The Appearance Of Wealth
To the struggling middle-class, wealth is something of a mythical state of mind. The wealthy understand that wealth creation is more than that—it is a balance sheet, a budget, a solid means of financing their end goal of financial freedom and living well. Knowing the difference and living the life are two separate issues that severely impact the end goal of wealth creation.
Before I get too far ahead here, I have to say that wealth creation does rely on achieving the wealthy state of mind. But you have to know what that means. The mindset of the wealthy is one of success and maintaining that success. It’s one of determination and motivation. But it is not one of spending blindly to appear wealthy; the mindset of the wealthy is to really be wealthy!
Looking Rich is different to being rich
The middle class mistakenly think that being rich means looking rich. Having things that will make people think you are rich—the big house, the luxury car, the second home, the designer clothes.
In their rush to appear wealthy, the middle class take on fast and easy lines of credit, buy and buy so that they can put on a good show of wealth for the neighbors, and drown in their unmanageable debt. This puts the middle class into a never-ending cycle of working and paying and working more to pay for more. But it does nothing to really save or build wealth.
The wealthy, on the other hand, do things in reverse
They understand that the key to their wealthy existence is cash in hand (used to back reasonable amounts of beneficial and manageable debt). The wealthy wait to make their purchases until they know they have the financial backing to do so. In so doing, they create a stream of wealth first by putting their seed money to work for them to make more money, and spending off the money created by that seed money.
This is an essential difference between the wealthy and middle-class. It is the difference that dictates success in wealth creation. Understanding the difference between appearing wealthy and actually being wealthy is what will determine the success you have with wealth creation.
Sean Rasmussen
Wealth Creation Blog
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Tags: Building Wealth, Financial Freedom, Make Money, Mindset, Money, Motivation, Success, Wealth