Perhaps you’ve heard this said before…
“In order to be rich, you have to live below your means.”
Living below your means is the idea that you should not spend more money than you bring in each month. It is the kissing cousin of the scams, “Get out of debt” and “Save money.”
As the thinking goes by so-called experts, the reason why many people are poor is because they cannot control their spending. As soon as they get their paycheck, they go on a shopping spree, spending it all on things like clothes, cars, and more.
The only way to stop this cycle of financial destruction, according to them, is by living below your means.
On the surface, it makes sense. You shouldn’t outspend your income on things like liabilities. That’s a core philosophy of Rich Dad as well. But the idea of “live below your means” is a scam. Only poor people live below their means.
The rich don’t live below their means. Rather, they expand their means.
The biggest problem for most people is that the “l can’t afford that, live below your means” mindset closes off a whole world of possibilities financially for them.
“Live below your means,” is a poor mindset because it teaches you to think too narrowly.
Rather than teach you to be creative in making more money, it teaches you to be merciless in what you spend your money on.
In an article I read on a popular site, the author writes…
“Trimming relatively small expenses such as lattes, magazines, and gym membership is a common approach to reducing expenses. But to get rich, you need to learn how to live below your means. To do this, you need to examine your essential living expenses.”
|No one likes finding things you can live without so you can afford something else. It’s awful. |
And I can tell you with certainty that rich people I know, the ones who are very rich and continue to get richer, don’t worry about living below their means. Rather they take all that mental energy it takes to cut expenses and they look at how to expand their means instead.
When my wife and I want to splurge on something, we don’t look at where to cut costs.
Instead, we acquire an asset to offset the cost of what we want. So, instead of always looking for what we can cut to afford something, we’re always looking to expand our means to cover the cost of what we want.
It’s a completely different mindset, given to me by my rich dad.
If you live below your means, you can never add assets, so you’ll never break the chain of cutting costs and budgeting to afford something. Instead, you’ll be stuck hoping your income will increase courtesy of your employer.
The good news is that you can start today.
Anyone can begin to shift from a live-below-your-means mindset to an expand-your-means one. If you want to think like rich dad instead of poor dad, simply begin by asking, “How can I afford that?” rather than saying, “I can’t afford that.”
In the process, you’ll go from a poor mindset to a rich one—and you’ll also break out of the pattern set by the Rich Dad scam “Live Below Your Means.”