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What is the Number 1 thing that determines your success or failure in life?
If you lack the proper mindset, you will be failing in your plans, no matter what. And if you possess the right mindset, you will eventually succeed in whatever goal you have set.
When it comes to money, having the proper mindset is even more crucial.
The reason is that money and wealth as we know it today is a modern invention which we do not have evolved as species to handle. Our ancestors did not have something that resembles money so we lack the brain circuitry to properly understand it and use it. Only with conscious effort we are able to comprehend even the simplest financial concepts.
On top of that, modern society essentially teaches us to be poor. It forces people to spend years of their lives studying in order to get a job (which they usually hate), it fails to educate them on the essential financial matters (like investing), gets them trapped into the Rat Race and deters them from taking calculated risks that could change their lives (like starting an online business).
The best way to build the right money mindset is to invest your time in studying high quality books. These books drill into a specific topic or concept and analyze it, allowing you to acquire money related knowledge. It is one of the best investment you can ever make.
“An investment in knowledge pays the best interest.”
– Benjamin Franklin
Want to get my eBook "From Employee to Online Entrepreneur" as a nice PDF? Download it below!
Complementary to books, you should stay informed by reading articles that are actionable and to the point.
During the past three years I have been routinely reading more than 10 articles per day on average. With some conservative calculations it seems that I have read over 10,000 articles (not a typo).
Reading is basically integrated into my daily routine, plus I read during idle times (like when commuting) and at random times during the day (like when chilling).
Most of those articles were moderately helpful, others were boring and full of fluff talk, and others were really valuable and helped me understand complex concepts and ideas.
But some of them really stood out and made a difference in my awareness, mainly because they felt like a punch in the gut while I was reading them.
These were the articles that were not talking about a specific technical topic, but discussed the more general issue of making money and how you should think in order to build wealth and become rich.
And these are the articles that probably mattered the most because they assisted me in adjusting my money mindset and setting it straight.
I have shared these articles with friends and peers in order to help them in their own journey and share my enthusiasm, and most of the times they also loved them and thanked me for doing so.
In this post, I share the 21 most influencing of these articles, which helped me improve my thinking about money, and also reflect my current philosophy about money and wealth.
For each one of the articles, I will post the title and link, a short description and a brief excerpt.
This is an article I have written about the difficulties of making money. It is obviously self-serving and I am biased, but I truly believe that I accurately describe what it takes to be successful in the money making front. I also address some serious misconceptions around wealth and provide a way to structure your life in order to maximize your chances of success. I guarantee it will be worth your time.
“Another underlying principle is that building wealth and making money is a direct function of the amount of value you provide to society, ideally via the system you have built. Money is just the means through which value is transferred from one party to another.
If you are not providing value to other people, how do expect money to flow to you?
You cannot build wealth without providing an enormous amount of value!”
This article comes from MJ DeMarco, the author of one of my favorites books of all time, “The Millionaire Fastlane” (I can’t recommend it enough). In this superb essay, MJ lays down 11 mindset traps that you should break away from in order to make it in the game of wealth and become a millionaire.
“Escape Mainstream BS; “The Message of Mediocrity”
Sorry, but saving ten bucks a week for the rest of your life just because you stopped drinking Starbucks isn’t going to make you rich.
This crap advice is apart of the typical the mainstream mediocre BS that you’re fed daily. This shitty advice is everywhere: TV, radio personalities, bloggers, magazines articles, and on the front page of Yahoo Finance, a daily smattering of mediocre advice dispensed from mediocre people, all designed to keep you pinned down to a miserable existence of lack and deprivation.
If you want a different type of life, you’re going to need a different type of strategy, one that goes beyond the mainstream boondoggle of jobs, stock market investing, 401(k)s, and soul-killing frugality.”
Yeap. It is all about the mindset. This article is based on author Steve Siebold’s excellent book, “How Rich People Think”, where he investigates the differences in thinking between rich and poor (average) people. As he states, getting rich often has less to do with the money than the mentality.
“Rich people think about money logically … while average people see money through the eyes of emotion.
