How to Invest in Yourself to Become Wealthy
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I posed this question to Elena Cardone, wife to Billionaire Grant Cardone and millionaire in her own right:
"How do you differentiate between investing in yourself versus treating yourself."
She had just finished talking about the definitions and etymologies of words like wealth, money, resources, and abundance, and reviewed with us the main points of the classic Cardone wealth creation formula.
One of these points is self-investment.
Elena emphasized that before you have actual passive income flowing of your investments you need to be investing in yourself, not buying luxuries. This is where the question started to formulate in my mind.
Plenty of self-love advocates will tell you that treating yourself—buying that fancy handbag, going to the spa, anything that makes you feel good—is self-care. They speak of this self-care as a necessity if you want to do more than get by in life. They imply that it is a way forward without really backing up that claim with "how" or "why" it can be a way forward.
The Cardones on the other hand present an actual plan for forward progress.
Once I asked my question, Elena dug into the different kinds of purchases she makes. At first it was hard for me to see the difference between her investments and her luxuries, and afterward I took some quiet time to explore why.
I realized that I struggled to differentiate between investments and luxuries because I have never let myself have room for a purchase that is not an investment, and many of the investments I make I have viewed as luxuries.
It's actually been frustrating to friends and family. I never have a satisfying answer when they ask, "How can I treat you?" Even my Starbucks order is based more on what kind of energy I need than on flavor preference.
Because that's what it boils down to: the difference between self-investment and self-indulgence is what happens afterward.
Is getting a massage an investment or a luxury?
Well, will the massage relieve that headache and clear your mind so you can write more effectively and earn more from you affiliate blogging efforts? Then it's an investment. You're going to see a positive return. If on the other hand the massage is simply an excuse to feel boujee, it's a luxury to save for once you have disposable income.
What about a Starbucks drink?
Seems obvious, especially if you listen to the middle-class Dave Ramsey advice of many of our parents' generation: Starbucks is a luxury purchase to cut out of your budget if you want any chance at buying yourself a house, let alone investing in real estate. Make your coffee cheaply at home.
...Unless that drink is actually buying you a seat at a table where you can escape the distractions of home and get deep work done or if it's buying you wifi access while you're traveling and can't be in your usual workspace. Maybe that Starbucks drink is actually an investment.
As usual, the difference between the wealthy and those stuck in scarcity is mindset.
A thoughtful purchase that is meant to bring a return will always be a wise investment and not pure luxury, whether the return is monetary or some other kind of abundance or wealth.
"When people are buying quality... they're buying the future." —Dan Lok
That expensive bag or outfit may be a luxury purchase, or it may be a necessary investment. Chances are you won't land that high-ticket client if you wear a ratty t-shirt to the discovery call. Using your old college backpack at a professional development conference may make you memorable, but probably not for the right reasons.
"Buying the future," as Dan Lok puts it, is not just about choosing something made from better quality materials that will stand the test of time. That's part of it, but there's more.
"Buying the future" is buying your future.
What kind of person do you want to be in the coming years? What kind of future do you want to give your children? Only after you answer those questions can you answer the question of what kinds of purchases will let you buy that future.
So how do you invest in yourself to become wealthy?
- First define wealth. Look up the etymology as well as the dictionary definition.
- Then define it for yourself. This recipe will help.
- Finally, make purchases that enable you to become that wealthy person you have envisioned. Don't just buy luxuries that make you feel like that person, buy the tools and resources that will mold you into that person in actuality.
Three simple steps, but the mindset behind the actions is what will really make the difference.