How the rich use fear to make them richer
If you’ve read my posts for a time, you know the importance of financial education. It’s only through increasing your financial intelligence through financial education that you will be able to become rich. That being said, it isn’t an easy path. Financial education is hard work, especially in a culture that doesn’t understand or value it.
When it comes to increasing your financial intelligence, you’ll inevitably come up against obstacles that will push you to either bear down and fight through or give up. How you respond to those obstacles will set the course for whether you live a rich life or a poor one.
In my studies, I’ve determined five obstacles that the average person will face on his or her path to financial freedom. Over the next few weeks, I’ll write a post on each one.
- Acknowledge fear is real
Fear is real. Everyone has it. And everyone has fear of losing money, even the rich. But it’s not having fear that is a problem. It’s how you handle your fear. No one likes losing, but often the dividing line between champions and perennial losers is how they handle failure when it does happen. Similarly, the primary difference between a rich person and a poor person is how they manage their fear.
In all my years, I’ve never met a rich person that hasn’t lost money. But I’ve met a lot of poor people who have never lost a dime—investing that is. My poor dad was like this. He feared losing money, but rather than face his fear, he ignored it. He did nothing. He simply avoided the issue, refusing to discuss the subject. Playing it safe helped him not lose money, but he never got rich either.
My rich dad, on the other hand, told me that if I wanted to be rich, I had to first acknowledge my fear and then overcome it. He said the best way to do that was to think like a Texan.
- Think like a Texan
“I like Texans,” my rich dad said. “In Texas, everything is bigger. When Texans win, they win big. And when they lose, it’s spectacular.”<
“Texans like losing?” I asked.
“That’s not what I’m saying,” said rich dad. “Nobody likes losing. Show me a happy loser, and I’ll show you a loser in life. Rather, I’m talking about the Texan’s attitude toward risk, reward and failure. They live big. They’re proud when they win, and they brag when they lose. They have a saying, ‘If you’re going to go broke, go big.'”
Rich dad used the Alamo as an example of this Texan attitude. The Alamo is a story of brave people who chose to fight, even when there wasn’t any hope of winning. They chose to die instead of surrendering…and they got their butts kicked. But, how did Texans handle this? They said, “Remember the Alamo!” They took a loss and made it a win.
“The Texans took a failure and turned it into inspiration…and a tourist destination that makes millions,” said rich dad.
- Learn from failure
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“The formula for all winners,” said rich dad, “is that failure inspires them to become winners because they learn from their failures.”
Nobody does anything great without failing. Championship bikers had to first learn how to ride a bike, and they fell off their bikes in the process. Each time they were faced with the decision to either quit or get back on. The same is true for pro golfers. I’m sure they’ve lost many golf balls over the years. The difference between winners and losers is whether they look at failure as an opportunity to learn and grow, or as an opportunity to quit.
For winners, losing inspires them. For loses, losing defeats them.
- Play to win
Former NFL quarterback, Fran Tarkenton, said, “Winning means being unafraid to lose.” People like Tarkenton are not afraid of losing because they know who they are. But just because they’re not afraid to lose, doesn’t mean they like losing. There is a difference between hating to lose and being afraid to lose.
People who are afraid to lose never take the field, and when they do, they play not to lose rather than to win. Unfortunately, they rarely win.
People who hate losing take the field and play to win. When they do lose, they use it as inspiration to get better. It’s that attitude that makes them champions.
If you want to be rich, stop playing not to lose and start playing to win.
- Be focused
The conventional financial wisdom is to build a balanced portfolio of stocks, bonds and mutual funds. That is a safe and sensible portfolio. It’s a portfolio of someone playing not to lose rather than playing to win. And it’s a portfolio that won’t get you rich.
The rich don’t play it safe with balanced portfolios. Rather, the rich are focused. Balanced people go nowhere. They stay in one spot. To make progress, you must be unbalanced and focused.
Thomas Edison wasn’t balanced. He was focused. Bill Gates wasn’t balanced. He was focused. Steve Jobs wasn’t balanced. He was focused. If you have any desire to be rich, you must be focused. Do not do what the poor and middle-class do: put their few eggs in many baskets. Put a lot of your eggs in a few baskets and focus. Follow One Course Until Successful. Overcome your fear and don’t play it safe.
How are you going to face your fears today?
Written by: Robert Kiyosaki