16 Rich Habits-Your autopilot mode can make you wealthy or poor.

by Darpan Sachdeva

via Tom Corley-Success


Intelligence, talent and charm are great, but more often than not these aren’t what separate the wealthiest among us from the poorest.

Instead, the differences are in our daily habits. Do you realize that these subconscious, second-nature activities make up 40 percent of our waking hours? That means that two out of every five minutes, all day and every day, we operate on autopilot. It’s true: Habits are neural pathways stored in the basal ganglia, a golf ball-size mass of tissue right in the center of our brains, in the limbic system.

This neural fast lane is meant to save the brain energy: When a habit is formed and stored in this region, the parts of the brain involved in deeper decision-making cease to fully participate in the activity. However, we all know there are good habits and bad habits.

I spent years studying the difference between the habits of our country’s rich and poor, questioning hundreds of individuals. On the rich side, these were people with annual gross income north of $160,000 and net liquid assets of $3.2 million or more. I defined the lesser-off as those with gross income of $35,000 or less and no more than $5,000 in liquid assets. When I was done, I analyzed the results of my research and boiled down the responses to create a picture of what allows the wealthy to prosper where others do not. My ensuing book became a sort of instruction manual for how to become wealthy.

The gulf between Rich Habits and Poverty Habits is staggering. If you’re well off already, chances are you already adhere to most of these Rich Habits. Integrating the ones you’ve neglected will push you further. But be assured: If you’re doing fine now without minding these principles, it’ll catch up to you.

 

1. Live within your means.

Wealthy people avoid overspending by paying their future selves first. They save 20 percent of their net income and live on the remaining 80 percent.

Among those who are struggling financially, almost all are living above their means. They spend more than they earn, and their debt is overwhelming them. If you want to end your financial struggles, you need to make a habit of saving and budgeting what you spend.

2. Don’t gamble.

Talk about a sucker bet: Every week, 77 percent of those who struggle financially play the lottery. Hardly anyone who is wealthy plays the numbers. Wealthy people do not rely on random good luck for their wealth. They create their own good luck. If you still want to bet after knowing the risk, use money from your entertainment budget.

 

3. Read every day.

Reading information that will increase your knowledge about your business or career will make you more valuable to colleagues, customers or clients. Among wealthy people, 88 percent read 30 minutes or more every day. Just as important, they make good use of their reading time:

  • 63 percent listen to audiobooks during their commute.
  • 79 percent read educational career-related material.
  • 55 percent read for personal development.
  • 58 percent read biographies of successful people.
  • 94 percent read current events.
  • 51 percent read about history.
  • 11 percent—only 11 percent—read purely for entertainment purposes.

The reason successful people read is to improve themselves. This separates them from the competition. By increasing their knowledge, they are able to see more opportunities, which translate into more money. Comparatively speaking, only one in 50 of those struggling financially engages in this daily self-improvement reading, and as a result the poor don’t grow professionally and are among the first to be fired or downsized.

4. Forget the boob tube .

How much of your valuable time do you lose parked in front of a screen? Two-thirds of wealthy people watch less than an hour of TV a day .

Instead, these successful people use their free time engaged in personal development, networking, volunteering, working side jobs or side businesses, or pursuing some goal that will lead to rewards down the road. But 77 percent of those struggling financially spend an hour or more a day watching TV, and 74 percent spend an hour or more a day using the internet recreationally..

5. Control your emotions.

Not every thought needs to come out of your mouth. Not every emotion needs to be expressed. When you say whatever is on your mind, you risk hurting others. Loose lips are a habit for 69 percent of those who struggle financially. Conversely, 94 percent of wealthy people filter their emotions. They understand that letting emotions control them can destroy relationships at work and at home. Wait to say what’s on your mind until you’re calm and have had time to look at the situation objectively.

Fear is perhaps the most important negative emotion to control. Any change, even positive changes such as marriage or a promotion, can prompt feelings of fear. Wealthy people have conditioned their minds to overcome these thoughts, while those who struggle financially give in to fear and allow it to hold them back.

Whether you fear change, making mistakes, taking risks or simply failure, conquering these emotions is about leaning in just a little until you build up confidence. It’s amazing how much confidence helps.




6. Network and volunteer regularly.

You’ll build valuable relationships that can result in more customers or clients, or help you land a better job if you spend time pressing the flesh and giving back in your community. Almost three-quarters of wealthy people network and volunteer a minimum of five hours a month. Among those struggling financially, only one in 10 does this.

One perk of volunteering is the company you’ll keep. Very often the boards and committees of nonprofits are made up of wealthy, successful people. Developing personal relationships with these folks will often result in future business relationships.

7. Go above and beyond in work and business.

Unsuccessful people have “it’s not in my job description” syndrome. Consequently, they are never given more responsibility, and their wages grow very little from year to year—if they keep their jobs at all. Wealthy individuals, on the other hand, make themselves invaluable to their employers or customers, writing articles related to their industry, speaking at industry events and networking. Successful people work hard to achieve the mutual goals of their employers or their businesses.

8. Set goals, not wishes.

You cannot control the outcome of a wish, but you can control the outcome of a goal.

Every year, 70 percent of the wealthy pursue at least one major goal. Only 3 percent of those struggling to make ends meet do this.

 

9. Avoid procrastination.

Successful people understand that procrastination impairs quality; creates dissatisfied employers, customers or clients; and damages other nonbusiness relationships. Here are five strategies that will help you avoid procrastination:

  •  Create daily “to-do” lists. These are your daily goals. You want to complete 70 percent or more of your “to-do” items every day.
  •  Have a “daily five.” These activities represent the crucial things that will help you get closer to realizing some major purpose or goal.
  •  Set and communicate artificial deadlines. There’s nothing wrong with finishing early.
  •  Have accountability partners. These are people you team with to pursue a big goal. Communicate with them at least every week, and make sure they hold your feet to the fire.
  • Say a “do it now” affirmation. This is a self-nagging technique. Repeat the words “do it now” over and over again until you begin a task or project.

