I often hear people say they want to win the lottery. The thinking is, if they have more money, that will be the solution to not having enough money. The problem is, that’s not true. Not exactly.
Think of it this way. If you don’t have enough water and so you go out and buy 100 gallons of water, that will last you for a while, maybe even a few years, but it will run out someday. The way to have enough water permanently is to have a source of water that continuously gives water to you, like a well.
In the same way, you need investments that will continuously provide money for you.
People who win the lottery, or receive any windfall or inheritance, have generally gone through all of the money within 5 years. Some lottery winners even end up worse off (as do professional athletes who make a lot of money for a few years), and even declare bankruptcy after having millions and millions of dollars in their possession.
The problem is, they only thought of money as something to spend and they didn’t think of how to invest it properly.
How can this help you today? Here are a few things you can do:
1. Prepare to receive more money now. If you have the expectations that money is always coming to you, you’re preparing your mindset that wealth is always flowing to you. It’s not a “temporary” occurrence.
2. Start working on creating a wealthier mindset. Use affirmations and change your actual thoughts about money from something negative to positive.
3. Become a “steward” of money. Get used to the idea you are stewarding money, not just spending it. Stewarding money means making long-term plans for it to last, choosing investments that will keep it flowing (like getting a water well that keeps on giving), and thinking about how to keep it over your lifetime and for generations beyond.
Hint: If that doesn’t seem possible to you, then you have a lack mindset.
4. Even before you have enough money, you should be learning about how to invest it. I hear all the time, “When I have more money, then I’ll learn to invest.” Actually, that’s backwards. When you learn to invest, you’ll have more money. Start focusing on what you would do with more money now, not later.
5. Understand money should be used in a balanced way – some to spend, some to save/invest. You have to do both, no matter how little money you have. Even a small amount of savings psychologically can do wonders because you are acting like you have “enough” and are not spending all you have or more than you have.
Otherwise, you’re just seeing money as something to spend. As long as that’s your view, you’ll never have enough – no matter how much you have. Really.
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Your point #4 is a good one. Many people don’t invest the time needed to become financially literate and thus neglect their financial well-being.
Learning about managing money, types of investments, how to invest, etc as well as understanding the risks and rewards is critical to building wealth and will also spark motivation as people learn of the opportunities and want to take advantage of them.