To become rich, you first have to think like a rich person. Forming the right mentality is the root of all wealth. Here are ten ways that will help you adopt the attitude of a rich person:
1. Buy assets, not liabilities
This is a very basic lesson on getting rich. Assets add value to your portfolio while liabilities reduce your portfolio. Now how can you decide if something that you want to acquire is an asset or a liability? Let’s discuss the information that might help you make a good decision regarding assets and liabilities.
To start with, would you consider your house an asset? Some would say yes, definitely. Some would say no. If we are going to stick with how asset is defined, a house will not be considered an asset if you are still paying for its mortgage. That means it’s taking out money from your pocket and not putting money into it. If you rent out this house to others, in order for it to be considered an asset, the rent that the tenants pay should be higher than the monthly mortgage so that some of the rent gets into your pocket. Same thing goes for cars. You acquire the car for a specific amount, the value deteriorates and you still need to spend money on maintaining it.
The only investment that can be considered an asset would be properties that pay for itself and more, royalties and stock dividends, as well as businesses that are self-sufficient. The rest are already considered liabilities. This is where common people make mistakes, they mistake some liabilities as assets and then they are burdened with it, without getting the return they expect from it. If your goal is to get rich, keep away from these liabilities and invest more in passive income that is considered an asset. Keep this in mind and you will be on the right road to richness.