AS I travel the world and present programmes on personal wealth building, I ask audiences: “How many of you want to be financially independent?”
And 99% to 100% of the hands in the audience go up immediately and smiles and cheers occur.Then I ask: “How many of you are financially independent already?” And immediately the hands go down and a few straggling hands remain.
Then I ask: “What percentage of the world becomes financially independent?" And people shout out anything from 1% to 3%, but actually it’s less than 1%.
Financial independence is where your annual passive investment income exceeds your annual active working income.
Then I ask people: “If I was to give you $10m (more than R100m) and you had that right now, and you also had one minute to write down the 10 things you would do with it if you did immediately received it. What would you do? You have one minute to write the 10 answers.”
Immediately people shuffle to quickly write their 10 answers. When the minute is up I tell them to stop writing and hand their list to the person next to them.
Then I tell them: “Calculate out of the $10m you started with, how much of it remains.”
To everyone’s surprise, most people in one minute have quickly and impulsively spent between R2m and R8m of those R10m. That’s the average.
So what happens is, most of the people – 99% plus - have already spent the money on consumables and depreciables that go down in monetary value. Fancy car, fancy house, fancy trips, fancy lifestyle, fancy clothes, parties, art… and less than 1% have put their money into savings and investments that appreciate in value and make them wealthier.
Less than 1% attempt to turn their $10m into $20m. The great majority of people have a higher value on spending their money on immediately gratifying depreciating consumables than they ever do on long-term investments that appreciate in value.
Fantasies vs wealth building
So, most people fantasise about being wealthy, but they really don’t value wealth building, they value spending. As long as their desire to spend is greater than their desire to save and invest, they will end up like the 99 percenters, not the one percent who become financially wealthy.
That doesn’t mean that they are not wealthy in their own form, according to their own values in other ways; it just means that they are not financially wealthy or independent in the classical terms of money and economics.
Somebody needs to be a consumer for investors to make their money. As long as you have a fantasy that you are going to be financially independent without the true value of wealth building, your will probably live with the ABCDs of negativity surrounding your financial situation.
The ABCDs of negativity include self-anger and aggression, self-blame and feelings of betrayal, self-criticism and challenge and self-deprecation and depression. These ABCDs of negativity are feedback mechanisms to let us know that we are setting goals that don’t match our true values, what we really value.
So if you want to be financially wealthy, and not wealthy in other forms, you will have to have a higher value on wealth building than on just spending and living the lifestyles of the rich and famous, which might make you poor and feed the brands that you fantasise wearing.
If you actually value wealth building and allow it to work for you, and become a master of money instead of its slave, you might just have people pay for your brands in the future.
Instead of you having to pay for everyone else’s to compensate for the ABCDs of negativity.
* Dr John Demartini is a world renowned human behavioural specialist and expert in leadership development.