Pretty sexy car! –
Can we psyche ourselves into building wealth? The word psychological means “of, affecting. Or arising in the mind..” Money and investing management is probably more psychological than anything else. There is not much physical about code on a computer screen representing assets or value. Or having 8% of your paycheck dumped into a low cost index fund every two weeks. Pretty darn simple. I try to use two strategies to trick myself into building wealth on a day to day basis. They will sound silly, but remember no one knows you are thinking this. From the outside you just look like you are normally living your life. So, here we go, time to embarrass myself, but who cares? And the tricks may seem in conflict with each other, but they are not. When balanced they lead to wealth building behavior.
Trick #1, Believing I am rich
This trick is basically looking at all the things you already have and enhancing them to make yourself feel more rich. For example. In my fantasy world I would like to own a Tesla. But I know that this is a colossal waste of money and an absolute over the top luxury item. There is no way I could currently justify buying one of these beautiful and amazing cars. Therefore, I trick myself. I take good care of my 2008 Honda Accord. It is not perfect, but it is clean, organized and I installed one of those $4 devices that props your cell phone up on the dashboard. If I use my imagination, I just think of this car as my Tesla with my cheap little I-phone holder as the touch screen for navigation. I know you are laughing your ass off at me right now, but that is ok. I am happy and content.
But if you dig deeper, you will realize there is a kind of rationality to this illusion. First of all, all the needs of a Tesla are being met by my paid off Honda Accord from 2008. It safely delivers me from point A to point B. With the addition of the I-phone I have all the navigation I could ever need available in this basic car. I also have access to Pandora or any other cool gizmo app.
Ok, pretty silly, I admit it. If Mr. Musk read this he would probably think I was a dork. But, I am a huge fan of Tesla, I love it! And if I had an extra $50k-100k sitting around that I would never need, I would probably go for it. I am where I am.
The Bigger picture
There is a bigger picture here contained in this comical example. If you really look at your life, you probably live WAY better than at least half of all living humanity, like 3.5 BILLION people. So, if you live in a modern country, gain a little perspective on your life. In many ways you are more materially wealthy than any human in all of human history. You have access to a better material existence than all the Kings of the past combined. Do you have food each day, clothing, shelter, computers, steady employment, healthcare, etc.; Man you are rich!
Trick #2, Believing I am poor
Ok, so now I may have lost you with this tag line. “Hey Money Viking, you just talked about how you imagine yourself rich like the guy who invented Monopoly, and now you are pretending to be poor, what gives?”
So, have you ever noticed the most frugal plain clothed people are usually very rich? Maybe you don’t know, but they are out there. Walking around, shopping at thrift stores, driving old cars, living in small houses, diligently recycling and usually sitting on a fortune. They are “acting” poor and living well below their means. Isn’t it wonderful and they are probably so content inside. They feel no pressure to keep up with the latest fashionable trends or “must have” items of the moment. They have conquered financial freedom!
The point is, one can psych themselves into telling themselves they cannot afford something, and over time their investments and savings will grow because they are resisting the urge to waste a bunch of money on something they probably never needed in the first place. Until one day, they can afford almost anything they may want, but have the wisdom to realize they never needed it anyway.
Who knows though, maybe one could split the difference and buy a Tesla Model III? Balance in all things right? Perhaps I just wanted to post a picture of a beautiful Tesla on our blog?