Raise Your Standards, Increase Your Wealth

MichaelBeliefs, Education, How to, Misc39 Comments

Increase Standards

man-310986_1280It may sound like a simple statement, but it’s true!

Raise your standards, increase your wealth.

Finding financial freedom really comes down to 80% psychology and 20% mechanics.  So, guess where you should focus your efforts?

By raising your standards, you immediately begin to impact the quality of your thoughts (psychology).  In fact, if you only concentrated on becoming financially alert, you will find yourself naturally adjusting your mechanics automatically.

Here are a few ways you can raise your standards:

1. Adjust Your Peer Group

No, I’m not talking about ditching your friends and family. 🙂 But, I am suggesting you find and keep people in your life that are already getting the results you want.  If you don’t, it’s quite easy to slip back into the comfort of your surroundings.  If you want to grow with anything, you’ll need to keep an open mind.  Negative beliefs around money are the number one reason people never even get started.  Look for others who can challenge you.

Not sure where to start?  You can always find a mastermind, investment clubs, service organizations, online communities, etc.  Find new friends that share similar values and financial goals.  Over time you will build a natural support system and brain trust to bounce ideas off.  Also remember to interact with people in different financial positions.  Engage with those who have more, and teach those who do not have as much.

2. Find A Mentor

Don’t be afraid to talk with someone who already has accumulated wealth.  Wealthy people come in all shapes, sizes, and flavors.  Despite what the media may portray, you are equally likely to meet a millionaire who is an a$$hole as you are to meet a millionaire with a heart of gold.  In fact, I’d be willing to bet that more millionaires (because they have abundance) are more inclined to help than someone who has less.

Of course, a mentor isn’t typically sitting there with free handouts for just anyone.  They want to find those hungry enough to do the hard work in order to get the results (as a coach, these are the same qualities I’m looking for in my students).  A mentor will help you to raise your standards and provide you a perspective that can help cut through your limiting beliefs.  If you’re interested in how to find a money mentor, check out my previous post – How to Find a Money Mentor.

3. Read More

Here’s a simple, but often overlooked activity to do.  Raise your standards by reading MORE.  Books give you access to the greatest minds of all time and you can reap huge advantages by learning their perspectives and beliefs.  Here are a few of my favorite personal finance books:

Rich Dad Poor Dad – Robert Kiyosaki – An excellent book for those just starting their journey towards financial freedom.

Cashflow Quadrant – Robert Kiyosaki – Great overview of basic cash flow and investor types.

MONEY Master the Game: 7 Simple Steps to Financial Freedom – Tony Robbins – In depth look at asset allocation, hidden fees, and shaping your beliefs for action.

The Millionaire Real Estate Investor – Gary Keller – Awesome overview, detailed guide, and motivational book on why and how real estate is one of the best wealth building vehicles ever!

Think and Grow Rich – Napoleon Hill – Classic words that still resonate as true today as ever.

4. Pay Yourself First

If you’re not doing this already, STOP and do it now. I don’t care if you work at McDonald’s and make minimum wage, the mere act of “paying yourself first” will help you to build a crucial habit required to build long-lasting wealth.  I’ve found the easiest way to do this it through savings automation.

Check with your bank to see if they have any active programs available, or use a bank like CapitalOne 360 to set up a savings account that will automatically deduct from your main checking account.  I would suggest starting at 10% of your income (or as much as you can do), and gradually increase it as your income rises.  Future increases could be allocated to 401K contributions, Roth IRAs, etc.

You will be surprised.  Most people find out they can actually live off much less than they thought – especially when they don’t see the money coming into their account.  Out of sight, out of mind! 🙂

5. Give First

Here’s another paradox to digest.  Give first.  It may seem a bit counter-intuitive at initially when you’re trying to build your wealth, but giving from your heart has immense positive side effects.

The simple act of giving automatically re-calibrates your brain.  You quickly realize that there is abundance that you never knew existed.  Having a belief in abundance then allows you to attract and act in a manner that attracts wealth.

Giving also allows you to have gratitude for what you already have.  I’ve said it before, and I’ll say it many times more.  Being rich is a mindset, not a dollar amount.  Gratitude is the ultimate gauge of real riches.

This strategy has worked wonders in my own life and the abundance you receive goes way beyond money.

 

 

Readers, what other ways could you raise your standards to be more, do more, have more, and share more?

Michael
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Michael

Hi, I have been blessed to take an early retirement in my mid-30's so I can focus on becoming a better father, blogger, and investor.

My goal is to help you find your personal path to financial freedom, and to enjoy the entire journey.