10. Talk less and listen more.

A 5-to-1 ratio is about right: You should listen to others five minutes for every one minute that you speak. Wealthy people are good communicators because they are good listeners. They understand that you can learn and educate yourself only by listening to what other people have to say.




11. Avoid toxic people.

We are only as successful as the people we spend the most time with. Of wealthy, successful people, 86 percent associate with other successful people. But 96 percent of those struggling financially stick with others struggling financially.

If you want to end your financial struggles, you need to evaluate each of your relationships and determine if they are a Rich Relationship (with someone who can help you up) or a Poverty Relationship (with someone holding you back). Start spending more and more time on your Rich Relationships and less on your Poverty Relationships. Rich Relationships can help you find a better job, refer new business to you or open doors of opportunity.

12. Don’t give up.

Those who are successful in life have three things in common: focus, persistence and patience. They simply do not quit chasing their big goals. Those who struggle financially stop short.

13. Set aside the self-limiting beliefs holding you back.

If you’re hurting financially, you’ve probably told yourself some of these untruths before: Poor people can’t become rich. Rich people have good luck and poor people have bad luck. I’m not smart. I can’t do anything right. I fail at everything I try.

Each one of these self-limiting beliefs alters your behavior in a negative way. Almost four out of five wealthy people attribute their success in life to their beliefs. Change your negative beliefs into positive affirmations by reading lessons from the greats of personal development, like Napoleon Hill, Dale Carnegie and Jim Rohn.

14. Get a mentor.

Among the wealthy, 93 percent who had a mentor attributed their success to that person. Mentors regularly and actively participate in your growth by teaching you what to do and what not to do. Finding such a teacher is one of the best and least painful ways to become rich.

If you know your goals, find someone who has already achieved them.

 

15. Eliminate “bad luck” from your vocabulary.

Those struggling financially in life have a way of creating bad luck for themselves. It’s a byproduct of their habits. Poverty Habits, repeated over and over are like snowflakes on a mountainside. In time, these snowflakes build up until the inevitable avalanche—a preventable medical problem, a lost job, a failed marriage, a broken business relationship or a bankruptcy.

Conversely, successful people create their own unique type of good luck. Their positive habits lead to opportunities such as promotions, bonuses, new business and good health.

16. Know your main purpose.

It’s the last Rich Habit, but it might be the most important. Those people who pursue a dream or a main purpose in life are by far the wealthiest and happiest among us. Because they love what they do for a living, they are happy to devote more hours each day driving toward their purpose.

Odds are, if you are not making sufficient income at your job, it is because you are doing something you do not particularly like. When you can earn a sufficient income doing something you enjoy, you have found your main purpose.

As you can see, the differences between rich and poor are simple—sometimes intuitive—but not insignificant. Aim to take up all 16 of these habits, and you’re almost guaranteed to become better off.




Darpan Sachdeva is the CEO and Founder of Nobel thoughts.com. With a long time passion for Entrepreneurship, Self development & Success, Darpan started his website with the intention of educating and inspiring like-minded people all over the world to always strive for success no matter what their circumstances.To keep going and never get disheartened and learn from every adversity.

 

 

 

13 habits of self-made millionaires, from a man who spent 5 years studying rich people

by Darpan Sachdeva

-Via Business Insider (Kathleen Elkins)

All self-made millionaires had to start somewhere.

Much of their transformation from ordinary to seven-figure status can attributed to “rich habits,” a term coined by Thomas C. Corley, who spent five years researching the daily habits of 177 self-made millionaires.

“From my research, I discovered that daily habits dictate how successful or unsuccessful you will be in life,” he writes in his upcoming book  “Change Your Habits, Change Your Life.” “There is a cause and effect associated with habits. Habits are the cause of wealth, poverty, happiness, sadness, stress, good relationships, bad relationships, good health, or bad health.”

The good news is all habits can be changed, Corley notes. Here are a few “rich habits” of self-made millionaires that you can start developing today

 

1. They read consistently.

 

1. They read consistently.

Bill Gates is an avid reader.Bill Gates Foundation

The rich would rather be educated than entertained. As Corley writes, “Eighty-eight percent of the rich devote thirty minutes or more each day to self-education or self-improvement reading … Most did not read for entertainment … The rich read to acquire or maintain knowledge.”

Corley found that they tend to read three types of books: biographies of successful people, self-help or personal development, and history.

 

2. They exercise.

2. They exercise.

Scott Barbour/Getty Images

“Seventy-six percent of the rich aerobically exercise 30 minutes or more every day,” Corley reports. Aerobic exercise includes anything cardio, such as running, jogging, walking, or biking.

“Cardio is not only good for the body, but it’s good for the brain,” he writes. “It grows the neurons (brain cells) in the brain … Exercise also increases the production of glucose. Glucose is brain fuel. The more fuel you feed your brain, the more it grows and the smarter you become.”

3. They hang out with other successful people.

3. They hang out with other successful people.

Tristan Fewings/Getty

“You are only as successful as those you frequently associate with,” Corley writes. “The rich are always on the lookout for individuals who are goal-oriented, optimistic, enthusiastic, and who have an overall positive mental outlook.”

It’s equally important to avoid negative people and influences, Corley emphasizes: “Negative, destructive criticism will derail you from pursing success.”

 

4. They pursue their own goals.

4. They pursue their own goals.

Spanx founder and self-made billionaire Sara Blakely.Paul Morigi/Getty

“Pursuing your own dreams and goals creates the greatest long-term happiness and results in the greatest accumulation of wealth,” Corley writes.

While too many people make the mistake of chasing someone else’s dream — such as their parents’ — rich people define their own goals and pursue them relentlessly and passionately.

“Passion makes work fun,” writes Corley. “Passion gives you the energy, persistence, and focus needed to overcome failures, mistakes, and rejection.”

5. They get up early.

5. They get up early.

Ryan Pierse/Getty Images

Nearly 50% of the self-made millionaires in Corley’s study woke up at least three hours before their workday actually began.

