(The following is an abbreviated transcription from a video Linda & I. Please excuse any typos or errors.)
Do you think like a poor person? I found this article on medium.com that states, “if you want to be rich, you need to stop thinking like a poor person.”
I read through it, and I don’t think it’s written by a fellow believer, but there’s a lot of really good points made. And, there are things that I think are important to talk about.
I sat down with Linda to discuss this article and the points that are made. And she brought up a good point herself “How do I not think like a poor person? I just think the way I think. Right?”
Well, and that’s exactly what we’re going to talk about. That’s the whole point.
We recorded our discussion that you can listen to on our Podcast, or you read the full transcription below:
Struggling With The Poverty Mindset
Bob: I, think you probably did too. I’m curious, but I used to really struggle with the poverty mindset and just feeling I dunno, just defeatist beliefs about myself and that I wasn’t good enough in that I can never really amount to anything. I was always just doomed to be average and mediocre.
And that was my life as a whole, but that bled into my beliefs about money and my beliefs about earning income. And…
Linda: Yeah that’s what I was thinking is I feel like it’s not just one thing that you’re thinking about there. It’s like this whole, well, I can never get that job because I’m not good enough with this, or I’m not smart enough with this or whatever.
And so it, it perpetuates this whole lifestyle instead of it just being about one thing, which is maybe just the idea in my head. Well, I just can’t afford that right now. It’s not that it’s the kind of the belief that, my life isn’t really going anywhere. My glory days are behind me. Right? And we’ve seen a lot of people with this mentality. Uncle Rico is a classic yeah example.
Bob: From Napoleon Dynamite, if you don’t recall.
Linda: Right. I mean, is that’s kind of what we’re talking about, right?
Limiting Beliefs When It Comes To Investing Money
Bob: I think so. I mean, one of the reasons I want to talk about this in the podcast is because, so we just launched our investing course last month. And I was emailing with a lot of different people talking to me about investing and it was fascinating how many people had these limiting beliefs and mindsets.
Oh, I can never invest that. It’s just for really smart people. That’s just for rich and wealthy people. That’s for everyone that’s for these other people but not me. I can’t do that. And, just these really limiting beliefs, I was noticing a good number of readers and listeners who were emailing.
And I had to think back because God has done such a work in my heart and in my mind and reworked a lot of things in me that I didn’t realize how far I’ve come from, where I was, because I was so bound up with so much of this stuff.
And over the years He’s just made these little incremental changes in my heart and understanding and belief. Now I look back and I’m like, oh man, I used to think like that, but now I see the world so much differently now.
And so anyway, so I want to attempt to start talking about some of these things on the podcast that’s, which is why we’re talking about this now.
Linda: Yeah. And I think this is one of the things that you’re really good at is making things that seems super complicated, and like they’re only for smart people, and just bringing it down onto the level where everybody can understand it. And you actually don’t have to be as smart as you think you do.
I mean, if you want to take it to the extreme, obviously you’d probably need a little bit more education, but it’s not as difficult as maybe we’ve thought in the past, right?
Bob: Yeah, just money in general. There’s so many people who just feel like, I can never get ahead financially. Because my parents were like this, and this is just the way it’s always been.
And therefore it always has to be this way. Or, I’ve always been in debt and therefore I’m always going to be in debt and these limiting beliefs.
Your Beliefs Shape Your World
Proverbs 23:7 says “as a man thinks in his heart, so is he.” There’s something about the beliefs that we have that shape our world.
And I think a lot of the church has shied away from talking about this because they feel like it’s new age-y and they feel like this is too much. Name it and claim it and control your destiny by your words. But, there’s something here and we talked about this in other podcasts.
The First Use Of Language In The Bible
One of the most fascinating revelations I ever had was that the first use of language in the Bible, wasn’t to communicate. So we’re communicating right now.
I’m using words to communicate to you, but that’s not what it was used for first. God used it to create. And that is so fascinating to me. And there’s something there, there’s something there.