‘An ordinarily smart, well-educated, and otherwise successful person can be instantly transformed into a fear-based, scarcity-driven thinker whose greatest financial aspiration is to retire comfortably,’ Siebold writes. ‘The world class sees money for what it is and what it’s not, through the eyes of logic. The great ones know money is a critical tool that presents options and opportunities.’”
In this outstanding essay, Venture Capitalist Paul Graham explains what wealth is and how to go around building it. He demonstrates how money does not equal wealth, how to utilize leverage in your actions and how to “make the pie larger”.
“Startups are not magic. They don’t change the laws of wealth creation. They just represent a point at the far end of the curve. There is a conservation law at work here: if you want to make a million dollars, you have to endure a million dollars’ worth of pain.
For example, one way to make a million dollars would be to work for the Post Office your whole life, and save every penny of your salary. Imagine the stress of working for the Post Office for fifty years.
In a startup you compress all this stress into three or four years. You do tend to get a certain bulk discount if you buy the economy-size pain, but you can’t evade the fundamental conservation law. If starting a startup were easy, everyone would do it.”
As I mentioned in the beginning, society brainwashes us to become poor. And the provocative guys over at the Wall Street Playboys blog do an excellent job describing how. They pinpoint some of the most common negative associations that people make with money, and then deconstruct them.
Note that these guys write in a “no-excuses”, “in your face” kind of way. Personally I love it and highly recommend them, but some people might find them a bit offensive. Tread with care, you have been warned.
“The Negative Stigma of Being Rich: This is another funny one that the media tries to teach you. If you become rich you’re going to lose friends! So don’t become rich or else you will lose all of your close friends! Non-sense.
For anyone who has made money, they know that they can find out who their friends are based on their own success. If a reader writes in and says he made $10K, $10M, or $100M there is going to be nothing but applause on this side of the internet. This is rare. Most people will become jealous and you may lose a “friend”.
The term friend is in quotes for a reason. What type of “friend” is going to be unhappy when you succeed? That’s right no friend at all.
When the media gives you examples of people who became rich and lost friends they are trying to ingrain a negative association with money in your brain. Don’t let them!”
As I have discussed many times in this blog, serious progress to wealth is not made in a linear fashion, but rather in an exponential one.
We are all bound by a single variable: time. This makes us totally non-scalable. Unless you decouple your income from your time, you will be stuck in a linear way which leads to nowhere.
And of course the way we approach income generation derives from the way we are thinking. My good friend Roberto at Project Be Best does a great job explaining this concept:
“Let me tell you ladies and gentlemen, this is not the way exceptional people do it. All someone needs to understand is that time is by far the single most valuable resource we all as human beings have (cyborg prototypes are not fully functional as of this writing).
Human beings have certain limitations: Time, energy, willpower etc. Each time you think I need to work more or harder in order to earn more money, you make this fundamental, lethal mistake – your time or energy is infinite and you will never run out of it.”
Yeap, things are getting deep now. Famous author, entrepreneur and investor James Altucher writes an excellent piece on corporate slavery and how to avoid it.
As outrageous as it might sound, the majority of the population today is entrapped in what only could be described as modern slavery. Our modern lifestyle is carefully engineered in a way that leads them towards that direction. But of course, if you are living in a fairly democratic country, you have the ability to break free.
“As it stands, between above the line and below the line expenses taken out of your salary, you are probably left with 1/10 of your salary. In other words, you could be making ten times as much money if you started to un-slave yourself.
Most people can make 5-10x more by being creative and figuring out how to offer services on their own without the company taking out all of the “Above the Line” expenses. And then there are ways to limit the “Below the Line” expenses.
You want to own your time. Own your work. Own the value you create for others. Protect yourself so nobody can fire you. Not be owned by the bank or the government. Not be owned by your relationships. Own your thoughts.”
This article by Personal Development guru Steve Pavlina explains how to succeed even during rough times by focusing on the single most important thing that matters in business: Value.
It also comes as a “reply” to all the whiners that are used to blame everyone else but themselves about their shortcomings and lack of success. You probably have heard them yell “It is the government’s fault. It is the economy’s fault”, and so on and so forth. Well it is not; it is always your fault.
“A recession is possibly the best time to launch a new business or to expand an existing one. It’s also a great time to get ahead in your career. I know this sounds counter-intuitive, so let me ‘splain.
