Like most things in life, there is more than one way to look at something. When it comes to money, there are two predominant ways: scarcity thinking and abundance thinking.
The financial industry has been built around marketing scarcity thinking to people. Financial advisors make huge commissions convincing the masses to live below their means, work hard, clip coupons, and put as much as they can in mutual funds, stocks and ETFs.
Then, when retired, these same people are to nibble away at their savings with the thought that they will die before the money runs out.
This plan may be fine for some, but it certainly isn’t going to get you the life you dream of. I don’t know about you, but I want to enjoy my 50’s and 60’s traveling and helping others rather than stretching every dollar so I don’t starve to death.
When there is a market correction and the economic uncertainty, high taxes, slow stock returns and rising inflation make their way to the headlines, the scarcity thinkers start feeling the pinch. They delay retirement, take up a part time job to make ends meet, and downgrade their home. They have been sold that this is the only option for dealing with a recession. Unfortunately, these people are focused only on income instead of getting their money to work for them.
The wealthiest people in the world think in abundance. They seek to expand their money and wealth beyond just surviving and instead are looking to create a legacy for their children and family. They know that cashflow is king and so is growth. So they are always working on creating multiple streams of income, like by investing in companies and real estate that throw off money quarter over quarter. These income streams allow them to enjoy the finer things in life, travel, and contribute to their favorite causes without affecting their net worth because all these great things come from their cashflow.
These people are not scrimping and saving. They are not trying to figure out how to outlive their nest egg. The great thing is that you don’t have to either. You are able to increase your net worth, improve your cashflow, and build a legacy for your family.
For a long time, multifamily real estate investing was a tool used by the super wealthy. Most of the wealthiest people have either made or put their wealth in real estate. I’m not talking about a Real Estate Investment Trust. I’m talking about actual commercial multifamily buildings that have been around for decades and have produced income every month for generations.
The way you get into these deals is to invest into a syndication. Right now, CEOs, doctors, lawyers, mid-level manager and home entrepreneurs can take advantage of all the benefits investing in real estate provides all without becoming a landlord or putting their name on a large business loan. They get all the tax breaks, depreciation and pride of ownership as well.
Anyway, that’s the difference between scarcity and abundance thinking. That is, working for your money versus having your money work for you.
What do you guys think? Are you in abundance mode? Let me know in the comments.