It’s a strategy to deal with inevitable daily disruptions, such as a meeting that went too long, egregious traffic, or having to pick up your sick kid from school.

“These disruptions have a psychological effect on us. They can drip into our subconscious and eventually form the belief that we have no control over our life,” Corley writes. “Getting up at five in the morning to tackle the top three things you want to accomplish in your day allows you to regain control of your life. It gives you a sense of confidence that you, indeed, direct your life.”


6. They have multiple sources of income.

6. They have multiple sources of income.

Jeff J Mitchell/Getty

“Self-made millionaires do not rely on one singular source of income,” Corley states. “They develop multiple streams. Three seemed to be the magic number in my study … Sixty-five percent had at least three streams of income that they created prior to making their first million dollars.”

Examples of these additional streams are real-estate rentals, stock market investments, and part-ownership in a side business.

7. They find and check in with mentors.

“Finding a mentor puts you on the fast track to wealth accumulation,” Corley writes.

“Success mentors do more than simply influence your life in some positive way,” he continues. “They regularly and actively participate in your success by teaching you what to do and what not to do. They share with you valuable life lessons they learned either from their own mentors or from the school of hard knocks.”

8. They’re positive.

8. They're positive.

Self-made billionaire Mark Cuban.Steve Jennings/Getty Images

“Long-term success is only possible when you have a positive mental outlook,” Corley states. “In my research, positivity was a hallmark of all the self-made millionaires.”

The problem for most people is that they’re completely unaware of their thoughts, positive or negative, he explains: “If you stop to listen to your thoughts, to be aware of them, you’d find most of them are negative. But you only realize you are having these negative thoughts when you force yourself to be aware of them. Awareness is the key.”

9. They don’t follow the herd.

9. They don't follow the herd.

REUTERS/Toby Melville

“We so desire to blend in, to acclimate to society, to be a part of the herd, that we will do almost anything to avoid standing out in a crowd,” Corley writes. Yet “failure to separate yourself from the herd is why most people never achieve success.”

Successful people create their own new herd and then pull others into it, Corley says: “You want to separate yourself from the herd, create your own herd, and then get others to join it.”

10. They have good etiquette.

10. They have good etiquette.

Drew Hallowell/Getty

“Self-made millionaires have mastered certain rules of etiquette principles you have to master if you want to be a success,” Corley writes.

These include sending thank-you notes, acknowledging important life events, such as a wedding or birthday, eating politely and using table manners, and dressing properly for various social events.

11. They help others succeed.

“Helping other success-minded people move forward in achieving their goals and dreams helps you succeed,” Corley writes. “No one realizes success without a team of other success-minded people. The best way to create your team is to offer help to other success-minded people first.”

You don’t want to give help to anyone and everyone, Corley notes: “You want to focus on helping only those who are pursuing success, are optimistic, goal-oriented, positive, and uplifting.”

12. They dedicate 15 to 30 minutes a day to just thinking.

12. They dedicate 15 to 30 minutes a day to just thinking.

Alan Crowhurst / Stringer / Getty Images

“Thinking is key to their success,” Corley observes. The rich tend to think in isolation, in the mornings, and for at least 15 minutes every day.

“They spent time every day brainstorming with themselves about numerous things,” he explains. The topics range from careers and finances to health and charity.

They ask questions such as, “What can I do to make more money? Does my job make me happy? Am I exercising enough? What other charities can I get involved in?”

13. They seek feedback.

 

“Fear of criticism is the reason we do not seek feedback from others,” Corley writes. “But feedback is essential to learning what is working and what isn’t working. Feedback helps you understand if you are on the right track. Feedback criticism, good or bad, is a crucial element for learning and growth.”

Additionally, it allows you to change course and experiment with a new career or business. As Corley says, “Feedback provides you with the information you will need in order to succeed in any venture.”



 

Darpan Sachdeva is the CEO and Founder of Nobel thoughts.com. With a long time passion for Entrepreneurship, Self development & Success, Darpan started his website with the intention of educating and inspiring like-minded people all over the world to always strive for success no matter what their circumstances.To keep going and never get disheartened and learn from every adversity.

 

20 Habits of Eventual Millionaires

by  Darpan Sachdeva

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Following  are the powerful habits of rich, successful people according to serial entrepreneur James Altucher.

Altucher is an American hedge fund manager, entrepreneur, bestselling author, and podcaster. Having founded or cofounded more than 20 companies, including Reset Inc. and StockPickr and says he failed at 17 of them.

His books ‘Choose Yourself: Be Happy’ and ‘Make Millions, Live the Dream’ have been read and re-read by aspiring entrepreneurs across the world,.

Here outlined are his ‘The 20 Habits Of Eventual Millionaires’ list. How many can you tick off? I strongly believe that following even  half way of these 20 habits could bring us closer to  millions we aspire.

Enjoy the read and share your views on the experiences you face doing these metallic habits…

 

1.Say “No”

Saying-No

Sometimes its wiser to say No to distractions to get the results you need in the limited time in hand. “When you say “No” you have more time to read, learn, sleep, ask questions, contact friends,family, love life. Say “no” more.”

 

  1. Love

123images-of-love

Mankind would be in  such a good place if all of us give and extend that extra love to each other on daily basis.”This is the only religion. This is the only thing worth surrendering to. This is the fuel for your idea muscle.”

 

  1. Make Mistakes

Mistakes Road Sign with dramatic clouds and sky.

 

Success is never attained by the first hit.It takes a series of mistakes that turn the failures eventually to path to success.With each mistake on the road ,lesson is learnt and step forward is taken.”Mistakes are the spell books of success. Study them hard. Learnt heir incantations. When muscles tear they rebuild stronger.”

 

  1. Plant Seeds

plant-a-seed

“Basic Garden Math: 1% of the seeds turns into 50% of the flowers. Plant lots of seeds.”

Most people have a goal and they work hard following that.Well there is nothing wrong with that.But the real key is to plant many many seeds so as to get  more flowers.

