I gave you a look at economic life and what it means to you in Part. 1. Now I want to tell you how the average Joe and Jane look at their financial lives.
I figured that most people don’t want money per se. They just want the things money can buy them. There is a big difference.
If I want to travel to St. Tropez this fall and I figured out that it will cost $3000 to bring my family along. Internally, I really don’t want $3000, I want the trip. So the average Jane will perhaps find a way to go on the trip. Most of the time a person will just charge the trip on a credit card (if they have the available credit). Once that happens, the family is now excited and anticipating the lovely vacation to come.
It was charge and will be paid back in monthly payments, so the family thought short term.
The point I’m making is that most of us don’t want to be rich we just want the things money can bring. Credit can bring all of these things. Vacations, Homes, after school activities, paid medical bills and so on.
So in turn we don’t want cash, we just want to fulfill our wants. The consequence is more debt to pay off. This is why most of us are in debt. We simply just wanted too much too fast. This in turn makes us feel rich because we have all the things that most rich people have. To be really rich is having the things you love but paid for.
My family take trips, pay for after-school care, donate to charity, have exquisite meals out all with cash. Our mentality is different from the average Joe and Jane. We want to be cash rich first before we buy things. Flip your mentality.
The next time you have to make a decision to buy something that is not a need, have the cash cushion instead of grabbing the credit cards. Decide to be rich!
pic credit: amexopenforum
