Another step to your successful financial overhaul is also very simple: almost always do the opposite of everyone else. Although this is a very simple concept, it is still very difficult for most people to carry out. Many people are fearful and skeptical of doing almost exactly the opposite of what everyone else is doing. This fear comes from the “leaving the herd” mentality. It seems like it’s always safer to follow the heard. However, doing the opposite of the majority is absolutely critical for your financial growth. It’s also, ironically, a much “safer” approach to finances.
Have you ever heard of the American-Indian buffalo hunting story where the Indians herd the buffalo over the cliff? When you are in the “herd” mentality, you have little or no control of where your financial life is headed. When financial struggles hit, you will have no where to go except for off the cliff with everyone else.
A good example of this was the mortgage crisis that exploded at the end of 2008. The trend of the 2000’s was to acquire 100% financing with adjustable-rate mortgages when buying a house. It appeared to be a completely acceptable financial decision: everyone was doing it.
Then, the market crashed. The adjustable rate, 100% mortgage backfired with a vengeance. Real estate values decreased. Because nobody put money down, the properties where immediately “underwater” with negative equity. Foreclosure and bankruptcy became increasing popular. The financial “herd” literal fell over the cliff by the thousands nationally.
The road to financial success is more rarely traveled: there will be few people on the road with you. Just because 99 out of 100 people are not with you stay confident. You are exactly on the right road to a better financial future. This road will not lead you headlong over the cliff of financial failure: it will lead you to a better financial life.
What is the opposite of what almost everyone else is doing? It’s simple: save all of your money for investment. This will allow you to make more money from your new investments. The cycle never ends: live under your means and invest. With the investments, you have even more money to invest. The second part is also very simple: invest in your financial knowledge and understanding to make even more money in the future for investments.
The “herd” mentality is to progressively spend all money that you make on living expenses. Houses, cars, and toys come in all sizes and price tags. Most people immediately spend any new income on a “better” version of these things instead of investing. The “herd” mentality is too progressive increase the household expenses budget.
What is the “opposite” goal? How about living on 10% of your income and using 90% of your income for investments and financial education? How soon would you be financially successful if you were willing to make such a commitment? How do you know if such a goal is impossible before you try to achieve it? Is the goal impossible or are you simply unwilling to do it? This may be an extreme example, but it is exactly the way that many financially successful people live their lives. Soon the financial pie grows until your “10%” becomes much larger than other people “100%” of their income.
As a specific example, what if you decided that you would live with family or purchase a multi-unit apartment building to eliminate most of your living expenses? What if you negotiated a work-housing deal? Then, what if you used your money do acquire businesses and real estate assets that pay you passive income each month? What if you used the time also to save money for a paid-in-full house? Your net worth and financial knowledge would grow quickly.
What if every other weekend you attend an internet marketing seminar? What if you attended real estate workshops? What if you went to national conferences for the business in which you are interested? How soon would you be a successful leader in your industry?
You would be doing the exact opposite of everybody else, and, consequently, you would be on the road to being financial successful. Your financial overhaul would be very real and complete. After you gained such knowledge, you would likely never return to your old ways.
Most people dread the loss of perceived “comfort.” Most people are afraid to do the opposite of what everyone else is doing. These feelings are usually very inaccurate and misleading. In reality, doing the financial opposite of what everyone else is doing can be an exciting new life change. It will bring great rewards and new excitement that the “herd” mentality can never deliver.