What are the seeds for life?

Have gratitude for what you have and value it,Share good ideas with friends and people.Eat healthy,Exercise,read a good book. Care for your family

 

  1. Be Around People Who Are Kind To You And Love You

32738-wheatfield-sun-joy.1200w.tn

This has to develop as a habit to grow.It will take it own time and sweat.Important is to grow and improve on daily basis.”Other people will make you unhappy, unkind and unsuccessful.”

 

  1. Stand Next To The Smartest Person In the Room

smart

There is a saying that if you see your self as the smartest person in the room then you are in the wrong room.”Harold Ramis did it (Bill Murray). Steve Jobs did it (Steve Wozniak). Craig Silverstein did it (Larry Page). Kanye West did it (Jay Z). I make money only when I do this.”

Just look for the smartest person in the room,Quietly follow him without asking any questions.

 

  1. No Excuses

excuses

People generally say i do not have enough time,enough money,enough friends,enough energy to get success. Stop these excuses as they bring you no where forward.

“Blaming is draining. Complaining is draining. Explaining is draining. We don’t have enough inner plumbing for all that draining.”




  1. Don’t Be In A Rush

rush

To get to the success and desired goals in life it takes time.Its built of the moments of tiny success on the way to the bigger life goal.Enjoy every bit of it.”Every overnight success I’ve spoken to, took 10 – 20 years to get there. But only if they celebrated small successes along the way.”

  1. Solve Difficult Gratitude Problems

Gratitude

In the time of stress, anger and distress ,stop for a while and think of one good thing for which you are grateful for.extend gratitude for the good things around you what you are happy with..

“If you can find a diamond in the mud, you are going to end up with a lot of diamonds in life.”

10 Warren Buffett’s 5/25 Rule

warrenbuffet

“Make a list of 25 things to do in life. Now do the top 5. And never again think about the other 20 ever, else they will take time away from the 5 that are most important to you.”

 

  1. Write Down 10 Ideas A Day

ideas

“This actually turns into a super power. Do this for six months and see what happens.”

Coming up with great ideas requires muscle .Carry a journal with you, or make use of the notepad on your phone and, throughout the day, jot down ideas that come to mind. There is something about writing your ideas down that makes the brain feel like the idea was acknowledged.

 

  1. Follow Up

Hand writing inscription "Follow Up" with marker, concept

“I’m shy and bad at this. And lazy. Send an email the next day with an idea on the next step. I have to work on this.”

Following up might be a “nice to meet you” email. Or maybe it’s buying them a first edition of their favorite book or  movie .Or maybe it’s one of the 10,000 things in between that.




  1. Ask Questions

Group of People Asking Questions

“There are more questions than answers. Opportunities are buried in the questions, Facts can be outsourced.”

Never stop being curious and ask questions to what might lead you fulfill your thirst and lead to success.

  1. 1% A Day

little everyday

“Whatever you want to get better at: do1% more each day. 1% a day, compounded, is 3800% a year. You win.”

You have that huge goal to write a book,win the tournament,make millions or become a leader,move towards it with the ” a little a day” concept.Take baby steps every day towards the big goal.

 

  1. Right Now

now

“Regret will waste time today worrying about yesterday. And anxiety will steal energy from the future. Focus on right now.”

Every time I’ve had a problem in the future, it never came true.

Every time I’ve had a regret in the past, the regret kept me glued to the mud.

Right now you are dealt cards. No other hand before or after will help you right now.

So this is the only moment to focus on. Right now is best predictor of Right Life.

 

  1. Sleep

Sleep

“Sleep rejuvenates brain cells, heals the body, and reduces anxiety. And your brain is only active 2-5 hours a day. Sweets dreams.”

  1. Every Day, Avoid Death

Everyday_Health_logo

“You can’t get rich from a hospital bed. Or a grave. Move every day, sleep well, eat well.”

Its generally trusted that as you grow old your metabolism starts to change.This is wrong.You just start sitting more as you grow.So start moving.

  1. Do One Thing Every Day You Loved As A Kid

koriver wener photo mark klein

“This is usually the fuel that can power your life.”

I always loved to write,so i write now whenever get the time to do it.I have always loved to speak in front of public ,so i practice now public speaking and teaching. on whenever possible.

As a kid what ever we wanted to do was our internal calling  and could have been suppressed with time but is never killed.You can always bring it back if you follow your heart.

 

Wait: I thought there were 20? 

“Secret to success = give yourself permission to sometimes be wrong.”

This could be counted in as another habit not less important towards earning your millions.

Give yourself permission to not always be right. Give yourself permission to not always be liked. Give yourself permission to not always be at peace. Give yourself permission to not be a success.Then you will gradually have whatever you gave yourself permission “to not.”

 

The above habits will make you that bright sun glowing with immense power who has these worth applauding powerful qualities and habits.

To your success!!!




Blog PhotoDarpan Sachdeva is the CEO and Founder of Nobel thoughts.com. With a long time passion for Entrepreneurship, Self development & Success, Darpan started his website with the intention of educating and inspiring like-minded people all over the world to always strive for success no matter what their circumstances.To keep going and never get disheartened and learn from every adversity.

 

Considerations for the New Year 2017

by  Darpan Sachdeva

The start of the  new year  is like a start of  new phase in our lives ,a new chapter to start in our life book.This is the time when you do need to take care of your mindset and emotional triggers under control and work upon your affirmations and goals for the year ahead.

Me doing the same have come across the following considerations for the upcoming year and would want to share with you all.I do hope this brings value to  everyone.

1.On Earning:

never-depend-on-single-income-header

Never depend upon a single stream of revenue in these hard economic times.There is always some thing not working fine and errors happening.A multiple  income source shall be a peace of mind.

What can be  a better suggestion than this coming out from the world’s best financial guru and investor Warren Buffet himself.He has lived the life which proves to this fully.

