As you know, one of the most important keys to creating wealth is the right attitude. That is why I decided to share with you in a series of articles the Attitudes of the Wealthy. This is the eighth article of that series.
Attitudes of the Wealthy #22: Philanthropy and Networking
In the last article, we spoke about how the wealthy do charity work and give back to the community. The biggest philanthropists are the wealthiest people.
First in this series today we will talk about how the wealthy network with other high net worth people in their philanthropy and develop business at the same time.
Many years ago I used to do business coaching for financial planning and accounting firms. Besides earning money from my coaching clients, I was able to support their philanthropic interests. The more money they made, the easier it became to give back to the community.
One of my individual coaching clients was a vice-president with Merrill-Lynch. Let’s call him Nick. He decided to serve on the board of a local charity to give back to the community that was responsible for providing the clients that invested with him.
As it turns out, by demonstrating his interest in philanthropy by serving on the board, he ended up meeting other wealthy people who also were charitably inclined; they also were board members on the same charity. They got to know one another while serving on the board of the charity, and they also learned what each other did when they were not at the charity.
Some were in manufacturing, some were in retail, some were in real estate, and some were in construction. All of them were very successful in their field, and they also had the time to serve on the board of the charity.
A motivational speaker named Jim Rohn used to say, “Your income will be the average of the five people you spend the most time with.” And Nick was spending time with very wealthy people. As time passed, some of them started doing business with Nick, and his assets under management grew substantially.
And it also turned out well for other board members. The person in real estate found properties for the person in construction. The one in manufacturing decided to build a facility on the property the realtor found for him. The person in construction consulted for the one who wanted to build his manufacturing plant, and so on.
Not only was serving on the board of the charity good for the community, it was good for the business of the board members as well. See where you want to serve your community and how that might impact your business.
Attitudes of the Wealthy #23: Zero-sum game
Next, we will talk about how the wealthy recognize that wealth creation is NOT a zero-sum game.
In a zero-sum game what one person gains equals what someone else loses, so the net change in wealth is zero. An example would be in playing poker: The winner has the money that the other players lost, and the total amount of money on the table did not change, only who gained or lost the money.
Economies and creating wealth do not work that way. As your wealth grows it is not at the expense of others. As an example, when you purchase groceries, the money you spent is used to pay wages to someone else, and that person uses those wages to buy their groceries, and the cycle continues. For each dollar spent, it could be multiplied ten times or more in the economy.
I have been in workshops where a mini-economy is created by people who have various products or services for sale. We each buy and sell things and the flow of money expands. The size of the wealth pie is not fixed. It can grow, it can shrink, but your cut of the pie does not reduce another person’s cut of the wealth pie.
Wealthy people operate on the basis of an expanding economy where their wealth does not grow at the expense of others. It is not a zero-sum game, but an expansion and increased velocity of money flow.
This also touches on the difference between a scarcity money mindset versus a prosperity mindset, as though hoarding money helps it to grow.
Are you operating from a scarcity mindset and acting as though you are playing in a zero-sum game?
Are you helping others gain wealth?
Attitudes of the Wealthy #24: Focus on value, not effort
To wrap up this article in the series we will talk about how the wealthy focus on output or value versus input or effort.
Many people have jobs that pay them on an hourly basis. Regardless of the amount of work they complete they will receive an income based on their input of time, not value. They might have expended a lot of effort during that time and produced great results, but that will not change their hourly pay.
The wealthy mindset focuses on the output, or value or result produced instead.
As an example, if you make a suggestion to a client that results in an increase in their productivity you could set up a compensation agreement that says you get 10% or 20% of the additional revenue produced from that increase in productivity.
I have a portfolio manager who only gets paid when he exceeds the “high water mark” value of my portfolio each month. If my portfolio is worth $1,000,000 at the end of October, and worth $950,000 at the end of November, he is paid nothing. If my portfolio is worth $1,050,000 at the end of November, he gets paid 20% of the gains. He is paid based on value or results produced.
It does not matter how much time he put in, or the effort he expended: He will only get paid based on the results he produces. This has worked out well for us and for him as well.
J Paul Getty said in his book “How to Be Rich” that he would prefer to have 1% of the efforts of 100 people than 100% of his own efforts. (You can tell what my reading list is like.)
If you are enjoying the information in these articles I encourage you to check out my course 9 Steps to Financial Freedom at https://wealthonanyincome.com/9days
To your prosperity,
Rennie
Often in the media, Rennie Gabriel supports individuals and business owners to create work as a choice, instead of a requirement, just as he did for himself. Rennie had gone broke twice (two divorces), but using the same concepts published in his book, Rennie created more wealth in each recovery than what he had prior.
As a highly rated instructor at the University of California in Los Angeles (UCLA), Rennie uses his award-winning, best-selling book, Wealth On Any Income, to teach effective money skills from both the emotional/psychological aspects as well as the practical components. His book has been translated into five languages. Rennie is a retired Chartered Life Underwriter (CLU) and Certified Financial Planner® (CFP®) and often adds BFD to his credentials.
His extensive knowledge on real estate and finance is useful not only to those who own or invest in real estate, but to anyone striving for a better life by trying to achieve financial freedom.
His clients range from financial professionals, like CPAs, stock brokers and financial planning firms, to entrepreneurs in the transformational space (coaches, authors and speakers). He also works with large organizations like the FBI, American National Insurance and Toyota Motors.
After 40 successful years in financial services, Rennie now works to donate 100% of the profits from his speaking fees, wealth programs, books and business coaching to charities, the primary one is www.ShelterToSoldier.org where dogs are rescued, trained and donated as service animals for soldiers with PTSD and TBI (Post Traumatic Stress Disorder and Traumatic Brain Injuries)