Rich man, poor man

HAVE you ever wondered why so many people are challenged financially, even though they desire to be financially independent?

Or have you ever wondered why the few rich frequently get richer and the many poor more often get poorer?

Even though the overall living standards have markedly increased over the last two centuries, there certainly still exists a wide inequality when it comes to wealth distribution.

It has been claimed by some authorities that only 1% of the world’s population ever reaches the status that can be truly considered financially independent, but why so few?

Let’s explore some interesting behaviours that lead to such polarised results when it comes to money and its management:

As I have travelled the world and participated in the education process of millions of people, I have frequently asked my more general public audiences: “How many of you would love to become financially independent?”

Without fail 99.99% of the attendees quickly put their hands up, begin to smile and even laugh and collectively say: “I do, I do, I do….” It sounds like the answer to the ultimate question in a marriage ceremony.

But their laughter often indicates their internal tragedies and struggles associated with their management of money.

It has been known for centuries: tragedies often underlie comedies.

I then ask: “So who among you are either on your way to being or are already presently financially independent?” Of course, the majority of the hands immediately go down.

I then ask: “Which of you is ready to transform your financial destiny and become a part of the 1% club?”

They generally point to themselves and assume that those around them are the misfortunate ones. Their response is predictable and is an expression of their unrealistic expectation or fantasy.

Of course, when I present these questions to more financially savvy and adept audiences the response is quite different.

In this group, not everyone rushes to put their hand up and assume they are obviously the ones destined for financial freedom.

There are distinct personalities of the wealthy-minded who are heading for financial freedom, versus those who live in a fantasy about their future misfortunes.

So let’s look at some of the distinctions I have noticed between those who are more and those who are less likely to become financially independent:

Those who are more likely to become financially independent:

* They understand and appreciate the purpose of money and how it represents a rational means of exchanging fairly between two or more parties;
 
* They truly have a higher value or priority on serving ever greater numbers of people. They believe they are destined to serve vastly and be rewarded immensely, so they have their money working for them instead of them working for money;
 
* They are long-term visionaries that save and invest their company’s profits on building appreciable assets for personal and then, familial, social or charitable causes;
 
* They truly place value on studying the principles of wealth accumulation and management for the sake of their family, loved ones and society;
 
* They are working on their businesses more than just in their businesses and they are refining their actions to maximise their profit margins and minimise their redundant actions or unnecessary expenses;
 
* They prioritise their actions and delegate low priorities that cost them time and money and extract surplus value out of productive and competitively advantaged work teams - capitalistically;
 
* They leverage their money-making opportunities and embrace progressive levels of risks and rewards. More often, they become owners rather than renters. They often value themselves and pay themselves first.
 
* They are more masters of their destinies than victims of their histories.

Those who are less likely to become financially independent:

* They don’t understand, nor truly appreciate the purpose of money and often have illusions concerning money’s goodness or evilness and become trapped in moral dilemmas;

* They are immediate gratifiers that spend their funds on things that depreciate in value or liability, so they work for money instead of having their money work for them;

* They fantasise about how they will spend their imagined fortunes on progressively fancier lifestyles instead of strategising, structuring and managing money to make it grow;
 
* They don’t truly have a high value on serving ever greater numbers of people;
 
* They expect entitlements in their life - rather than empowering themselves and being dedicated to serving others;

* They put less, little or no value on studying the principles of wealth management and accumulation;
 
* They are working in other people’s businesses instead of running their own business;

* They are not refining their actions to maximise their profit margins and minimise their redundant actions or unnecessary expenses;

* They don’t prioritise their actions and delegate low priorities that are costing them time and money;
 
* They fear financial risks and leveraging and withdraw to the assumed security of safe earning redundancies;

* They often live as renters with short-term and cloudy visions;
 
* They often devalue themselves and pay themselves last;
 
* They are more victims of their histories instead of masters of their destinies.

When I have asked those who feel financially strapped what they would do if they suddenly had a substantial sum of money, their answer is usually that they would enjoy spending their money on depreciable items.

The answer is rarely how they would make their newly acquired money grow by saving and investing. People who are unlikely to be wealthy are spenders - not savers.

But when I asked those who feel more financially free what they would do if they all of a sudden came into such a sum, their answer has been invariably how they would assure that their financial principle would be preserved.

They would grow their wealth and spend only a portion of it so as not to erode the principal, so it could continue to grow and build towards a desired cause into the future.

The wealthy and the poor have different hierarchies of values and mindsets:

The wealthy value and understand money more. They see, create and attract ever greater opportunities to grow their fortunes.

Those who manage money wisely, receive more money to manage and those that manage it poorly, receive less.

Money automatically circulates through the social economy from those who value it least to those who truly value it most.

Ultimately, the rich get richer and the poor get poorer. But nature has its inherent and compensatory ways of equilibrating the economic game. It levels the playing field over time.

As the wealthy become really wealthy, there emerges from within them a desire to contribute back – an urge for philanthropy.

Meanwhile, the poor develop a greater feeling of entitlement and rely on welfare and charitable contributions to survive.

Ultimately nature recycles the wealth through time to give everyone the opportunity to master the art of wealth building, which is truly a set of values game and a state of mind.

Each individual must make the decision of where they want to play in the game of life – socioeconomically at the top, the middle or bottom.

The former and the latter are actually complementary opposites to maintain a dynamic equilibrium – the laws of nature.

We have a choice on where and when we want to place ourselves in this magnificent financial game.

* This guest post is by Dr John Demartini, a world renowned human behavioural specialist and expert in leadership development.

- Fin24

* Add your voice to our Women's Wealth Issue and help empower others this Women's Month.

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