Thursday, April 12, 2018

Hacking your own Millionaire Mindset.

I think that we may have gone too far telling everyone what a Millionaire Mindset is not. The Millionaire Mindset is not about affirmations. Generating wealth is also not about sharing the quotable quotes of billionaires - although running a business selling motivational posters might actually work.

Now it's time for me to propose a generalized procedure for someone to develop a genuine Millionaire Mindset that puts him within a reasonable striking distance of landing a million bucks. Now in order for this to work, you need to read a lot. If you cannot accept this rule, then my approach will not work for you.

I propose that the Millionaire Mindset is hidden behind three books.

1. The Millionaire Next Door by Thomas Stanley



Nothing cuts through all that motivational crap like hardcore academic research. The Millionaire Next Door is a little dated by now but it shows some of the common traits and habit of everyday millionaires from the perspective of a sociologist. This is where most of the fundamental ideas of frugal living and avoiding flashy consumption come from.

I consider this the first book to read to develop this Mindset.

2. Your Money or Your Life by Vicki Robin



I read the earlier version of this book which was co-authored with Joe Dominguez. It's not an easy read but it's a textbook on FIRE and may contain humanity's first attempt to characterize financial independence as a cross-over point between basic expenses and investment income.

This is a crucial second book because financial independence is the bridge between survival and attaining millionaire status. It's like castling in a chess game to build up a defensive position early so that you can checkmate your opponent later.

Achieving financial independence allows you to farm your entire income into your portfolio allowing millionaire status to be achieved a short while later.

3. Seeking Wisdom : From Darwin to Munger by Peter Bevelin



The final book in this series is really about mindsets. I think that there is a certain way to think that makes you a better investor, worker or entrepreneur.

I'm in the middle of this book and most bloggers have not featured this book yet because it is quite unique as it unifies some key ideas in  Evolutionary Psychology, Behavioral Finance and some of Munger's ideas on Mental Models into a very interesting read. I think this book should supplant Thinking Fast, Thinking slow by Daniel Kahneman and Amos Tversky in a financial blogger's bookshelf because it much more accessible to lay persons.

Of course, developing a Millionaire Mindset may not make you a millionaire immediately.

But this is certainly a better alternative than the wishful thinking recommended by the folks who wrote The Secret.

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