Instead of focusing on trying to make more money, put your time and energy into CREATING and DELIVERING real value. Find a way to give people what they want and/or need.
What is money? Money is simply a medium for exchanging value. Money is what you receive in exchange for the value you create and deliver. If you can increase your outflow of value creation and delivery, you can increase your inflow of money received.”
If you are a regular reader of this website, you know where this is going. You know the answer already. The only way to get really rich is by building a scalable business in which you have a large piece of equity.
And it has never been easier to launch your own business than today. Start with the online world to minimize risk even more. By staying committed to it, you can reach the elusive $1M in Net Worth in less than 10 years.
“That’s why the only way to become really rich financially and really rich personally — in other words really, really rich — is to start your own business. Even if it’s just on the side. Even if it’s just a slightly stepped-up hobby.
There’s no reason not to. You don’t have to quit your job right away; in fact, you probably shouldn’t. (One of the best ways to minimize your risk is to keep your full-time job while you build your foundation for success.) Plus the basics of starting a business are easy; you can do it in one day.”
Alright, time for some more tough love!
Similar to the Wall Street Playboys, Victor Pride from Bold & Determined speaks some hard truths about money and life. Victor talks about the attitude you should have when it comes to money and the commitment you have to show in order to succeed.
His writing style can be a bit controversial, so again, proceed at your own risk!
““Victor, how long will it take to build a business, build a body, get rich?”
I get asked this same dumb question all the time, and I’m going to answer it once and for all right here. Here’s the answer.
It will take as long as it takes you bum. You’re wasting your time and you’re wasting my time asking me that poverty question.
It’s not even a real question, it’s a way for you to say “oh, that’s too long. I’ll just do something else“.
“How long will it take?” is a moronic, unanswerable question so if you ask it you must be a moron, right?
It will take as long as it takes and when you ask that question what you want is an excuse to quit. You can’t have excuses from me.”
Grant Cardone is an investor, entrepreneur and best-selling author. He has written a great book called “The 10X Rule”, where he basically states that in order to attain success, you should make big goals (as in 10 times larger than you would have thought) and then apply the required massive amount of effort to achieve them.
Cardone knows that society influences us in a negative way when it comes to money, and in this article, he pinpoints 12 mental traps we should avoid in order to break free from poverty and slavery.
“3. “Bigger isn’t better.”
Wrong. Bigger is better and more is glory. Quit thinking little. The best companies in the world are big. Staying small takes a lot of energy. I talk about this in The 10X Rule — go 10 times bigger than you think is necessary. It’s more fun and it gives you a better chance of succeeding.
Over the last 12 months I have interviewed more than 50 very successful entrepreneurs that run million-dollar companies to $100 million companies that started with nothing. Almost every one of them shared with me that their biggest regret was not thinking bigger from the beginning.”
Another great piece from Grant Cardone. Money has been demonized in our society in many ways. Unfortunately, when you demonize something, you tend to stay away from it. Cardone provides a list of reasons why “more money” is a must for you, your family and your business.
“Money is freedom! I don’t go to work to work and I don’t go to make money. I go to work each day with the purpose to create freedom for my family and myself. Most wealthy people enjoy the freedom money provides them. Freedom provides you with the ability to try new things, make new investments and have more choices.
You deserve more money. When I understood that I deserved money as much as anyone else and that “more money” did not turn me into some evil, greedy person, I started earning more money. Commit to getting rid of all limiting beliefs and ideas that may be blocking you from having what you deserve, “more money.””
Wall Street Playboys nailed it with this article. They provide a solid framework on how anyone can generate $1M in Net Worth in 10 years (or less).
They explain the difference between having a job versus a career and running a business, and lay out the numbers you have to achieve each year in order to reach this great milestone.
On a similar spirit, I have described how to make $1M in 10 years or less by building an online business.
“– A job is a time for money exchange only done to *temporarily* build skills for a future career or business
– Never work for free or for minimum wage
– A career is a performance based income stream and a business makes money while you sleep
– Find transferable skills: Sales, Networking, Efficiency, Maintenance, Continuity
– Simplistically, if you can average ~$200K+ a year over a decade starting at $100K and scaling to $300K+ you will easily become a millionaire if you want. You won’t have time to blow through all the money anyway.
