painful. I also have the ongoing expenses to maintain my website, web type hosting or email marketing, right?
My VA’s who are helping me with backend stuff, customer service and graphic design, all of those are expenses. When I think about those investments that I've made, it has come back to me, in portions, and then some, all of it. So that's why you spend and invest differently. All the money that I have invested and continue to invest, comes back to me every single month and it became such a strong revenue stream that I stand before you now, able to step away from the nine to five situation and relying from it to fund my expenditures, and now this is my circulation. This is how money circulates from me, and so I'm able to pay for some of those expenses and others, and put money back into things. I love it because now I'm already thinking about other things that I can do.
- Organize your spending.
So this is how our finances look like, 10% off the top we tithe. We believe in that. Another 10% minimum we save, but another 10% goes to investments. Before I even had a business and knew what my business was, or what kind of investment I should be even getting into, I was spending on education, on figuring out what the investment should be for me.
If you don't know what you should invest in, what kind of business you should start, still put yourself in a habit of taking a line item, the goal is at least 10% but do what you can from the start. I'm a believer if you can spend 200 dollars on cable every single month faithfully, you can dedicate at least that amount to learning what your investment should be.I invested in online courses trying to know how blogging works, how people make money from this, etc. After several months of learning that information, it was like oh, okay I got the structure, I think this is something I can do. Then, I started investing in my actual business because I had one.
That's what it means to have a scarcity mindset. It doesn't just mean an unwillingness to invest in yourself, but understanding that investing in yourself is a long-term attitude. It's not a one-time event. Get into this mindset where this is not only acceptable, but it's fashionable, something that we encourage our kids to do. Get to a place where you understand that a portion of your income shall go to investments and investments in yourself. Think broader about what an investment is --- your own business, your own education, your own enrichment.
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