What is Rich Mindset? What’s the difference of Rich Mindset and Poor Mindset?
It’s simple, there are two aspects: stock thinking and flow thinking.
Poor people treat earning money as the ultimate goal, measuring their wealth by how much money they have.
As long as this ideology persists, they will always be poor because they use their energy to pursue cash currency throughout their lives without spending time studying the market.
On the other hand, rich people understand that competition in the world is about stock competition.
They never pursue cash currency or view it as wealth. They also do not measure their wealth by the amount of cash currency they have.
What they pursue is occupying stock resources, and when they do so, money will come to them automatically.
What is stock? It refers to the “assets” that occupy social resources, such as ports, factories, shops, real estate, company equity, farmland, wineries, and more.
The characteristics of these assets are that they can bring stable output. They are not consumables themselves, but they can continuously produce consumables. Or like shipping nodes such as ports or airports, they are necessary links for commercial transportation. And they generally have one feature: most are immovable property.
I recommend reading the book “Rich Dad Poor Dad.” In the book, the author mentioned that he went to “rich dad’s” house to learn how to become rich.
The first thing “rich dad” said to him was, “You can work for me, but I will never pay you a salary because once you do, you will fall into an employee mindset, and this is a trap.”
He thought he could start making a lot of money quickly, but for a long time, “rich dad” only played Monopoly-like games with him.
Until one day, Robert finally couldn’t help but ask, and “rich dad” revealed the most profitable business – asset mergers and acquisitions – from the game, and also talked about how “rich dad” became wealthy by buying land and building houses.
The book repeatedly mentions that the secret to getting rich is four green houses and one red hotel.
Is it because you can buy four green houses at a low price and then sell them for a profit when they rise?
If you still think this way, you are still thinking like a poor person because you still see earning money as the ultimate goal.
The essence of the four green houses and one red hotel is that by occupying these resources, society has to do business with you.
For example, if you have a residential property in a first-tier city, workers have to pay you part of their monthly wages through rent, and you don’t have to work at all.
We can see this process as society supporting you because you occupy housing resources, and you can enjoy food and clothing without labor.
At this point, someone may ask, why not save a large sum of money in the bank and earn interest every month? Even the interest income earned is higher than the rent income from buying a house with the same amount of money.
Yes, at any time, the horizontal comparison of rent-to-price ratio is lower than the interest on deposits.
What is the anchor for currency? It is its purchasing power, which decreases continuously with inflation. What is the anchor for stock assets? It is human beings’ eternal demand for them, such as the demand for housing, which will never change and even become more robust with economic development.
In fact, buying assets is “shorting” paper currency, and they did bet correctly. Since the collapse of the Bretton Woods system, the issuance of currencies worldwide has been unrestricted, and inflation will continue forever. Smart rich people have seen through this.
How did Warren Buffett get rich? He bought several tech stocks and Coca-Cola’s stock in the early days, and has held them to date, becoming wealthy through dividends.
So what should ordinary people do?
We must understand that, instead of working hard to earn money, it is more important to clarify what we should store.
Remember one thing, whether you have a lot or a little money is just an external appearance. The essence of financial freedom is that you hold resources in your hands and can live a comfortable life without the need to work.