Redirecting Our Thinking
Dr. Caroline Leaf, which I love her, she has this quote that’s really good. She says, “as we think we changed the physical nature of our brain. As we consciously direct our thinking, we can wire out toxic patterns of thinking and replace them with healthy thoughts.” And so there’s something that is changing in our brains. Physically as we think. And so we have the opportunity to change how you know, and there’s so many scriptures that talk about this.
There’s so many things that Jesus was saying about this as well. Like there’s something here about redirecting our thoughts from thoughts of failure and defeat and not who God made us to be, but realigning them with who God made us and created us to be. And it’s just really important, especially when it comes to our money.
Linda: Yeah, we’re taking this a completely different direction than I think we originally thought.
Bob: Just going with it.
Abiding In God
Linda: Yeah. So our pastor, not this, not yesterday, but the, week before the previous Sunday, she gave this message and it was based out of John 15. And it was that little section of scripture where it talks about abiding. “Abide in me and my words will abide in you… Cause the fruit does not, or a branch, does not bear fruit unless it’s abiding in the vine.” And it says abiding over and over again. It says it 11 times in there. And so she based her whole message off of this idea of what does it mean to be abiding in Him? And she asked this question.
And she said, “in what areas of your life are you doing but not abiding?” So, in other words, in what areas are you just trying to make it happen with your own smarts, with your own ability, with your own time, effort, all of that stuff. But you’re not actually you’re not fitting God into any of that, basically.
Bob: Yeah.
Linda: And it’s all just about me and how much I can get done and how smart am I and whatever, instead of Lord, what is the plan that you have for this idea? And literally today, I just sat down and I wrote a bunch of areas of my life, where I’m like, this is where I’m doing and I’m not abiding and challenging myself.
And I think that this is a great one to do that in the area of finance or in the area of just how we think about money, how are we thinking about ourselves in whatever situation. And is there room for God in there? Have we left Him out? And yeah, it’s super challenging to me. I honestly can not get that word, those words out of my head.
Bob: Yeah. All right. So I want to talk through four different things from this article, just because I think are good talking points to chat about that line up here. This is practical stuff that you can do.
1. Pay Yourself First
Bob: And so one of the first things in the article they mentioned is paying yourself first.
Now my approach to this is a little different, I don’t believe we should pay our self first. I think we should give first. I think that is the thing, there’s something about the first fruits in which we’ll go into that in another podcast. But yeah, there’s something about planting that seed, giving first, making that the priority.
As the the first thing we should do second on the list should be paying ourselves. And then after that we live on the rest.
The 10/10/80 Plan
So a lot of circles talk about, a lot of Christian circles, in which I really like. This 10/10/80 plan in terms of breaking down your income into these categories.
So 10% give 10% save and then 80% live off of that. And so I mean the teachers and children’s school. That’s a whole, that’s the thing about this it’s so amazing. Like you can take all the lessons learned in Sunday school, and if you actually just did them for the rest of your life, you’d have an amazing life.
It’s really so simple. So many things are so simple, but we just over-complicate it. Or we dismiss it because it’s simple. And that’s really like so much of this stuff are things that you can learn as a five-year-old, which is great. That’s what I love about The Gospel. That’s what I love about the way Jesus communicated. Is that it doesn’t have to be a super complicated stuff, but when we make a habit of paying ourselves first. This is something that wealthy people know to do. And this is something that people who find themselves in a recurring lack of or a recurring pattern of having lack.
This was the thing, this was what I was doing all the time. I’m not paying myself first, like everything was robbing Peter to pay Paul. And I found myself in this vicious cycle in the way that I broke out of that in a very practical level.
One of the first things I did was this, how can I make a sacrifice now, when it’s really inconvenient because I’m so broke and in debt up to my eyeballs. But how can I make a little sacrifice now that I know is going to benefit me years down the road?