2.On Spending:

1700080-warren-buffett-quote-if-you-buy-things-you-do-not-need-soon-you

If you buy things you do not need,soon you will have to sell things you need.Its just a thought and i do not say you do not buy things that really fancy and motivate you move ahead in life.Of course,there are things on day-to-day basis that we do need but as for the fancy needs,trust me there is no end to it.There is always a step higher.

 

3.On Savings:

save

Do not save  what is left after spending,but spend what is left after saving.This money habit is one that most of us in today’s world are entrapped to and cannot find a way out.The earlier we adopt this,better its going to be for us and the society as a whole in the long run.

4.On taking Risks:

119336-warren-buffett-quote-never-test-the-depth-of-river-with-both-the

Never ever test the depth of a river with both your feet.Now i do not say that one should not be daring and brave but a wise and thoughtful bravery is the way to go.

 

5.On Investment:

eggs

Do not put all your eggs in one basket.Nothing is ever stable in life for long and mess does happens.So far more you have spread out investments wisely ,more safe should you feel as per The finance Supremo “Warren Buffet”

 

6.On expectations:

24021-warren-buffett-quote-honesty-is-a-very-expensive-gift-don-t-expect

Honesty is a very expensive gift.Do not expect it from cheap people.Its one strong feature of humankind that once grown and nourished takes you through a long way,but not so easy to be found in our days sadly.

 

7.On Past:

past-future

Past is waste paper,present is a news paper and future is a question paper.Come out of your past,Control the present and secure the future.The new and achievable lies in front of us in the future.lets work on it.

 

8.When bad things happen in life:

89528-dr-seuss-quote-when-something-bad-happens-you-have-three-choices

When some thing bad happens in life ,you have three choices.You can either let it define you,let it destroy you,or you can let it strengthen you.

As the Stoics would say ,it’s not the event or happening  that is important as much as our perception of event that  controls your behavior towards future.



9.Mistakes:

Male hand holding wooden pencil and delete word "MISTAKE" on the white paper

We use pencils when we were young,but now we use pens.Do you know why?Because mistakes in childhood can easily be erased,unlike now. I do not say we should stop attempting and looking forward in life but to create the same mistakes again and again is not the way to go.

 

Wishing you all a very happy and prosperous new year.Please let me know in the comments below your new year considerations for 2017.



Blog PhotoDarpan Sachdeva is the CEO and Founder of Nobel thoughts.com. With a long time passion for Entrepreneurship, Self development & Success, Darpan started his website with the intention of educating and inspiring like-minded people all over the world to always strive for success no matter what their circumstances.To keep going and never get disheartened and learn from every adversity.

 

 

 

The Science of Scarcity-A behavioral economist’s fresh perspectives on poverty

By Darpan Sachdeva
Via CARA FEINBERG,Harvard Magazine

Sendhil


TOWARD THE END of World War II, while thousands of Europeans were dying of hunger, 36 men at the University of Minnesota volunteered for a study that would send them to the brink of starvation. Allied troops advancing into German-occupied territories with supplies and food were encountering droves of skeletal people they had no idea how to safely renourish, and researchers at the university had designed a study they hoped might reveal the best methods of doing so. But first, their volunteers had to agree to starve.

The physical toll on these men was alarming: their metabolism slowed by 40 percent; sitting on atrophied muscles became painful; though their limbs were skeletal, their fluid-filled bellies looked curiously stout. But researchers also observed disturbing mental effects they hadn’t expected: obsessions about cookbooks and recipes developed; men with no previous interest in food thought—and talked—about nothing else. Overwhelming, uncontrollable thoughts had taken over, and as one participant later recalled, “Food became the one central and only thing really in one’s life.” There was no room left for anything else.

Though these odd behaviors were just a footnote in the original Minnesota study, to professor of economics Sendhil Mullainathan, who works on contemporary issues of poverty, they were among the most intriguing findings. Nearly 70 years after publication, that “footnote” showed something remarkable: scarcity had stolen more than flesh and muscle. It had captured the starving men’s minds.

Mullainathan is not a psychologist, but he has long been fascinated by how the mind works. As a behavioral economist, he looks at how people’s mental states and social and physical environments affect their economic actions. Research like the Minnesota study raised important questions: What happens to our minds—and our decisions—when we feel we have too little of something? Why, in the face of scarcity, do people so often make seemingly irrational, even counter-productive decisions? And if this is true in large populations, why do so few policies and programs take it into account?

In 2008, Mullainathan joined Eldar Shafir, Tod professor of psychology and public affairs at Princeton, to write a book exploring these questions. Scarcity: Why Having Too Little Means So Much (2013) presented years of findings from the fields of psychology and economics, as well as new empirical research of their own. Based on their analysis of the data, they sought to show that, just as food had possessed the minds of the starving volunteers in Minnesota, scarcity steals mental capacity wherever it occurs—from the hungry, to the lonely, to the time-strapped, to the poor.

That’s a phenomenon well-documented by psychologists: if the mind is focused on one thing, other abilities and skills—attention, self-control, and long-term planning—often suffer. Like a computer running multiple programs, Mullainathan and Shafir explain, our mental processors begin to slow down. We don’t lose any inherent capacities, just the ability to access the full complement ordinarily available for use.

But what’s most striking—and in some circles, controversial—about their work is not what they reveal about the effects of scarcity. It’s their assertion that scarcity affects anyone in its grip. Their argument: qualities often considered part of someone’s basic character—impulsive behavior, poor performance in school, poor financial decisions—may in fact be the products of a pervasive feeling of scarcity. And when that feeling is constant, as it is for people mired in poverty, it captures and compromises the mind.

This is one of scarcity’s most insidious effects, they argue: creating mindsets that rarely consider long-term best interests. “To put it bluntly,” says Mullainathan, “if I made you poor tomorrow, you’d probably start behaving in many of the same ways we associate with poor people.” And just like many poor people, he adds, you’d likely get stuck in the scarcity trap.