– Again and again, frugality is a joke. If you’re busy earning? The saving part takes care of itself. You don’t get rich if you don’t invest in your skills. Example: “research ways to save $5″ vs. “spend same amount of time making $25″. Option one leads to $5… Option 2 leads to $30 with the same time spent!”
Secret Entourage is an online community geared towards supporting entrepreneurs and business owners. In this article, the community’s founder, Pejman Ghadimi, describes ten things that only “poor” (financially and mindset wise) people do. These are behaviors that you should eliminate from your life in order to advance forward and become rich.
“Always Have a Story or Excuse Why They Haven’t Made It Yet.
I love talking to poor people about success (sarcasm), as they will give you every reason in the book to why they haven’t done anything yet to accomplish their dreams, ideas, or projects. They will say it’s family related, an illness, or just about whatever reason they can come up with to do nothing whatsoever with their life.
Successful people don’t have reasons why they are not wealthy yet because they are working on something to get there, even if it’s at someone else’s company. YES, you can become a millionaire by working for others, and no, it’s not easy, but nothing ever is. So giving excuses about lack of education, poor parenting, and lack of time is exactly what poor people do. The worst part is that they want others to empathize with them.”
Mr. Money Mustache is a popular figure in the online world of Personal Finance. He is actually a guys who retired at his mid-thirties (yes, totally doable), living off the passive income that his investments throw.
In this article, he argues that the best decade to start building your skills and becoming wealthy is during your 20s (which I totally agree with), contrasting a viral “lifestyle” article that argued that “If You Have Savings in Your 20s, You’re Doing Something Wrong.”
“Because here’s the thing about your 20s. They are the time to work. The very, very best time in your life to work your ass off and create an exponential snowball of money, skills, and friendships. Your brain will never be more sponge-like and inexhaustible. You will never feel more motivated and less cynical than you do now. And you will never have another decade of pre-childraising freedom in your life.
This means fiddling with meticulous, gigantic spreadsheets at 11:56 PM so you can get the impressively casual email to the department polished and sent by 2:30am. Or wiring your brain to source code and compiler windows spread out across three 34″ monitors on your stand-up desk while you design software in zen-like silence at 6am before everyone else shows up at work.”
Famous entrepreneur and Venture Capitalist Mark Suster runs the excellent blog Both Sides of the Table offering advice on startups, investing and entrepreneurship.
In this article, he describes the mentality you should have when you decide what your next move in your career should be. In the early stages, you usually concentrate on building knowledge and skill (“learn”), but later on it is time to move on to building wealth (“earn”).
This article was very influential to me. It was the final push to stop fumbling around with smaller projects of limited scale and potential, and focus on the big things that will actually make a difference.
“For most people it’s learn. I only emphasize the question before I find it much more helpful to join a company with realistic expectations of what you want to get out of it. My advice is often, “make sure that what you get out of working at this company is one or several of the following: a great network of talented executives and VCs, more responsibility than your last job, specific industry or technical skills that will help you in what you do next, a chance to partner with companies that will increase your industry relationships, etc.” Learn now to earn later.
If you really want to earn you need to be in the top 3-4 in the company. Best to be a founder. Very few people can do this. It’s a rare skill. Be realistic about your skills, background and ideas.”
James Altucher again, listing 10 reasons why you should ditch your job. Not much to comment on here, read on.
“You’ve been replaced. Technology, outsourcing, a growing temp staffing industry, productivity efficiencies, have all replaced the middle class.
Your Retirement Plan is For S**t. I don’t care how much you set aside for your 401k. It’s over. The whole myth of savings is gone. Inflation will carve out the bulk of your 401k. And in order to cash in on that retirement plan you have to live for a really long time doing stuff you don’t like to do. And then suddenly you’re 80 and you’re living a reduced lifestyle in a cave and can barely keep warm at night.”
Billy Murphy is a serial entrepreneur, blogger and podcaster who runs the website Forever Jobless. From the title of his site, you understand that he talks about business, entrepreneurship and making money outside a job.
In this article, Billy explains the mechanics of a math based concept named “Expected Value” and provides an applicable framework that helps you make calculated decisions in a way that in the long run it is guaranteed you will get a positive outcome.