Linda: Well, there’s such wisdom in this tiny little thing of just, it’s just 10%. Going to hopefully savings and giving, right?
It’s just this, tiny fraction that you can take and do something else with and how it actually is a domino effect for the other things in your life. So I feel like if you’re paying attention to how much you are saving and giving, if you’re taking a percentage out and you’re not spending a hundred percent of it, all of a sudden you’re a little bit more careful with what you have left.
And I think it’s the same with working out when you work out, you’re just a little bit more careful with what you eat. Maybe you’re not wildly trained to change your diet. Maybe you are, but a lot of times, if you just start working out, you’re I just worked out, do I really want to eat?
Do I want to put that junk back in my body that I just worked to get out? Or could I help myself along a little bit? I mean, it’s just, it just poses the question I think.
Bob: Yeah. It gives you fuel and momentum to move forward.
Linda: Yeah. So I think this is such a wise thing. That again, seems so simple and just like, well, everybody’s been telling me to do that.
Well, I think the question is, are you actually doing it or did you dismiss it? Because it seemed too simple.
2. It’s Not About How Much You Earn, But How Much You Keep
Bob: Number two on his list is it’s not about how much you earn, but it’s about how much you keep. And again, like all, every, all the points that we’re talking about here are really common sense.
Linda: So when you say “keep,” what does that mean?
Bob: Save, not spend. I think we’ll say it that way. But yeah, it’s another thing that’s like, oh yeah I think we know this. We all know this, but are we allowing this to affect our life? Do we really understand it? Are we allowing this to affect our mindset and our belief about money?
So for example, you have two different people. One who earns a $100,000 a year and another one earns a million dollars a year. But if they both spend a hundred percent of what they earn 10 years from now, 40 years from now, they have the same amount of money. It doesn’t matter. And when you could have this person who is earning a hundred thousand dollars a year, but living off of 80 and then giving and saving $20,000, or let’s just take 10% and say he’s giving 10% of that.
And then again, that other person with a million dollars a year who spending all of it, 40 years down the road, the guy with a million has zero. It’s easy to see this from that perspective, but it’s just hard for us to put it into action and to take action on it. But that’s the key, that’s the key is believing and understanding it and taking action on it.
Linda: Right.
Bob: You know what I mean? Cause this is one of those things that people with a poverty mindset (regardless of how much they’re making, whether it’s $10,000, a $100,000 or a million a year), If you don’t believe that anything is ever going to come out of it and you’re ever going to be able to have any substantial savings or pay off debt, like you’re going to behave that way.
And so you’re just creating this cycle that you’re making it harder for yourself to break out of.
Linda: But if you notice that there is, there’s a tiny bit of it, even though it seems like a tiny bit of a change, there is still a change. And a tiny bit over a long period of time ends up being a whole lot of change. Right?
Bob: Yeah.
A Modest Salary With A Multi-Million Dollar Net Worth
Bob: This is fascinating. I recently wrote about this guy named Ronald Reed. And I was blown away. Ronald was a lifetime janitor. Has spent his entire career as a janitor and a gas station attendant, two jobs. I don’t know what his salary was, but I’m sure it wasn’t a $100,000 a year. And he ends up dying when he’s, 90 years old or something. Come to find out, he had like an eight something million dollar net worth and he had accumulated all this money on a presumably pretty low salary.
Linda: A modest salary if nothing else.
Bob: The way that he did it, it’s so amazing is, it doesn’t matter what your income is. And that’s the whole point here of this point that we’re making, is what are you going to do with the amount you have?
The Parable Of The Talents
And this comes back and you take this back to The Parable of the Talents. We are responsible. We are managers for what God has entrusted us with.
So this can be anything in our life. This can be our time, or our kids, or our spouse, but it’s also our money. And so we are responsible for managing that. And what are we going to do with it? And just like in the Parable of the Talents, the ones who managed what they were entrusted with well, they found themselves given more to manage.
