Unless you plan on inheriting riches, building wealth takes time and effort. Having a developed money mindset is key to actually achieving your financial goals.
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Money coach Rachel Covert argues that not having a plan is the worst way to build wealth. In a recent Instagram post Covert makes plain that your mindset is essential, even if you earn a good income.
“Throwing whatever’s left in your savings is the worst way to build wealth as a six-figure earner,” said Covert on Instagram. The money coach isn’t wrong either, as most experts recommend saving at least 15%-20% of your paycheck. Unfortunately, such savings may seem inconceivable to many six-figure earners living paycheck to paycheck.
Covert’s Take on Money Mindset
Covert believes that it comes down to your mindset. “It’s really that money mindset is deeply ingrained in our bodies — so much so that we aren’t even aware of it,” she said. Looking at the habits of self-made millionaires reveals changing that mindset is possible for anyone.
These habits include living frugally, dedication and investing wisely. All are possible to follow, but they do require a principled vision to reach your goals and believing that wealth creation is possible. In essence, building wealth requires viewing each dollar as a tool to build the life you want.
Covert argues not to do this blindly. “It’s like you know that enzymes are happening when you digest food, but not only do you not control it, you simply take it for granted that it’s happening and that it’s a solid truth,” she said. “The difference between a money mindset and digestion is that your money mindset could need some serious work.”
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How to Create a Wise Money Mindset
Creating a wise money mindset is possible but requires introspection and commitment. It necessitates analyzing your spending and aligning it with your short and long-term goals. This may seem scary, but the benefits outweigh any pitfalls. Don’t overlook the role of emotions, as money is an emotional thing for all.
“Whether you like it or not, your beliefs and emotions play a huge role in how money passes through your life,” said Covert.
Essential to this process is not sitting idly by as money comes into your life. Approach your finances actively and use money as a tool; in the long run, you can build real wealth.
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This article originally appeared on GOBankingRates.com: This Is the Worst Way To Build Wealth, According to Money Coach Rachel Covert
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