Jordan Rosenfeld
·4 min read
If there was an overnight and easy way to become wealthy, everyone already would be rich. While magic answers don’t exist, building wealth might actually be as simple as abandoning three toxic money mindsets, according to Ramit Sethi, host of Netflix’s “How To Get Rich” and the “I Will Teach You To Be Rich Podcast.”
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In a post on LinkedIn, Sethi explained that in order to build wealth you must get out of your own way by not doing the following.
Also see five money mistakes you should stop making, according to Sethi.
Not Talking About Money
If you think you’re avoiding conflict by not discussing money with your partner, housemates or other family members, Sethi discouraged this thinking, stating, “How can you expect to get ahead if you’re not actually talking about money — whether solo or with a partner?”
He suggested that money should be a regular topic on the path to financial success, not something you just happen to talk about when you’re frustrated.
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Indeed, Wendy Wright, a financial therapist and marriage therapist, told CNBC that if money hasn’t yet come up in conversation with your partner, you should start by picking a couple of topics to discuss. Don’t try to discuss every possible finance-related issue at once though; talking about money should be an ongoing discussion, Wright said.
In fact, Wright suggested you set specific times to talk about money, so it doesn’t end up coming up in a way that leads to conflict or feel like a sneak attack on your partner or family member.
Contrary to how scary or awkward it can feel to bring up money as a conversation point, “Talking about money is positive!” Sethi said.
Not Questioning Your Childhood Values About Money
So much of what we know, feel and do as it relates to money stems from how we were raised to feel and think about it in our childhoods, Sethi said, which he referred to as running on “invisible scripts.”
On his podcast, he often asks people what they remember their family saying about money when they were growing up. “We can’t afford it” was a common refrain.
These early attitudes can get in deeply to your subconscious. He said this has ripple effects later in life. Even if you have a good job and are investing money, you might find yourself holding onto feelings of guilt over small purchases.
“Most people never make the connection that they have this belief,” Sethi said.
People may have any number of limiting money beliefs, such as:
Money avoidance: You think money is essentially bad and that having it leads to greed
Money worship: You think money will solve all your problems
Money vigilance: You go beyond frugality into anxiety around spending
Money status seeking: Your self-worth gets wrapped up in how much you make.
Each of these attitudes can drive a different set of behaviors that may hold you back.
Sethi recommends that you write down your money beliefs, acknowledge them, interrogate them and decide, “What scripts do I want to follow or create for the next phase of my life?”
Additionally, if you have children, start talking to them about money and good financial habits early so they can start out with better values around finances and make good decisions.
Believing That Investing Is Only for the Already Wealthy
If you’re waiting to invest when you somehow figure out how to become wealthy, Sethi suggested you’ve got it backwards, writing, “The way you get wealthy is BY investing!”
He said even people with entry-level income can invest $20 per month to get started. So passionate is he about investing that he said, “You can often change your entire socioeconomic trajectory for yourself and your family by automatic investing.”
On average, he said, it could take as little as one day to set up your automatic investments, and that single day’s efforts may have an ongoing return for the next 20 or more years.
He said you have to stop thinking of money creation as instantaneous. “Real wealth creation takes time. It’s boring. It’s methodical.”
If it’s not yet second nature to put a lot of time into investing, he suggested you think of other tasks you’ve committed to in your life, from fitness to learning a new language, and translate that same degree of daily effort into wealth creation.
“Just get a little bit better everyday,” he wrote. “That’s what wealth creation is about.”
Investing doesn’t have to be intimidating or complicated either. You can start small — and start immediately. The sooner you get started, the better. Follow expert advice and don’t try to make big moves when small ones will suffice.
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This article originally appeared on GOBankingRates.com: Ramit Sethi: These 3 ‘Toxic Money Mindsets’ Won’t Help You Build Wealth