That’s what I want to be when I grow up. I want to be a manager who can be trusted with whatever has been handed over to us. And God knows that we’re going to do the best that we possibly can with it. I want to be someone who is worthy of being trusted with it.
Linda: Yup. Me too.
3. Invest Early, Invest Often
Bob: Okay. All right number three on this list was invest early and invest often.
Linda: This is one of the things that I’ve learned from you that you really don’t have to have a lot of money to invest. I think this was something I always thought that I had to have a bunch of money to invest.
I was working a maybe slightly above minimum wage job when we first got married and I remember they were like, do you want to contribute to a 401k or whatever? And in my head, I was like I don’t understand what that means. And don’t, I have to have a lot of money to do that, but there’s a bunch of ways to invest without actually having to have a ton of money.
Investing Has Changed Over The Decades
Bob: Yeah. Everything has changed in the last couple of decades, so you go back a few decades and it’s like, yeah. It’s like pretty much only the wealthy people or, it was mostly the wealthy people were investing. But, everything has changed with technology to where any of us can start investing.
Even with a hundred dollars or less, and the opportunity is available to all of us. And so, yeah, if you want to go invest with a financial advisor those types of situations, oftentimes advisors you’ll want you to have a significant amount of money to invest with them.
Not always, but that’s fairly common. But if you want to do it yourself, there’s a lot of ways to invest. Still very safe and do it in a way where you don’t need tons of money. It’s just a different world. It’s a completely different world. And I don’t think, I think a lot of people just haven’t realized that yet.
Investing In Real Estate
Linda: Well, and what’s that thing with the investing in real estate.
Bob: Yeah, Fundrise, we’ve done an article and video about Fundrise. That was one thing we have reviewed.
Linda: What’s the lowest amount you can…
Bob: I think that one’s $500. And so you can invest in real estate for as little as $500. And we’ve been doing that three or four years.
Linda: Which is way better than a hundred thousand or two hundred thousand or whatever.
Bob: Oh yeah. You don’t have to buy a house and it’s like a hundred percent passive, which is one of the things I like about it a lot. And yeah, and that’s been returning, I just calculated a returns on that for the last four years or something. And I want to say it’s like eight and a half, 9% or something in which, yeah, that’s great. I’m tickled pink with that.
And that was actually on the more conservative option. They have three different options in terms of how they invest for you, and that’s the more conservative one. And so I actually increased that to the higher, the slightly more aggressive one. And I’m going to see how things go over the next few years, but anyway, so that’s one option.
Investing With Little Money
There’s a whole bunch of different options. We did another video about an app called Acorns, which I really like as well. You can start with a dollar on that it’s so simple.
Linda: And that’s really for someone who doesn’t want to really be involved at all.
Bob: Yeah. A hundred percent hands off, super, super simple. So yeah, you can check out the Seedtime Money YouTube channel, and search for either the terms “Acorns and Seedtime” or “Fundrise and Seedtime.” Then you can watch our videos on both of them.
Savings Account Rates And Spending Power
But here’s the thing. Right now, savings account rates are so terrible that you’re losing money if you have money in a savings account. Now, if your dollar is buried in your backyard or in your mattress, it’s the same thing. And the reason is, because it’s not like the actual money is disappearing, but the, spending power of that money is disappearing with inflation.
So that a hundred dollars do you have in your savings account every year it becomes less valuable. It’s not going to buy as much stuff over each year that passes and as inflation has been increasing a lot lately it’s just eroding your spending power money that you have in savings.
Linda: Right.
Bob: So if you go back to the early eighties or something, we had savings account rates that were over 10% maybe even 15% in some cases like just crazy high. That’s a different world. Like if you can get savings rates like that.
It’s like, by all means, that’s great. But right now, if you want to not have all your money eroded away, right? You need to be invested in something like that’s how you’re going to beat the pace of inflation.
Linda: Okay.
