Mindset plays a much bigger role in reaching our financial dreams than most of us realize. The good news is, you can work on your mindset without spending a dime.
Today’s post touches on a timeless book, nearly 100 years old, with some financial advice garnered from the greatest financial minds who ever lived. And while there have been thousands of “financial gurus” over the years, who better to study and learn from than some of the wealthiest people in history?
Andrew Carnegie (1835-1919) was one of the wealthiest businessmen of his day. His fortune would today be valued at approximately $75 billion, according to Wikipedia, and his story is a tale of rags to riches.
Carnegie taught his contemporary Napoleon Hill his recipe for fortune and accumulating wealth. Once he was convinced Hill had grasped the concept, Carnegie asked him if he might invest 20 years or more to share the secret with the world, in order to help others create great fortunes.
Twenty years is no small amount of time, but Hill felt compelled to research the power of the secret Carnegie had shared with him, and accepted the assignment.
After 20 years of research, studying well-known men who had accumulated great fortunes with the aid of the Carnegie secret — Henry Ford, Theodore Roosevelt, John D. Rockefeller, and Thomas Edison, to name a few — “Think and Grow Rich” was written and first published in 1937.
The book went on to sell more than 15 million copies and today is considered a classic in the world of making money, motivation, and goal setting — all things essential to helping you achieve your financial dreams and building your fortune. The moneymaking secret Hill found has been carefully analyzed and studied ever since, and put to use by hundreds of thousands of people from all walks of life.
These principles are just as relevant today as they were when the book was written. They can change your life and bank account for the better if you are willing to learn and follow them with pigheaded discipline.
After studying and analyzing 500 of the most successful people of his time, Hill found that each of the men he interviewed had one thing in common. It wasn’t brains. It wasn’t a good family name. It wasn’t traditional education; Henry Ford’s story will attest to that. It wasn’t working in a specific field or industry.
The one common trait Hill found in all his subjects was a major definite purpose.
Take an average man with a clear purpose and he will run circles around the brilliant man who isn’t sure what he wants. So the first takeaway to get your financial house of cards in order is to figure out what you want. What is your No. 1 financial goal right now? Grab a pen and jot it down.
Another way to think about it: What financial goal, if you achieved it, would improve your life more than any other?
Hill found every single one of the wealthy subjects he studied had a singular focus, a burning desire and the persistency to stick with the goal until it was accomplished. It was what they thought that counted and helped them build their fortunes.
Desire (the First Step to Riches)
Let’s say you get a job as a software developer because you like the starting salary. You stick with the job for a couple of years before the company runs into some serious competition, which results in salary freezes for all employees. If you took the job for the pay alone, the pay freezes might cause you to look for another job.
Let’s take that same instance, and say that instead of the starting salary (which would remain the same as the first example), you took the job because you believed your company was creating software that would revolutionize education and provide free schooling for hundreds of millions of people around the world. A few years in, the market competition heats up and salaries freeze, but this time, instead of prompting a search for another job, the competition reinforces why you are there — to revolutionize education.
One of the most common causes of failure is the habit of quitting when we are faced with temporary defeat. Having a clear purpose lets us know why what we are doing matters and helps us forge through the tough days and setbacks.
Let’s apply this to a hypothetical financial situation.
For example, say your goal is to pay off $25,000 in credit card debt. The thought of paying down debt is nothing to get excited about, or is it? When the debt is $23,000 instead of $25,000, or paid down to 18 grand, will you really feel any better? Will the $2,000 reduction in money owed feel better than a $2,000 shopping spree on a new MacBook? Probably not.
Resist the urge for instant gratification. A strong desire will help keep you focused on the prize to overcome your impulse purchases. And once the debt is paid off, then what? You save an extra $300 a month.
Many will justify impulsive spending and ignore paying down debt, because they fail to approach the goal with the right mindset.
What if, instead of thinking about paying down the debt for the sake of paying down the debt, your why for paying down the debt was to spend more time with your new daughter? What if paying off the credit card meant you could leave work a few hours early every Friday to spend more quality time with your daughter before her nap? Would that motivate you to pay down your debt faster?
For most, it probably would, but for others it wouldn’t. The why should be specific, and it should be personal. Something you’d be absolutely ecstatic about achieving. And choosing someone else’s why certainly won’t create a burning desire in you.
Without a strong why, you may find yourself succumbing to spontaneous purchases and continuing to rack up interest charges, as the debt never seems to shrink.
Focus, focus, focus. With a strong reinforced why, you have the tailwind behind you to help achieve your goal. You have to want it. And want it bad. So bad you are willing to burn all bridges behind you and set forth with determination toward your goal. If you are merely interested in achieving your goal, it won’t be enough. You must turn your interest into a burning desire.
6 Steps to Turn Desire Into Riches
- Figure out the exact amount of money you desire. Saying you want to be rich or debt-free isn’t enough. Round numbers, like making $100,000 a year or being worth $1 million, don’t activate the brain to become a heat-seeking missile. Calculate the exact amount you need to achieve your goal. The mind can only focus on specific goals.
- Decide what you are willing to do in return for the money you desire (your answer to No. 1). A crane isn’t going to swoop down and drop a bag of money on your front lawn for thinking about earning money; you must put in the work, and probably a lot of it, in an area where people are willing to pay for your services.