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Michael
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39 Comments on “Raise Your Standards, Increase Your Wealth”

  1. Thias @It Pays Dividends

    I like the idea of creating an income stream that is directly tied to something you want to do. Example – If you want to travel more, create a side hustle with the direct focus of using that money for travel. If you want to travel bad enough, you will put in that much more time in being successful in your side hustle. Great list Michael!

    1. Michael

      That’s a great idea Thias. I think a lot of people would be motivated to see an explicit positive effect from their saving strategies. This would naturally raise their standards if they want to hit that goal badly enough. I assume to take it one step further, you would tie a “travel” bucket together with a “savings” bucket to ensure the “savings” bucket gets some love simultaneously?

  2. Financial Samurai

    You ever find yourself chilling at the finance section at Barnes & Nobles thumbing through all their books? I remember doing that every week for YEARS when B&N was still around. Unfortunate they are no longer present.

    I like to just read blog posts like this one now 🙂

    Sam

    1. Michael

      Thanks for reading Sam!

      Oh man, I miss those days. I’d kill hours and hours in a B&N store. I could never quite figure out how they made money with that model. And now we know… they didn’t! 😉

      And, YES – reading good blogs is the new way to browse.

  3. The Yachtless

    I second the “adjust your peer group” suggestion. I suspect that one of the (many) reasons I was not so great with money when I was in my 20s is that my friends at that time were not good with money. I had one friend who would often say things like “Yeah, I have $4 in my bank account until I get paid on Friday” as if it was no big deal, and several friends who were in huge amounts of debt and planning to take out more. Not to criticize these people at all — and they were great friends to me — but I can definitely see that there was some amount of influence there.

    1. Michael

      Thanks for sharing Sarah. Yeah, it can be hard when it comes to friends. After all we’re all looking for acceptance and connection from them. I think you nailed it… it’s pretty common for young 20 somethings to keep each other in similar financial positions without trying to. Congrats on raising your standards!! 🙂

  4. our next life

    We are huge fans of paying ourselves first (that is probably the single biggest secret to our success), and to choosing a peer group whose values and habits align with where you’re trying to be. For us, moving away from the status-focused city, to a mountains where no one cares a lick what we do or earn, has been a super positive change. Surrounding ourselves with friends who aren’t focused on money has made it much, much easier to save!

    1. Michael

      ONL, thanks for sharing and being a great model of success! Your mountain life sounds awesome. 🙂

      How early into your careers did you start paying yourself first?

      1. our next life

        Not as early as we wish! But we were both pretty good about doing the 401(k) early, and I did $100 a month autoinvestments into some silly mutual fund in my early 20s. Not that that put us where we are, but it was a start in terms of the pay yourself first mentality! 🙂

  5. Charlie

    Yes surrounding yourself with like-minded people, or people who are a step ahead of you definitely helps. Since I started writing my blog and reading other personal finance sites like yours, I found myself paying more attention to my own finances (financially alert! LOL) – I look at my spending and income more carefully and frequently, spend more time thinking about retirement plans and ways to invest. I am glad to see all those positive changes in mu life.

  6. ambertreeleaves

    Some good points. I am already occupied with 3 and 4. Point 5, I mainly donate time to the local school community. Maybe I should start to read the books that pile up next to my bed.
    Point 1 and 2 never crossed my mind. I can see the power of them.
    In a certain way, reading blogs and posting is a way to be surrounded virtually by like minded people.

    1. Michael

      ATL, yes reading certain PF blogs can certainly raise your standards. But make sure you find the quality ones. I’d even suggest you find some that cover topics that are completely foreign to you. Immerse yourself and your curiosity will build knowledge automagically!

  7. Brian - Rental Mindset

    Back in high school that didn’t seem important at the time: 1 semester of Econ. In fact, several years later it still didn’t seem important! I remember learning to pay yourself first and read Rich Dad Poor Dad. Without being aware of it at the time, it has really shaped how I think about money. I’m thankful I had a teacher that taught useful stuff rather than just sticking to the typical econ supply curves and discounted cash flows.

    I haven’t quite embraced #5 yet – my giving is <1% as a 30 year-old. I think I would like to keep it fairly low for the next 2 decades and concentrate my giving towards the 2nd half of my life (Bill Gates style, letting some wealth accumulate to have a bigger impact). But I could do better now and set an amount. Something like 3% of income would be substantial for me.

    1. Michael

      Yeah, I really wish our school system spent more time and effort to educate students on personal finance. Rich Dad, Poor Dad (whether or not true) is a fantastic gateway to realizing there are more choices to be had with our money.