Bob: So this is just one quick example here I have sitting in front of me here. If you, right now savings account rates are about 0.1%.
On average, you might be able to find some better ones, even half a percentage, but that’s pretty much as good as it’s going to get right now. And so if you have initial investment of $1,200 right now, so let’s say you have $1,200 in your savings account. Okay. At 0.1% 40 years from now, that is going to be worth $50,000.
Great, right? But if it’s in the stock market, Assuming that in 9% return, it’s not gonna be $50,000. It’s gonna be $479,000. So you’re literally talking, almost…
Linda: Are you sold yet?
Bob: Almost 10 times as much by having it invested in the stock market than just sitting in a savings account like that.
Linda: And that’s what the $1,200.
Bob: And so I need to add one other piece. So this is with an additional deposit of $100 per month for the next 40 years. I forgot to add that part. That’s important piece, but point is the numbers still remains. You’re going to have about 10 times as much if you’re investing in stock market, assuming 9% return over that time versus a savings account.
Linda: Wow.
Bob: So it’s just…
Linda: Night and day difference.
Bob: Yeah, and that’s a whole nother thing we can get into more. We’ll talk more about that as we go forward.
4. Know What You Own: Assets Vs. Liabilities
Bob: Let’s talk about the fourth point. So know what you own. Which is the difference between assets and liabilities. And I’ve talked about this multiple times in the past, but this is from Robert Kiyosaki and his book, “Rich Dad, Poor Dad,” first money book I ever read probably nearly 20 years ago now.
And this was the thing that stuck out to me most, I’m gonna read you this one quote from the book, and this is the thing that revolutionized how I think about money. And it seems like not that big of a deal, but like let this sink in. He said,
“Rich people acquire assets, the poor, and middle-class acquire liabilities that they think are assets. An asset is something that puts money in my pocket. A liability takes money out of my pocket.”
And so as I began to think about this…
Linda: I would love to hear an example of what we think is an asset, but it’s actually a liability.
Bob: Well, one of the things he specifically mentioned is your house so typically middle-class people believe their house is an asset and yes if you’re, calculating your net worth your assets under management, as we like to call it, yeah, you will put that in the assets column, but Kiyosaki argues that I don’t want to call anything an asset unless it’s actually bringing money to me.
So he would say that a rental property that is yielding me positive cashflow each month, as in it’s yielded me a hundred dollars or $200 positive cash flow each month. That is putting money in my pocket.
Linda: So he’s taking it more to the extreme.
Bob: He is.
Linda: Okay.
Bob: Yeah, but that’s, but my point is, that’s how the wealthy think.
Linda: Right. And they’re thinking about what can put money in my pocket rather than what do I want?
Is A House Or A Car An Asset?
Bob: Yeah. And so, I think that whether or not a house is an asset or not (pay off your mortgage, see how we did!), hat’s not as big of a concern. The bigger issue is the fact that so many of us will spend $50,000 on a car that is going to completely the opposite of an asset.
Linda: Right.
Bob: There’s just going to go down in value to next to nothing over the next 10 years.
Linda: And it’s something you can use. But…
Bob: It’s something that you can use, but you can also buy a car for $5,000. You know what I mean?
Linda: Or anywhere in between, honestly.
Bob: Yeah but the point is on understanding what is an asset. What is the thing that is going to build your wealth and what is the things, or what are the things that are going to take away from that?
And that’s the big takeaway. That’s the aha that I had that made me think about car buying differently ever since. And it doesn’t mean that we’ll never have a nice car in that. We’ll always just drive hunk of junk beaters, but…
Linda: You know Bob wants that Tesla.
Bob: But it does mean that I’m going to think long and hard about any car purchases that I make.
Linda: Okay, well, this is one of the, I mean, this is interesting. This is a perfect example is like, you’ve talked about the Tesla and they’re coming out with self-driving capabilities and you’re like, so you can basically rent out your car or you can farm out your car for Uber or whatever.
