They think there is not enough to go around, so they operate out of fear. Those that live with a scarcity mindset and those who live with a mindset of abundance.īy the former, what he meant is that many people see a world that is scarce. Which type of money problem do you want?” Scarcity vs abundance mentalityĪccording to my rich dad there are two types of people in the world. My rich dad said, “There are two kinds of money problems. Rather, it’s about a change in your mindset. The reality is that financial freedom is not about how much money you have. And it certainly doesn’t feel like financial freedom. They work hard all their life just to decrease their quality of life when they’re ready to enjoy the fruits of their labor. Often times, because they will not have steady income outside of their savings and investments, these people are advised by their advisors to cut back their expenses in retirement and live below their means. They work hard all their lives, putting money in a 401(k), and like mentioned above, they hope they can make their proverbial million dollars or whatever number they have in their head. Most people define financial freedom as having enough to retire. Without knowing how to put that million dollars to work, many people would run out of money in their retirement well before they passed away. And in the state of Hawaii, it only would last 11 years. I wrote about this not too long ago in my article, “ The Poor Mindset of a Millionaire.” As I wrote then, “The USA Today reports that at least 37% of American’s believe they’ll need at least $1 million saved up in order to retire safely.” The problem with this is that a million bucks only lasts around couple decades in many places. We often think a certain amount of money will provide financial freedom, but we’re often dead wrong about how much we really need. It’s not just a really rich person problem, either. And towards the end of his life, Ed McMahon faced foreclosure on his Beverly Hills home and owed $747,000 in credit-card debt. Nicole Murphy spent her $15-million divorce settlement in less than four years. Each had millions of dollars and lost it all. Take famous people like Ed McMahon from “The Tonight Show” and Nicole Murphy, the ex-wife of actor Eddie Murphy. You can have a lot of money and still not be free. In fact, you can have a lot of money and still be poor. The problem with statements like these is that they assume having a lot of money is what leads to financial freedom. I often hear people say things like, “If I only had a million dollars I’d be financially free,” or “If I only had that high paying job, all my money problems would be solved.”
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