Poverty Taxes the Mind

MULLAINATHAN IS THE FIRST to admit he’s no stranger to the scarcity cycle—particularly when it comes to time. A self-confessed over-committer with endless energy for exploring new passions, he is “quite familiar” with tardiness and missed deadlines. Though he’s no slouch at juggling tasks—at age 42, he’s a tenured professor, a MacArthur Fellowship recipient, and a rising star in behavioral economics—things are still always piling up, he says during an interview, pointing to actual piles of papers around his office desk.

No one ever has enough time—making it an excellent way to understand how scarcity works, he explains. A time crunch can be useful; deadlines often increase motivation and concentration. But there are prices to pay for that amplified focus: anything that falls outside the scope of that time-limited task gets slighted, ignored, or put off to a later date. While this isn’t breaking news, for Mullainathan, anecdotes about time and its limits are a trusted Trojan Horse of sorts: a way to get into the minds of readers and audiences at lectures who may never have experienced more extreme types of scarcity. “The cycle of poverty generally gets talked about as a problem otherpeople face,” he says. “Our hope is to get people to understand how easy it is to get caught in it, even if they’ve never had the experience.”

Though he spent much of his early life in “decently comfortable” economic circumstances, Mullainathan has seen poverty first-hand, and it seared itself deep in his psyche. Born in a small South Indian sugarcane-farming village, he moved to Los Angeles at age seven with his family so his father could study, and later work in, aerospace engineering. But, as he recalls it, in the 1980s, when new laws mandated heightened security clearances in departments that had not previously required them, noncitizens like his father were suddenly out of a job with no chance of finding another one in the industry.

“This was the first time I felt real economic insecurity,” Mullainathan remembers. It was also the first time he saw scarcity’s effects in action. The job loss “in some ways liberated him,” he says of his father. Suddenly without a roadmap for the first time, Mullainathan’s parents bought a video store, which, through creative strategies—like developing a computer program they sold to other stores—became in time a successful endeavor. But those initial years were also packed with tensions and insecurity that set the family on edge. “Overnight,” he says, “I saw my parents change”: suddenly, they were much more stressed out and short-tempered, as if part of their personalities was different.

Years later, as a behavioral economist, Mullainathan saw this phenomenon at work in impoverished people around the world. “The evidence is everywhere,” he says. “We just had to find ways to gather it scientifically.” But like any science in the making—as Mullainathan and Shafir describe work like theirs—the path had to be blazed. Early on, for instance, as the authors recount in the introduction to their book, “When we told an economist colleague that we were studying scarcity, he remarked, ‘There is already a science of scarcity…. It’s called economics.’”

The colleague, of course, was right, Mullainathan concedes; economics is the study of how people manage physical scarcity. But even though actual scarcity is ubiquitous—there are always limits to time, food, and money—the feeling of scarcity is not, he explains. This overpowering mindset was what he and Shafir were interested in studying, and it had effects, they argued, that could be quantified and explored empirically.

In 2010, the authors and their colleagues set out to do that—setting up scientific trials in what Mullainathan jokingly calls “the best lab in the world”: a shopping mall in New Jersey. The group hoped to show in an experiment that poverty imposed a kind of “bandwidth tax” that impaired people’s ability to perform. “To put it crudely,” he explains, “poverty—no matter who you are—can make you dumber.”

To prove it, they planned to administer Raven’s Progressive Matrices tests (essentially IQ tests that measure skills without requiring experience or expertise) to their subjects. Just before taking the test, subjects were asked to consider a hypothetical scenario:

Imagine you’ve got car trouble and repairs cost $300. Your auto insurance will cover half the cost. You need to decide whether to go ahead and get the car fixed,or take a chance and hope that it lasts for a while longer. How would you make this decision? Financially, would it be easy or hard?

Using self-reported household income, the researchers split the subjects into groups of “rich” and “poor.” When they tallied their scores on the Raven’s Matrices, there was no statistically significant difference in the groups’ performance.

But in a second version of the test, researchers raised the price tag for the repairs to $3,000. Although rich people’s test scores showed no significant difference, the poor people’s scores dropped the equivalent of about 14 IQ points: the difference between the categories of “superior” and “average” intelligence—or more pointedly, from “average” to “borderline deficient.” That’s a greater deficit than subjects in sleep studies typically show after staying awake for 24 hours, Mullainathan and Shafir highlight. “Simply raising monetary concerns for the poor,” they explain, “erodes cognitive performance even more than being seriously sleep deprived.”

They attribute this result to the maelstrom of problems poor people must suddenly confront in the face of a large unexpected expense: how will I pay the rent, buy food, take care of my kids? This round of mental juggling depletes the amount of mental bandwidth available for everything else. Such problems simply don’t arise for the rich.

To rule out other factors, the researchers posed nonfinancial questions with small and large numbers; they even tried versions where they paid people for correct answers to questions. In each case, there was no difference in performance.

But the real test lay in the real world, Mullainathan continues. If just thinking about scarcity preoccupied subjects, what effect would real scarcity have?

The answer came from fieldwork he and his colleagues were already conducting in India. Sugarcane farmers, they discovered, get their income in one lump sum at harvest time, just once or twice a year. That meant farmers were poor during one part of the year, and flush with cash during another. Because harvests took place at different times for different farmers, researchers could rule out seasonal weather, events, and their accompanying obligations as bandwidth-usurping factors. And when the researchers conducted a study there similar to the New Jersey mall experiment, the results mirrored their original findings: the Indian farmers performed worse on Raven’s Matrices tests before their harvest, and better after they’d been paid.

The conclusion was clear, Mullainathan explains: poverty itself taxes the mind. And in the case of the Indian farmers, he adds, the data were even more convincing: unlike the New Jersey “lab” study, where subjects were compared to other people, the farmers were compared to themselves. The only variables that had changed were their financial circumstances.



Scarcity Begets Scarcity

DURING THE LAST HALF-CENTURY, the effects of stress and distraction on attention and self-control have been well explored by social scientists: psychologists like Roy Baumeister of Florida State University (formerly of Case Western Reserve University) have done extensive work on willpower and mental depletion, for example, showing that people who had forced themselves to eat radishes instead of tempting chocolates quit working on unsolvable puzzles sooner than those who had not. At Stanford, another study on decisionmaking found that subjects asked to memorize long strings of numbers had a harder time choosing healthy snacks over sweets than subjects asked to remember just two or three digits.