And your car can drive itself around and you can be making money while you’re sitting at home on the couch, it’s out making you money.
Which would be a real liability according to Robert Kiyosaki. Right?
Bob: No not really.
Linda: Not, a liability an asset, I mean.
Bob: Yeah. Yeah, no. So for anybody…
Linda: This is how Bob thinks. These are the conversations we have all the time. I’m not even kidding.
Bob: So yeah, I came to you and I told you, so Elon came out and this was probably a couple of years ago now and basically said, once all of these all of his Teslas are fully autonomous and can drive by themselves. He’s like, they’re going to create an Uber competitor where yeah, like your car, like Nightrider, will go drive around and pick people up and take them places. And then when it’s done, it’ll come back to your garage and just park itself. And your car will just be making you money.
Linda: And Bob was like I think we could get a Tesla.
Bob: I mean, so that is really exciting to think about. And yeah, like that changes the game because yeah. I’ll spend $80,000 on a car. If it’s going to pay for itself and you continue to make our money. Cause like their new batteries are supposed to go like a million miles or something like, um.
Linda: Can you imagine having your car for a million miles. How long do you think it would take society to get over, like having your car past a hundred or 200,000 miles. If they make a battery, that’s able to go a million miles.
Bob: I have no idea. I don’t know. It’s going to take a long time, all that stuff takes a long time. People still like this is something I wrote about in the book. There so many people who just still, like, as soon as a car hits a hundred thousand miles, it’s like, I got to sell it.
I got to sell it. It’s like, yeah, maybe you did in the seventies and eighties even. But like now, like that’s just not the way it works. Like so many cars are proven to go so much past that we drove our Honda Fit, we drove that 157,000 miles without an issue. And then we sold it to some guy and I’ll bet he’s still driving that thing around.
And that was with a lawnmower engine in it. Like that thing. Our Honda Pilot, we drove 200, that was over 250,000 miles, our Honda Pilot. And the only reason we got rid of is because we needed a minivan. Like I still would be driving that car. I love that car.
Linda: I think it’s possible. We might’ve even kept it. The air conditioner did break.
Bob: Yeah.
Linda: But the engine, was fine. We talked about replacing anyway.
Bob: So the point is that it’s a different era and we’re not stuck in this thing where you have to get rid of a car at a hundred thousand miles.
Linda: That’s true.
Shifting Our Mindset Begins With Prayer
Bob: So these are some of the points here that we wanted to get across and yeah, I took the scenic route a little bit, but point is we’re going to start talking a little bit about mindset and how we can start shifting and improving our mindset. And I think it begins with prayer. I think it begins with talking to God and opening up and allowing Him to change our beliefs.
Linda: Right? Cause we don’t all have the same wrong beliefs either. You know what I mean?
Bob: Because there’s no limit to all the different, wrong beliefs. And it’s all based on things that happened to us and what we dealt with and what our experiences were with this person or debt, so it’s different for all of us.
And that’s why it has to be a, let’s go to God and talk to Him about this and identify what are those things right?
Linda: Yeah. And then I think the other step there is like actually allowing Him to change them for you being open to the change of like, yeah. I never thought about it that way. And I don’t even know if I can get there, like the car thing of like, once you drive it over a hundred thousand miles, it’s gonna, the whole, thing’s gonna blow up on you.
It’s like, that is a belief that it takes a while to like change it. But yeah, I mean, that’s, what’s so great about the power of God and this Caroline Leaf, this doctor. What is she a neuroscientist? When she talks about this. She’s like the way we change these patterns in our brain is by renewing our mind with The Word of God.
And yeah I, just think that is awesome, that we can always change. We can always get better and we never have to stop until we get to heaven. And then of course the veil will be lifted and. It’ll be awesome in heaven.
Bob: It’ll be awesome.
All right. Well that’s all for today. So yeah, if this was helpful for you, share with a friend we always appreciate that.
Have a great day.