- Establish a definite date as to when the money will be attained. Again, be specific. And be realistic. You might want to earn $1 million this year, but it will be hard to develop faith in your plan if you don’t have any money in the bank. Shoot for the moon, but stay pragmatic with your timeline.
- Create a plan on how you will accumulate the money — and begin at once. Action on an imperfect plan is better than no action on a perfect plan.
- Write out a clear statement of the money you desire, your plan to accumulate it, and the date you will be in possession of the money. Describe these in thorough detail in a short couple of paragraphs.
- Read your written statement aloud twice daily: once in the morning, and once in the evening before bed.
So the idea is this: You have a bunch of financial goals. Write them down and then prioritize them. Pick your most important goal and make it your major definite purpose.
Understand there is effort you must put forth to achieve the goal, as there’s no such thing as something for nothing. Just as when setting smart goals, your desire must have a specific deadline.
The real key to executing the above is No. 6. The first five can all be done in a day or two, but the discipline to read your written statement twice daily, with emotion and belief, is where most people falter. The purpose of this is to develop a burning desire and faith so strong that you will achieve your goal, that you will become unstoppable and squash temporary setbacks you encounter along the way.
So how can you strengthen your desire and faith? I’ve experimented with putting up note cards around the house and taping my written statement to the bathroom mirror to strengthen my faith; the latter proved to be more effective for me. And simply reading the written statement aloud isn’t enough. It must be read with passion and emotion. Visualizing your major definite purpose for five minutes a day will also activate your subconscious mind and strengthen your belief.
These steps may seem silly. Admittedly, they did for me at first, as my brain resisted the falsities in my written statement because what I was reading certainly wasn’t true (yet). Slowly but surely the habit of reading my statement aloud strengthened my belief in the outcome and wore down the inner resistance.
After a couple months of this routine, I was firmly convinced I would achieve my first financial goal… and 10 months later, I did (it was a 12-month goal to earn more than $100,000 in my first all-commission job many years ago).
And you can do it, too.
Breakthroughs in neuroscience in the last 10 years provide scientific evidence to support what Hill uncovered nearly a century ago. He didn’t know why it worked, just that it worked. Today we have empirical evidence to support how learning to control our subconscious mind and thoughts, through affirmation and visualization, can positively or negatively affect our actions.
There is nothing right or wrong that belief plus burning desire cannot make real, and these qualities are free to everyone.
This point is so important, I want to be quite clear. Thinking thoughts and lying on your couch and doing nothing Big Lebowski-style will not produce riches. The purpose of learning to control your thoughts is to create a burning desire and faith that will motivate you to take the necessary actions to reach your goal.
Belief in yourself and your goal must be so strong that you can already see yourself in possession of the money you desire. So you’re $25,000 in debt; how can you develop the faith to believe you will be out of debt and spending your Friday afternoons with your daughter instead of watching the clock at work?
Faith (the Second Step to Riches)
Faith is a state of mind one must attain in order to develop riches.
Be aware of your self-talk, as psychologists today suggest that as much of 90% of self-talk is negative. What are your thoughts about money? Investing? Being rich? Your ability to pay off your debt? If your current beliefs do not align with your desired outcomes, than you must learn to change your beliefs.
As Hill wrote in “Think and Grow Rich”: “All thoughts which have been emotionalized (given feeling) and mixed with faith begin to immediately translate themselves into their physical equivalent.”
The subconscious mind will interpret any message you send to it, whether real or fake, positive or negative. Your job therefore is to frequently and consistently send your subconscious mind the necessary signals to strengthen your faith in your desired outcome.
To strengthen faith, use the power of autosuggestion (the Third Step to Riches) or what we would today call affirmations. Autosuggestion is sending your subconscious mind messages, phrases and mantras that support your major definite purpose.
One example might be: “I am paying off my $25,000 in credit card debt, so I can spend more time with my daughter.” And then repeating this message many times throughout the day.
Devoting time each day to become the person you mentally need to be to achieve your goal is extremely important. Just a few minutes a day of positive self-talk and affirmation, and over time you will begin to develop the mindset needed to reach your financial goal. It doesn’t happen overnight, though, so stay the course.
A note of caution: Belief works in both directions. Pessimism and focusing on how much you don’t have will work against you. So just as saying, “I am capable of paying off my $25,000 in debt by Dec. 31, 2015,” and repeating the mantra daily will strengthen your belief, faith, and desire, mental ruts and bouts of “this will never work, this is a gimmick” will defeat your purpose.
As Henry Ford once said, “Whether you think you can or cannot, you are right.”
These are but three of Hill’s steps to riches, but by far the most important three. Whatever your financial desires and goals, you can achieve them if what you desire does not violate laws of nature or laws of humanity.
Best of luck to you, believe in yourself, you can do it!
Joe Sweeney is a social entrepreneur, committed to helping individuals and organizations grow and solve problems. Most recently, he was the co-founder and CEO at 100state, a nonprofit, startup community of entrepreneurs, educators, and innovators in Madison, Wis. Joe was recently named one of 53 entrepreneurs onMadison Magazine’s ‘M List: The New Who’s Who’ for his work with 100state.