What You're Doing Wrong: 3 Ways The Rich Think Differently From The Rat Racers
Have you ever seen a commercial for a Lamborghini, Ferrari or other exotic car? Probably not. That's because the people who can afford them don’t sit around watching TV all day, and it would be senseless to issue TV ads without hitting the target demographic.
Chances are, though, that you see ads all the time for more affordable luxury cars. We all know someone who owns one. The problem is, the only place we see them driving it is in traffic.
Hell, they probably have an awesome house, too, but the only thing they do in it is fall asleep in front of the TV.
In conversation, these folks assure us this is the only way to survive nowadays. They refer to this lifestyle as just "growing up" or "how life is." What’s the reason for this phenomenon? Is this truly the only way to get by?
Not if you start thinking like the rich.
Stop Trading Time For Money
When you work a regular job, your productivity isn't tied to your value, it's tied to time. This is the first and most important distinction between rat racers and the rich.
Smart paper chasers know the more variables in their control, the greater chance of a successful outcome. By taking part in a time or money tradeoff, rat racers leave far too much to chance.
Here's the justification: Sure, you’ll be doing soul-sucking work for a few decades, but so what? Once you retire, you’ll be worth a cool $1 to $2 million and you can do whatever you want.
But who's to say what will happen between then and now? What if you get laid off? Or your employer goes out of business? How about a heart attack or stroke? What if you just don't like the idea of being rich when you're old, grey and wheelchair-bound?
As a rat racer, you only have one choice should you want to earn more: work more. Instead of the usual eight-hour day, you could do overtime. But this may lead to a lifestyle that includes lots of money and no time to enjoy it.
Worst part is, you could be 100 percent more productive today compared to yesterday, but your pay won’t change.
Stop Consuming and Start Producing
The rich know that when you become a producer, there's no end to the ways you can fatten your pockets: lower production costs, increase pricing, beef up advertising, optimize marketing and so much more. In fact, depending upon the customer you cater to, there could be an unlimited income potential.
Imagine working in a local sunglass shop for an hourly wage; you could only make so much money in a day. The same would be true if you were the salaried manager. Even as the store owner you’d be limited to so many sales during business owners.
But if you connect with a manufacturer and start selling your own shades, you’ll have no cash cap. You could sell online directly to millions of potential sunglass lovers, pitch to big brand name stores or sell to a dozen of those same local shops.
You could produce different kinds of sunglasses, cleaners, cases and more as added value. Best part is, as your distribution grows, you could go from generating 100 percent to 10,000 percent in the same 24 hours with the same time investment.
So much for overtime.
Get Real About Spending
Since time is money to rat racers, most become prisoners to their spending. Think about it like this: When you buy a shirt off the sale rack or a candy bar at the checkout line, do you have to rationalize it?
The same thing applies to everything else. Whether the purchase is big or small, if you need to justify it somehow, you probably can’t afford it. Heard of any coupon cutters driving exotics? How about jet-setting 20-somethings who travel the world courtesy of their all-star 401(k)? I’ll wait.
Smart shopping and budgeting is great, but saving that aggressively will get you nowhere fast. The key is to view debt as a tool to scale your production and distribution, not as a quick way to buy useless sh*t. Before you swipe, consider the importance of what you’re buying.
Leave a comment or send me a tweet if you have more questions about how to escape the rat race.
Photo Courtesy: 20th Century Fox/Wall Street: Money Never Sleeps