It’s a phenomenon scientists can see even in the chemistry of the brain: during periods of stress and tough self-control tasks, glucose levels plummet in the frontal cortex (the region associated with attention, planning, and motivation). Low blood sugar can deplete physical capacities; a struggling mind can create similar chemistry in the brain, and trigger the same debilitating results.

But despite these advances in psychology and neuroscience, the idea that behavioral findings could beget insight into economic decisions is relatively new. For years, neoclassical economics maintained that people were rational, selfish actors who consistently made decisions in their own best interests. But in 1979, a breakthrough paper on decisionmaking by Princeton psychologist Daniel Kahneman, LL.D. ’04, and Amos Tversky of Stanford, began to chip away at that idea. Their study asserted that the way choices are presented has as much effect on decisions as the actual value of the things people choose. In the following decades, their paper became one of the most widely cited studies in economics; 23 years later, after Tversky’s death, Kahneman won a Nobel Prize.

Today, behavioral economics is a mainstream endeavor (see “The Marketplace of Perceptions,”March-April 2006, page 50), and to Kahneman, work like Mullainathan and Shafir’s represents the field’s next logical steps. “Clearly there is a psychology of scarcity,” Kahneman said in an interview, “and this idea that scarcity itself produces its own decisions is a new—and very interesting—one.” The pair’s work inverts the long-held thinking that the poor are poor because they make bad decisions, he added. “Instead, people make bad decisions because they are poor.”

And, as Mullainathan explains, those bad decisions abound. Though he doesn’t place all of the problems that poor people face on scarcity’s shoulders, he believes scarcity can explain a mentality that people in its grip face. “We’re not just talking about shorter patience or less willpower,” he says. In the poor, “We’re often talking about short-term financial fixes that can have disastrous long-term effects.”

Take payday loans, for instance: high-interest loans that provide cash on demand, to be paid back when the borrower’s paycheck arrives. According to Mullainathan and Shafir, in 2006, there were more than 23,000 payday lender branches in the United States— more than all the McDonald’s (12,000) and Starbucks (nearly 9,000) locations combined. It’s a popular way to get money today, particularly for those without bank accounts. But for people without reliable incomes, debts must often roll over into the following month, incurring exorbitant fees. “This type of high-risk borrowing seems ridiculous,” Mullainathan says, but “we wanted to prove that thinking like this doesn’t come from a lack of financial understanding or foolishness—it comes from putting out fires.”

In 2011, in collaboration with Anuj Shah, now assistant professor of behavioral science at the University of Chicago Booth School of Business (then a graduate student at Princeton), they devised a study that they hoped would prove their point, inducing that same high-risk borrowing behavior in Princeton undergraduates by having them play a version of the American TV game show Family Feud.

In the show, contestants are asked to name things that belong to categories—for instance, “Things you might find in a professor’s office.” Unlike regular trivia games that have right and wrong answers, there are no right responses in Family Feud, just popular ones (the list of answers is gathered from a survey of 100 people prior to the show). Because contestants must think through an array of options before answering, time pressure limits the number of paths they can explore before hazarding a guess, so scarcity’s effects are in full bloom.

At Princeton, contestants were randomly split into “rich” and “poor” groups—the rich having more time to guess than the poor. All were given the option to borrow time: each additional second borrowed would cost them two seconds of “interest” deducted from their total time.

“The results mimicked everything we see in the real world,” Mullainathan reports. At first, the poor performed better than the rich did; scarcity made them focus more intently on the task. But when, in the next round, the subjects were allowed to roll over their loans and “repay” in subsequent rounds (thus making future rounds shorter), things quickly fell apart for the poor contestants. Early borrowing created a vicious circle for the poor; pressed for time, they needed to borrow more seconds, and borrowing more made them more pressed for time. By the final rounds, most of their time went to paying back loans, and the poor lost rounds that the rich won handily.

These students were randomly assigned to “poverty,” Mullainathan explains, so there could be nothing substantially different between them and those fellow students labeled “rich.” “The study shows the intimate link between success and failure under scarcity,” he and Shafir write inScarcity. And scarcity, no matter whom it menaces, inevitably leads to more scarcity.

Escaping the Scarcity Trap

SO HOW CAN PEOPLE ESCAPE the scarcity trap? And why does such research matter? The answer, says Mullainathan, isn’t necessarily a shift in policy, but a shift in policymakers’ perspective.

Typically, he explains, when the poor remain stuck in the grip of poverty, policymakers tend to ask what’s wrong with them, pointing to a lack of personal motivation or ability. Rarely, he continues, do we as policymakers ask, “What is it about this situation that is enabling this failure?”

This is the question we should be asking, says Mullainathan—a point he and Shafir make quite memorably in their book by telling a story about a spate of plane crashes that occurred during World War II. During that era, the authors recount, the United States military experienced an inordinate number of “wheels-up” crashes; after planes had landed, pilots would inexplicably retract the wheels instead of the wing flaps, sending the planes crashing to the runways on their bellies. At first, the blame fell squarely on the pilots, the authors explain: why were they so careless? Were they fatigued? But when the military began to look more closely, they realized the problem was limited to two particular plane models: B-17s and B-25s. Instead of looking inside the heads of the pilots, Mullainathan and Shafir write, the military looked inside the cockpits of those specific planes; there investigators discovered that the wheel controls and flap controls were placed right next to each other and looked nearly identical—a design specific only to the crashing planes. After identifying the problem and implementing a minor change in design (a small rubber wheel was placed on the end of the landing-gear lever), the number of wheels-up crashes declined.

“Error is inevitable, but accidents are not,” Mullainathan and Shafir explain. It’s not that pilots don’t bear responsibility for their training and alertness, but “a good cockpit design should not facilitate mistakes.”

