What do you work for? It's for money! But sometimes the harder we work, the less money we have. Here's why the harder you work, the poorer you become. I hope I can help you.
01 thinking root of poverty: scarcity mentality
The first dilemma faced by the poor is the thinking of the poor.
American economist Murray Nathan and psychologist Shafir found that the reason why the poor are getting poorer and poorer is not that they don't work hard enough. The culprit is the scarcity mentality. The more money they are short of, the more they care about money, but ignore the more important things.
The scarcity of money has captured the poor's brain and blocked the poor's cognitive ability.
"People's vision will become narrow due to scarcity mentality, forming a pipe view, that is, they can only see a small number of objects through the holes of the 'pipe' and ignore everything outside the pipe," mulanathan said
There is a very prosperous vegetable market in kayambidu in India. The vendors there borrow 1000 rupees from the rich to purchase goods every day. After buying vegetables, they recover 1100 rupees and return 1050 rupees to the rich. They earn only 50 rupees.
In fact, these vendors only need to save 5 rupees a day. Relying on the compound interest effect, they can not borrow money from the rich in only 50 days, and then their income will rise significantly.
Wealth is within reach, but all vendors insist on borrowing money from the rich and paying interest of 50 rupees to the rich every day. Nine years later, the rich are getting richer without work, while the poor are getting poorer with hard work.
"The poor who have been in a state of scarcity for a long time will consume a lot of bandwidth by the scarcity mentality, and their judgment and cognitive ability will be greatly reduced due to paying too much attention to immediate problems, without excess bandwidth to consider investment and long-term development," mulanathan said
Scarcity mentality will lead to serious shortsightedness, making people only see the immediate interests, leading to finding a job that is only "profitable".
Working overtime, lack of long-term career planning and effective self-improvement, let alone managing expenditure and making effective asset investment.
02 the realistic root of poverty: "rat race trap"
There is a question with millions of Views: why do many "small local tyrants" claim that money depends on earning rather than saving, while Buffett and Munger still advocate frugal life?
Although some answers were praised a lot, they didn't get to the point.
Robert Kiyosaki, author of "rich dad, poor dad," a financial bestseller that has sold 29 million copies around the world.
Those who say that money depends on earning rather than saving are "stupid people spend silly money". The rich get rich first and then spend money for pleasure, while the poor start spending money for pleasure before they get rich.
Kiyosaki told the story of "rat race trap": the mouse ran on the wheel, but he didn't know that the faster it ran, the faster the wheel turned. Finally, the mouse was exhausted and had to stop.
A large part of the reason why it is impossible for the poor to realize wealth freedom is that they fall into the "race trap" of mice.
The older people are, the higher their income is, but they also have greater desire, face more and more complex problems, bear more and more family responsibilities and spend more and more money.
The growth of income has a clear ceiling, but the growth of expenditure has not.
Like my reader Xiao Gao, he is a senior sales manager of a clothing enterprise in Beijing.
The annual basic salary is about 12W, plus the sales commission of about 5W. Although he can't enter the high-income group in Beijing, he should save some money after working for six years, but in fact he owes a lot of debt.
His monthly expenses are as follows: renting a house (2500 yuan), falling in love (2000 yuan), clothing, food and entertainment (4000 yuan), living expenses for his parents in his hometown (500 yuan), and part of the living expenses for his sister's College (1000 yuan).
In addition to a lot of hard expenses above, his piecemeal expenses are also very huge.
For example, I once reminded him to check Didi's itinerary. He was surprised to find that the taxi fare in the first half of this year alone cost nearly 4000 yuan, equivalent to 5% of the total income in the first half of this year.
Once the expenses are offset, there is little money left.
People like Xiao Gao are not uncommon. Although the salary is not low, they still don't have much savings after working for several years.
The primary problem of poverty is not too little income, but too much expenditure.
Ray Kroger, founder of McDonald's, is choosing a location for the branch
So how do the rich break the limitations of thinking and reality?
