Ramit Sethi knows a thing or two about building wealth. The creator of “I Will Teach You To Be Rich” credits changing his mindset with taking him from middle class to millionaire and he believes that with the right psychological moves, anyone can do the same.
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“I’ve helped millions of people figure out how to take control of their money — and how to grow it,” Sethi wrote in a recent newsletter. “And on this journey, four life-changing ideas about money have guided me.”
According to Sethi, these four ideas can change how you view and build wealth.
Aim For Being 85% Right
Many people are scared of starting their wealth-building journey out of fear that they will mess up. But Sethi said you should aim for progress over perfection — you don’t need to get 100% correct 100% of the time.
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“Simply getting started is the most important thing you can do to improve your finances,” he wrote. “Many people believe they need to become an expert before investing — but that’s the wrong mindset. Too many of us get overwhelmed, thinking that we must manage our money perfectly, leading us to do nothing.”
He continued: “I would rather you take action and get it 85% right than do nothing at all. Why? Because 85% is way better than 0%. The easiest way to take control of your money is to take it one step at a time without worrying about being perfect.”
The Definition of ‘Rich’ Is Personal
Everyone values different things, so you shouldn’t let outside influences determine your definition of wealth.
“Do you have to wear a Rolex and drive a Lamborghini? No,” Sethi wrote. “A rich life isn’t only about accumulating money. The point of a rich life is not to hoard. It’s to decide your rich life and then use money to fuel it. But to live a rich life, you must understand what ‘rich’ means to you personally.”
This might mean going to the grocery store without having to worry about how much everything costs or being able to take your family on an annual vacation.
“Living a rich life means making your money work for you in a way that aligns your rich life vision with how you spend your money,” Sethi wrote.
There’s No Limit to How Much Money You Can Make
When you’re trying to improve your finances, the emphasis tends to be on cutting back on spending, but Sethi said it’s better to focus on increasing your income.
“Since we were kids, many of us have been taught about cutting back, and we internalize these messages,” he wrote. “Don’t spend money on lattes — no designer jeans. No vacations. No, no, no, no.”
Sethi continued: “But while I believe we need to control our spending, I don’t want to focus only on ‘no.’ I think we can use money to say ‘yes.’ That’s important because there’s a limit to how much you can cut, but there’s no limit to how much you can earn.”
You can increase your income by negotiating a pay raise, taking on a side hustle or even starting your own business.
Remember That Money Is Meant To Be Enjoyed
Many people feel guilt about spending money, but Sethi said this defies the true purpose of having it.
“I think money is meant to be used,” he wrote. “It’s meant to be enjoyed. Yes, you need to have goals — but you also need to have some fun along the way.”
Sethi recommended being mindful about your spending to enjoy your money without feeling guilty or detracting from your financial goals.
“You don’t need a budget, but you do need to decide what your rich life is and how you are going to use the money to get there,” he wrote. “That means you can spend extravagantly on the things you want — but it also means that you have to cut costs mercilessly on the things you don’t.”
If, for example, you love going out to eat, treat yourself to fine dining, but then cut back on what you are spending on your clothes or your car.
“That’s how you become a conscious spender,” Sethi said.
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This article originally appeared on GOBankingRates.com: 4 Ideas That Will Change How You View Wealth, According to Ramit Sethi
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