You can’t get rich by living cheaply. Being frugal and saving dollars won’t turn you into a millionaire either.
You can also cross out winning the lottery and getting an unexpected inheritance as possibilities for the path to riches. Right now, right at this moment, no matter where you are financially, if you want to become rich, then act as if you’re already successful and wealthy. Live and invest like you’re a millionaire. How?
Start with your mindset. Have you read Think and Grow Rich? Now notice it’s not save and grow rich. Or be cheap and grow rich. It’s called Think and Grow Rich.
You hear conventional wisdom say, waste not, want not, be tight, be frugal, cut up your credit cards, live below your means, don’t drink lattes in the morning from Starbucks so you save a few dollars. Then put money in that investment for however many years at compound interest and get a lot of money.
Here is the problem with that way of living. Have you heard the saying, “A penny saved is a penny earned?” Well, a penny saved is still just a worthless penny!
It doesn’t change anything. If that Starbucks coffee makes a difference in your budget, you’re not earning enough with your skills. Now for an employee it’s okay because their income is fixed but for entrepreneurs like us, we are upgrading our skills and improving all the time so that we can increase our income.
Now if your goal is to become a millionaire, start thinking like one and acting like one, even if your bank account is still a few figures short. You’re probably thinking, how can you spend like a millionaire if you don’t yet have the cash?
Begin with these tips to change your mindset to think and act like the rich.
Watch this video about how to act as if you’ll become successful.
1. Generosity Is Abundance
Being generous starts before you become wealthy. As I said earlier, you just can’t get rich on the cheap. Even if you make $100,000 a year, and you’re the middle class, the top 6 percent, you can’t be frugal. Cutting up credit cards and living below your means won’t take you that next level to become a millionaire.
Why is it important to have an abundance mindset? When you become the 0.1% of the population, if you’re frugal, no one wants to do business with you.
I’m known as being generous in business. That’s why people partner with me – because I’m generous. When I do a deal, I could take this much money and always say you know what, you don’t need to give me that much, just give me this much.
I volunteer to take less. Others would negotiate hard for every single nickel and dime. But when you take less and you feel good about the relationship, people will come back to do more deals. It’s much easier to do business when it comes to you.
When you try to chase business, and you have the reputation of being a cheapskate, nobody wants to do business with you.
Maybe you got a great deal that one time by twisting someone’s arm, but there won’t be a second time. Is that the reputation you want? Or do you want people to say, “I just did some business with Dan, he’s a great guy, he’s generous. You know we will make a lot of money together.”
Which reputation do you want?
2. Generating Infinite Wealth
Reputation in other words, is what I call relational capital. Nowadays it’s worth more than actual capital because with relational capital, you can generate infinite wealth with it. Let people know from the start that you are generous, and your business reputation will get you far.
Most people save their way to bankruptcy. Now I’m not talking about living off your credit cards or borrowing money. I’m not talking about spending foolishly either. You should buy whatever you want as long as your income grows and as long as the saving/ investing ratio keeps getting larger.
By “saving to bankruptcy” I mean living below your means and always feeling poor. I have an aunt in Hong Kong who lived cheaply her whole life. I’ve never met a cheaper person. When we have a family dinner at a restaurant, she’ll sneak to the bathroom, just five minutes before the bill comes. Only when the bill is paid then she comes out, every time.
I still remember when my relatives used to give me $100 to $200 for lucky money when I was a child. She always gave me coins or a piece of candy. Probably it had expired, who knows. She’s so cheap, yet she’s accumulated maybe a little bit of money, not even a lot despite all her money saving efforts. And she looks miserable.
Do you want to hang around with people like that? Of course not. You don’t want to be infected by their cheapness.
Have the abundant mindset instead of being tightfisted. Have the open palm approach and just give to others. It’s very interesting how money works. If you’re not thinking about it, or worrying about it, if you’re not needy, it just comes to you. Just take my word for it.
When you can get to that point, when you do the right thing with the right people for the right reasons, money comes.