“You need to take advantage of all the +EV opportunities you can. The sooner you do, the further along you’ll be when the next opportunity comes. […] I you start taking advantage of them now, in 5 years from now the EV calculations you’ll be making will have several more zeroes on them, because the +EV decisions you make now will have you in a very different spot financially than if you had passed them all up.
Most people would dismiss making a +EV decision before they even calculated what they were comparing. They would see risk, and turn away from that option. However, it’s obviously a lot riskier to consistently choose the -EV route. If you choose to pass up +EV opportunities, you’re basically consistently making -EV financial choices. That’s the way 99%+ of people live though.”
This article is written by Dharmesh Shah, founder and CTO at mega marketing company, HubSpot. Dharmesh mentions 8 slow and difficult steps you need to be making in order to increase your chances of becoming a millionaire.
“Stop thinking about making a million dollars and start thinking about serving a million people.
When you only have a few customers and your goal is to make a lot of money, you’re incented to find ways to wring every last dollar out of those customers.
But when you find a way to serve a million people, many other benefits follow. The effect of word of mouth is greatly magnified. The feedback you receive is exponentially greater – and so are your opportunities to improve your products and services. You get to hire more employees and benefit from their experience, their skills, and their overall awesomeness.
Serve a million people – and serve them incredibly well – and the money will follow.”
This short article is written by entrepreneur, author and investor Kevin O’Leary, of the TV show Shark Tank fame. In it, he addresses the issue of “doing what you love” and “following your passion”.
He argues that, in order to be able to follow your biggest dreams and aspirations, you should be willing to do things that might be irrelevant to those and might not particularly like, but will pave the way to achieve them.
For example, if you want to be a philanthropist, the most efficient and effective way is to significantly increase your Net Worth and then leverage your money to help other people by building a foundation or by donating the majority of it.
“He explained that the majority of my income would have to come from a job of some kind, a job I wouldn’t necessarily like doing, but one that wouldn’t interfere with what I love doing.
The question is: What are you willing to do in order to be what you want to be?
It’s not enough to say you want to be a photographer, or an actress, or a writer. You have to want to do all the necessary difficult things that are required to support that goal.
Lots of people are willing to do just that. Some of them make it, both at the doing and the being… but George’s advice was that most don’t.”
For the last article, I have chosen another post from Steve Pavlina. Here, Pavlina talks about one of the most fundamental, but also most misunderstood, aspects of the money making process. He argues that in order to be able to earn $10K per month, you have to provide a value equal to $10K to society.
Pretty straightforward, yet most people cannot comprehend how this works. Instead, they opt to follow career paths in fields that society clearly shows that do not have particular value (see Literary Arts etc.) and then scratch their heads when they remain unemployed. Solid read.
“Instead of thinking about being paid $10K per month, put your focus on generating $10K+ of value for society. Don’t ask, How can I earn $10K per month? Ask instead, How can I create and provide $10K of value for others each month?
Thinking about how you can generate significant value for others may seem like a tall order, but it’s a great way to cut through the B.S. that might otherwise get in your way. If a certain option clearly won’t generate $10K+ per month in value for other people — as in, there’s no way anyone would receive that much value, collectively or individually — then you can reject that option.
The hard truth is that many people invest in lines of work and paths of skill-building that don’t provide — and will never provide — anywhere close to $10K of value for others, especially if this value is to be provided each and every month.”
In order to achieve success and attain wealth, your money mindset has to be in the correct place. Otherwise, you are going to struggle financially and fail to achieve Financial Freedom.
In this post, I shared with you several of the articles that helped me shape my money mindset and allowed me to see more clearly what is going on in the “money world”.
Some are a breeze to read, some are harsh and brutally honest. But all of them provide valid points that you should keep in mind and refer to often.
Reading all of them requires a serious time commitment; this is a lot of material indeed. However, I guarantee that the Return On your Time Investment (ROTI) will be huge and totally justify your effort, if you put into practice even a 5% of what you will read.
Closing, I will give you one of my favorite quotes about knowledge and education.
“Formal education will make you a living; self-education will make you a fortune.”
– Jim Rohn