The Upwardly Mobile

The Internet is full of people promising to make you rich, and let’s face it: most of those promises are scams. Those writers who aren’t trying to con you out of your hard-earned cash usually offer the same old obvious, tedious advice—save money each month, avoid unnecessary expenses, and keep your savings in the bank. But for those of us who want to move beyond the Puritanical, a-penny-saved mindset, a more effective method is necessary. Let’s face it: saving is for retirement, not for getting rich. There are a few simple things you can do, however, that will put you well on your way to living more prosperously without adopting the kind of frugal habits that resemble Thoreau’s life at Walden Pond.

1. Act Like You’re Already Rich - In Steve Pavlina’s article, 5 Wealth Lessons from 20 Percent of a Millionaire, Steve discusses the significant shift in identity that it takes to become a millionaire. He argues that it’s impossible to become rich without first becoming comfortable with the lifestyle that accompanies wealth. This doesn’t mean acting like a snob, but it does mean learning to live as if you already had a million bucks. If you think about your wealthy friends and acquaintances, you’ll realize that most of them do most or all of the following:

• Carry larger sums of money in their wallets - Wealthy people are just comfortable with handling larger sums of money. In his post, Steve Pavlina explains how he became comfortable carrying $300 - $500 in his wallet on a regular basis.
• Spend time with wealthy friends and acquaintances - Most wealthy people already know and interact with other wealthy individuals on a regular basis. These individuals are well connected, pro-active, and entrepreneurial. They can provide critical feedback and connections for your next business idea.
• Persist in realizing goals - Perhaps the most important habit that separates the successful, whether wealthy or not, from everyone else is persistence. If you’re going to amass wealth, you’ll have to create value, and that takes effort and persistence. If you set a goal for your personal or professional life, you need to keep at it when the going gets tough. As Calvin Coolidge said, “Persistence and determination alone are omnipotent.”

2. Communicate Effectively and Persuasively - In his best-selling book, The “It” Factor, Mark Wiskup argues that nobody cares about your ideas. And he’s absolutely right! You can spend your time believing that you’re a unique and beautiful snowflake and that the world should simply listen when you speak, or you can learn to become a magnetic communicator who draws people in, rallies them to your cause, and primes them to help you reach your goals. Since realizing a goal as significant as becoming wealthy isn’t something you can do alone, effective communication is a critical part of building wealth.

3. Spend Money that Makes Money - The old adage that you have to spend money to make money is absolutely true. Every exercise in entrepreneurship requires an investment. Just how much investment? Well, if you really want to maximize your earning power, try the 80-20 Rule, which states that for many events, 80% of the results come from 20% of the causes. If you’ve decided you want to be rich, you’ll need to start focusing your earnings on investments that work for you, rather than against you. While I can’t give you specific investment tips, I can tell you how to figure it out for yourself.

• Start Tracking Your Spending - Thanks to Mint, tracking your spending habits has become incredibly easy. Sign up for a free account and begin following your own spending automatically.
• Invest More Each Month - While most of will have trouble investing 80% of our earnings, we can all invest a bit more and begin transitioning to investing a full 80% or more. The irony is that it’s easier to spend 80% of your money on making money when you’re already rich. In order to get there, however, you’ll have to start taking steps gradually.
• Invest Better Each Month - Once you begin tracking your spending, it should be easy to tell which investments were most effective. Whether you place your money in a high-yield money market account or invest it in a new business idea, you need to be willing to make adjustments and move your money out of ineffective investments and into effective ones. As Andrew Carnegie said, “Put all your eggs in one basket and then watch that basket.”

4. Take Calculated Risks - The most successful entrepreneurs, investors, and kindergarten teachers know how to take calculated risks. Though their goals certainly differ, they all know how to set goals that fit a few key conditions and then take the risks necessary to make those goals a reality. Calculated risks always have a few things in common:

• Failure isn’t devastating - Taking risks that will result in financial, emotional or physical ruin is, over time, a sure recipe for disaster. If you could lose it all if you fail, it isn’t a calculated risk.
• The Reward is Significant - If you have to invest significant amounts of time or money for insignificant rewards, you should look elsewhere.
• The odds are in your favor - Nothing is a sure thing, but many outcomes are likely enough that it’s worth taking a risk. I use the 80-20 rule here as well. If I feel I have an 80% chance of success and the previous two factors are also met, I’ll take the risk without much further thought. When the reward is greater or the result of failure is less significant, I’ll also consider trying it.

5. Hire a Virtual Assistant - I’ve already extolled the virtues of working with a virtual assistant, but it’s worth taking a few moments to return to the subject here. As I mentioned earlier, you have to create value to amass wealth. It’s often difficult, however, to create significant amounts of value in any single interaction. It’s much easier to create moderate amounts and then repeat. If you can find a model that works, you can use a virtual assistant to help you duplicate your efforts. Whether you use your VA to increase traffic to your website, sell your product, or run a PR blitz, you’re much more likely to succeed if you can leverage the power of an effective, low-cost workforce. Imagine if you had your own personal team dedicated to creating wealth for you!