3. Living The Millionaire Lifestyle So You Can Afford It
Now if you have the abundant mindset and you’re generous, next, you want to get comfortable with being rich. When I was just getting started many years ago as a public speaker, sometimes I had to travel to different places.
I wanted to condition my mind to have that abundance mindset, that abundant mentality, so I started with my mode of travel. At the time, I was still living in the city of Surrey, and a trip from Surrey to the airport by taxi cost me about $60 to $70. One day, I thought I should act “as if”.
Act as if I were very rich, to infuse myself with the feeling that I deserved a better life. I said to myself, “You know what, I’m going to get a limousine instead of a cab.” A limousine costs about $100 to $110 to get to the airport. That was an extra $40 to $60 but that didn’t matter.
Is there a difference travelling in a cab versus a limousine? You bet. I was in the back of one of those long stretch ones with the Fiji water and the music pumping into the air. It was nice. And I noticed when I take a cab, nobody looks at the car. When I take a limo, a lot of people look at it. They want to know who’s inside.
That observation was empowering and that new confidence in my self esteem carried me through to the airport and the place where I had to speak. I found that it boosted my performance.
But on the way back, I switched back to a cab. I felt so cheap. Why? I noticed the driver was a bit smelly, I noticed a wad of gum stuck somewhere, and I wondered where my limo was. Then I vowed, from then on, no more taxis. The limo became my new level of comfort.
Next year, my goal is to fly by private plane. I hate the stress and messiness of flying commercial. Now does flying private cost an outrageous amount of money? Of course. But instead of telling myself I couldn’t afford it like how most people do, I asked myself, “How can I afford it?”
4. How Can You Afford A Millionaire Lifestyle?
Rich people learn to be resourceful. They ask, “How can I make it make me money?” They don’t think about how expensive or unaffordable something is.
So I came up with a plan to fly private and I looked at the numbers. In order for me to fly private, I didn’t need to buy a plane, I could join a chartered membership.
I can negotiate in the first class flight and with the money I could fly private. This set up actually makes me money so I can fly private and I can take some vacation time and stay a few extra days with Jennie.
But now that I’m accustomed to it, I can’t go back to Air Canada with the narrow seats. I have a new level of comfort, and that’s the lesson here. Don’t say, “I can’t afford it,” say, “How can I make it make me money?”
Here’s another way to apply that same idea. I bought a new home for 1.25 million, which has probably gone up $400 to $500 thousand. The house is a liability however, I want to turn it into an asset. How do I do that?
5. How To Create An Asset
By getting the house, I eliminated all the outside meetings that I have to do. If I can get one more productive day per month by not travelling to my meetings, it more than pays for the house.
Now could I have gotten a bigger house? I could have bought a two to three million dollar home. But then again I’m not following my principle of saving a percentage of my income. I don’t need to be foolish with my money.
My house is nice but it’s not a five million dollar home. It’s the best home for me at 4,300 square feet, six bedrooms, and seven bathrooms.
I can make my home into an asset, something that makes me money, because I work from home to save travel time. I save on a gym membership by working out downstairs, and I save on entertainment.
A karaoke system saves me money. Instead of paying $2000 a year on karaoke at someone else’s establishment, I could charge 20 dollars an hour, and turn it into a money making thing, and raise the price of alcohol. You get the idea.
There is a difference in thinking between thinking you can’t afford something, and asking how you can afford it. It’s all just a simple mindset shift.
There’s a great quote I like. “The mind once stretched by a new idea never returns to its original dimensions.” Here’s my version of the quote: a wallet once expanded can never retract to its original state.
Once you get used to living a certain lifestyle, you’ll do whatever you have to do to continue living that lifestyle.
Final Thoughts On How To Act As If You’re A Millionaire
Act as if you’re already wealthy and then you’ll surely become wealthy. Act as if you have unshakable confidence and then people will surely have confidence in you.
Don’t wait until you are a millionaire to become generous and live the lifestyle you want. If there’s something you want, and you can’t afford it right now, ask yourself what you can do so you can afford it.
When you act as if you’re a leader, people will follow you, and if you act as if you’re already a tremendous success then you will become successful.
Would you turn your home into an asset? Comment below.