Step 1 : Change Your Mindset
Real entrepreneurs are not after the big bucks. They follow a bigger vision in life and therefore I believe the most important area to start with is yourself and your mindset. This starting guide is strongly focused around personal development.
The following video is a talk of Stuart Wilde that explains very clearly the idea of money and how the society works. I highly recommend it if you are not familiar with that topic yet.
You will get a clearer picture of why wealth is not equally distributed among all people and why only 5% of all people own 95% of the wealth.
The Mindset difference between the two “E”‘s
Entrepreneur vs Employee, freedom vs stability. To become a successful entrepreneur you have to make a crucial shift in your mindset and plant a seed that grows over time. We live in a society that is limited by rules. Rules that limit us in our understanding of what is right and possible.
When we grew up, our society tells us to get good grades at school and avoid failing. We should visit a renowned university, probably take a loan, stay there for 5 years and get a degree in order to find a good job afterwards. Then in our job we should work hard, climb up the career ladder, earn more money, take a loan to buy a house, pay into a retirement fond, repeat for 40 years and retire happy.
If you live in an environment like this where everyone is following the same rules, it is just very hard to get out.
Entrepreneurs on the other hand understand that the rules are just a made up fence to prevent them from achieving more. The following list should illustrate the main differences in thinking between the two “E”s.
- Entrepreneurs are seeking for opportunities to improve the world whereas employees are looking for problems to point at.
- Entrepreneurs understand that they rely on smarter people to solve problems whereas employees want to fix things themselves to get recognition.
- Entrepreneurs work for personal growth whereas employees work for reviews and promotions.
- Entrepreneurs understand that failing is part of winning whereas employees avoid to take risks.
- Entrepreneurs take control of their own future whereas employees expect others to to take care of them.
The 100-Men Study
A study published by the social security administration in the early 2000 is a research that took 100 people from their beginning of their career until the age of 65 when they retired.
The outcome was that around 66% of all people had an income less than 20.000$ annually, 16% were dead, 14% had an income above 30.000$ and only 5 were financially stable with an annual income above 50.000$. Now think about this: only 5% reach financial stability (not rich!). To which group do you want to belong to?
Money is an Idea!
Let’s talk about money. Unfortunately money is something that we cannot live without and that controls our lives to a certain degree. We cannot live without money! Yet, so many people see money as something evil:
“Money won’t make you rich.”
“Money will not make you happy.”
“Money can’t buy you everything”
Whenever I talk to people about the topic of money, we tend to have discussions that don’t go anywhere because average people have a different believe system.
But unfortunately if you believe that money is something evil, you will NEVER be able to make more money because you will create a barrier for yourself that blocks you from thinking differently.
The problem is not money itself. Money alone will not solve your problems. Money is just an idea. You should perceive money as a tool that you should take advantage of in order to reach your goals. You have to create a mindset where you don’t see the necessity to work for money, but instead leverage it and let it work for you. Stop chasing after promotions but learn to invest and how to build a business.
Money today is just a number on a screen! It becomes less and less tangible. Since Nixon took off the Gold Standard in 1971, which literally meant that money could be printed to eternity, our money became fiat money with no intrinsic value besides the number that is printed on the paper.
You cannot survive without money, so try to make use of it to reach your personal goals. You have to change your old believe system where money is root of all evil and start to get financial literate. Either become one of the 95% or join the 5%. Keep in mind that money itself won’t make you happy, but it can get you the things that makes you happy.
How to reach financial freedom
In order to achieve financial freedom you will not get around focussing your energy on creating assets and business systems that generates passive income. To understand this it is important to understand what “financial freedom” is. Simply put:
“Financial Freedom is when your passive income exceeds your expenses in a defined timeframe and that you don’t have to exchange your time for money.”
Financial freedom cannot be achieved by exchanging your time for money, aka having a job or a freelance “business”. In this type of work, if you stop working, your income stream will dry out. It is as simple as that.
Therefore you have to create assets that generates passive income for you, 24/7. Good designed business systems will work for you even when you sleep, are sick or traveling.
You have to switch your mindset from being a “consumer” to becoming a “producer” and create value for other people. In order to make millions you have to serve millions.
In order to change your mindset you have to embrace yourself to new point of views. You have to train your unconscious mind to think differently. What your unconscious mind absorbed over the years cannot be changed over night. But every journey begins with a single step. I collected a list of useful (and free!) audiobooks that helped me along the way and I hope will also help you.
- Listen to Rich Dad Poor Dad Audiobook
- Listen to The Magic of Thinking Big
- Listen to The Science of Getting Rich
Pro Tip: You can download the mp3 by pasting the link into YouTubeToMP3 and listen to the audiobooks on your smartphone