      I’ll admit, I wasn’t always a giver, but it has changed my life now that I do. Alternatives to giving money could be volunteering, teaching, or mentoring. 🙂

      1. Brian - Rental Mindset

        I wish the RDPD author was more reputable and just came out and say it was a parable. That would let more people rally behind it.

        The volunteering, teaching, and mentoring we definitely have covered – my day job is mentoring kids learning to code (Breakout Mentors), I also co-founded a huge free club for kids to code (CoderDojo Silicon Valley), and my fiance is a 4th grade teacher! But the monetary giving is a work in progress…

  8. Vic @ Dad is Cheap

    I’m with you Michael in finding a different peer group. A lot of my friends and family don’t care about money, so it can be challenging going out because my wife and I are pretty frugal. We’d like to be around more people that really value their money like we do.

    Paying yourself first is a must! It’s the only way to get ahead.

    1. Michael

      Yeah, it can certainly be a challenge at times with friends and family. Finding a different peer group that challenges you will allow you to grow. The nice thing though, is when you return to your original circle (and you bring enough enthusiasm to the table), you can raise up your peer group’s stardards across the board. I suspect some of those around you have already absorbed some of your good money values by simple association with you, Vic!

  9. Fehmeen

    I like your idea of adjusting your peer group to avoid slipping into the comfort of your surroundings. I wasn’t very ambitious (not after I moved into my 20s) but reading about other people’s success stories has given me a lot of impetus to set high goals and achieve them.

    1. Michael

      Fehmeen, it’s great to relate to other people’s success stories. After awhile you begin to see that they are no different than you and I. You realize that you can achieve the same results with the same focus and action. Comfort is good for awhile, but the meat of life comes from growth. Stick with your high goals and life will always be an adventure. 🙂

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  11. Nadine Perry

    Thanks for bringing back those fond memories. My tribe and I could be found in Borders for a weekly visit. Last year I donated hundreds of books to save myself “dusting” time and am now trolling blogs like this too.

    @Michael – thanks for the read!

    1. Michael

      Thanks for visiting Nadine! Maybe someday virtual reality will allow us to get back to perusing more like our old Border’s days. 🙂

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  14. MedSchool Financial

    Hey Michael, enjoyed the post, another way I like to raise standards is pushing your boundaries and stepping out of your comfort zone on a regular basis by saying yes to volunteering for a good cause, taking on a new project, and networking. This moves you in the right direction by opening you to new people, experiences and opportunities.

    1. Michael

      Excellent one! Pushing your boundaries is the only way to grow and maximize your true potential. We all have so much we’re capable of it’s truly mind blowing.

      One of my favorite questions is, “what would you do if you knew you couldn’t fail?”

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  16. Review

    Hey Michael, enjoyed the post. I like how you put “Adjust Your Peer Group First.” Do you think this is the most important thing to change to change to raise your standards?

  17. Michael

    Great list. I can definitely see adjusting your peer group as a worthwhile thing. I remember when I first I first got serious about personal finance. The internet made it so easy to get pulled in different directions because of how many voices are out there. I found value in filtering down over time to those I found trustworthy, and sticking with them.

    1. Michael

      Thanks for stopping by Mike! Yeah it is pretty great that you can build and customize a peer group virtually these days across different states and even countries. Like you said though, you need to filter through a lot of noise. It’s well worth it though!

  18. Kevin

    I like that last part “Being rich is a mindset, not a dollar amount.” I’ve been thinking about writing a post about giving and why I give beyond my own personal convictions. This really helped crystallize this idea in my mind.

  19. Xyz from Financial Path

    I was hanging out with the wrong peers a few years back.. zero savings, expensive bottles and cocktails, living like there’s no tomorrow. Then I met my S.O. and found FI and I’m now on my way to early retirement in less than 10 years! Peers can be a super big help in your life! (or detriment) Thanks for the post.

    1. Michael

      I love that real life example, Boriz! Peer groups are so influential all throughout life. Thanks for sharing. Keep up your great momentum. See you on the other side in 10 years. 😉

  20. Matt Spillar

    This is a great post Michael, I loved the line “Negative beliefs around money are the number one reason people never even get started.” It’s shocking to me how many people think that living paycheck to paycheck their whole life has already been determined for them. SO much of personal finance is having a positive and optimistic mindset and desiring better for yourself. Thanks for the reminder!

    1. Michael

      Glad you enjoyed the post, Matt! Yeah, it’s unfortunate that our culture romanticizes a “spend now, pay later” culture. If people could just delay a little instant gratification, they could easily turn that discipline into a lifetime of gratification and not worry about living paycheck to paycheck.

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