In fact, if you want to break the chain of thinking and reality around the poor, it is not difficult to become rich.
Learn to be a boss, invest in assets that can automatically generate money even if you don't do anything, and let assets form your financial moat.
In 1974, McDonald's founder Kroger gave a lecture in the MBA class of Texas State University.
Kroger smiled and asked, "what do you think I made a fortune?"
The students naturally say "sell hamburgers".
Kroger smiled again. "I knew you would say that, but I don't make hamburgers, I sell real estate."
Why did the founder of McDonald's become a real estate seller?
Kroger explained that McDonald's biggest revenue comes from franchisees renting McDonald's stores.
Because Kroger has always attached great importance to the geographical location of the store and would rather use most of the company's revenue to buy land, the rental price of each branch is very high and the profit is very rich.
McDonald's owns more real estate than the Pope. It has become the largest independent real estate developer in the world. The profit from renting land accounts for a large part of the company's income every year.
What really makes money for McDonald's is not the Hamburger after eating, but the land that can be used continuously.
This is the real thinking of the rich.
On the one hand, breaking the "scarcity mentality", Kroger took a long-term view and jumped out of the money itself to make long-term planning.
On the other hand, abandon the mentality of working and don't think about working hard to make money. Instead, use most of the money earned to buy high-quality assets and let the money make money by itself.
So, what should we ordinary people do?
Become the master of wealth, not a slave
To realize wealth and freedom, in the final analysis, is one sentence.
We should change the scarcity mentality, jump out of the money itself for long-term planning, and turn all our wealth into assets that can generate money.
What exactly should we do?
1) forcibly pull life planning into the pipeline vision
Feng Xin, the founder of storm video, once said that only when a person finds his position in the world can he really achieve something.
So how to find it and get to this position step by step?
This requires you to forcibly pull the problem of life planning into the pipeline vision and force yourself to plan your life in the long run.
Harvard University once did a very famous research. They found a group of young people whose birth environment and IQ were not much different.
Among them, 27% have no life planning, 60% have very vague life planning, 10% have short-term planning and only 3% have long-term planning.
After 25 years, those who have long-term plans have almost become the top people in society;
Those with short-term planning have become the middle class, such as doctors and lawyers. Those with fuzzy planning live in the middle and lower classes of society;
Not promising, but I especially hope my children will be promising;
Those who have no plan at all have become the bottom of society and complain all day.
Therefore, we must force ourselves to think about long-term planning, put the time scale at more than 20 years, and think about what our life vision and mission should be and how to realize it.
2) investing in money generating assets: building a financial moat
Anything that can make a profit without your labor can be regarded as an asset.
For example, a restaurant that you can run by hiring someone can make a profit without you going to the scene.
Or if you write a best-selling song, everyone needs to pay you the copyright fee when they sing it once in KTV.
Or securities, funds and so on
Only when all your wealth is automatically producing wealth for you can you have real financial freedom.
3) cultivate the mentality of the boss: find the best talents to work for you
A man who can only fight alone cannot become a famous general, and a man who can only work hard alone cannot become a rich man.
Really smart people need to attract better talents to work together.
For example, a designer friend of mine in Shanghai set up a temporary studio and recruited a group of freelance designers to work for him. He only drew 15% of the agency fee from each order.
While doing the design, he can divide the work he can't do to others, which not only reduces the burden, but also expands the business volume, maintains a good reputation in the industry, and the number of customer orders continues to increase.
In a year, his income has quadrupled that when he was only a designer.
4) delayed satisfaction: reduce expenditure
The rich do not enjoy themselves, but enjoy themselves in the end.
The poor are different. The poor enjoy themselves at the beginning, so the accumulation rate of the poor's original capital is greatly reduced.
Therefore, the poor must delay their satisfaction. Don't want to buy everything. You should know that many things you buy are not necessary.
Here's a rule to remember: don't buy anything you hesitate to buy.