The same should be true, they argue, for programs and policies that address poverty. Just as well-trained World War II pilots made seemingly silly errors in poorly designed cockpits, well-intentioned social programs such as low-income job-training courses, subsidized vaccination programs, and bank programs designed to help people save money, sometimes fail to attract—or retain—the people they are designed to serve.

It’s natural to look at the intended clients and blame a lack of personal responsibility, the authors explain. But, as Mullainathan and Shafir have shown through their own work, all individuals stuck in a cycle of scarcity will inevitably find themselves plagued with similar slips in performance; focus often suffers, long-term planning gives way to immediate financial fire-fighting, follow-through on commitments often becomes sporadic.

So why not design social programs that make room for this scarcity-induced behavior? the authors ask. Why not look at the “cockpit” instead of the “pilot”?

Take job-assistance programs, for instance, where absenteeism and non-completion are a regular problem. The clients these programs serve are often mentally depleted by the time they arrive for classes, the authors explain: out-of-work clients struggle to make ends meet and often must arrange transportation and child care in order to attend a session. If a client misses a class—a likely occurrence—the authors explain, attending the next one becomes much more difficult, and dropping out becomes increasingly likely.

But what if the class had a less rigid curriculum? Instead of offering more classes or changing the curriculum, Mullainathan and Shafir suggest, existing classes could be altered to start at different times and proceed in parallel. Then, if clients miss a class, the authors argue, they could simply show up the following week to a parallel session running a week or two behind.

Although this type of accommodating approach is often criticized as coddling or paternalistic, Mullainathan and Shafir argue that it’s just the opposite. This is not a substitute for personal responsibility, the authors claim; rather, “fault tolerance is a way to ensure that when the poor do take on [responsibility] themselves, they can improve—as many do. It is a way to ensure that small slipups—an inevitable consequence of bandwidth [depletion]—do not undo hard work.”

Most importantly, the authors explain, this shift in focus from “pilot” to “cockpit” does not necessarily require expensive monumental changes in existing policy. Rather, they argue, just as the addition of the small rubber wheel to the landing-gear lever in the World War II planes reduced pilot error, these social programs might achieve greater success through small tweaks to their design.



Designing for Scarcity

SMALL CHANGES can have huge effects, Mullainathan explains—an approach to policy that has gained traction during the last decade, in particular through the work of Richard Thaler, Walgreen Distinguished Service Professor of behavioral science and economics at Chicago’s Booth School, and Walmsley University Professor Cass Sunstein, of Harvard Law School (see“The Legal Olympian,” January-February, page 43). Their 2008 book, Nudge: Improving Decisions about Health, Wealth, and Happiness, presented years of research and insight on “choice architecture”—methods of influencing decisions by changing which choices are offered, without taking away people’s freedom to choose.

This type of decision manipulation is well known—and widely used—in the world of marketing, and like any tool, Mullainathan says, “It can be used for evil.” But in the world of behavioral economics, the idea is to help people do the things they already want to do: ironically, to make the rational, healthy, self-benefiting choices that traditional economic models (wrongly) assumed they already consistently did.

In certain circumstances, he explains, “nudging” people into better choices can be as easy as changing the wording on a page. For instance, when workers start a new job in the United States, they are given a form asking them to check a box if they want to enroll in a 401(k) retirement plan. In a 2001 study by Brigitte Madrian and Denis F. Shea (both then at Chicago; Madrian is now Aetna professor of public policy and corporate management at the Harvard Kennedy School), researchers gave new employees at certain businesses slightly altered forms, instructing them to check the box if they did not want to enroll. The results were striking, notes Mullainathan: at companies where employees had to opt out, more than 80 percent enrolled; at companies where they had to opt in, only 45 percent checked the box.

But in other circumstances—for example in the case of payday loans—the solutions are much less straightforward. Poor people take on these predatory loans because they have to, Mullainathan explains; bills must be paid now. Any nudging—or even outright pushing—at that moment will likely have little effect. But what if the nudges occurred long before the payday loan was necessary? What if people who are consumed by financial pressures in the present got help in planning for the future?

Mullainathan and Shafir present pages of suggested solutions, citing successful programs like Save More Tomorrow, a retirement-savings plan designed by Thaler and behavioral economist Shlomo Benartzi, a professor at the UCLA Anderson School of Management. The program asks people to commit to savings deductions whenever their salary increases in the future; instead of asking them to sacrifice during times of scarcity, Mullainathan explains, it’s done during times of (relative) abundance. The results were encouraging across the board, and in one firm, more than 75 percent of those offered the plan chose to enroll. By the third pay raise, those who had opted in had more than tripled their savings rates.

To effect such changes, behavioral economists must first shift people’s thinking—and the only way to do that, says Mullainathan, is to provide more evidence that their approaches to policy work in the real world.

Many scientists and nonprofit organizations are already answering that call, running experiments around the globe to test proposed changes in policy. In 2008, Mullainathan and Shafir themselves joined with several other colleagues to co-found Ideas42, a nonprofit that collaborates with organizations and businesses worldwide to test behavioral approaches to problems. A 2013 collaboration with the Cleveland Housing Network, for instance, yielded a 20 percent improvement in timely rent payment simply by sending postcard reminders and creating a monthly raffle for tenants who paid on time. Even changes as simple as new wording on a bank statement, converting interest percentages to “dollars owed,” or telling people how their gas and electricity usage compares to their neighbors’, have affected people’s choices for the better, Mullainathan explains. “The idea is to encourage people to do things just by making things easier. And the best part is…it often costs policymakers nothing.”

To Nudge author Richard Thaler, work like this marks the next step in the evolution of behavioral economics. Mullainathan and Shafir “are part of a generation of economists and social scientists changing the way we think about development economics,” he said in an interview. “They have taken seriously the idea that we have to do things that are not just interesting to other academics, but that have the possibility of being scaled up.”

Scaling Up the Science of Scarcity

FOR POLICYMAKERS, it’s that potential to effect change broadly that matters—and the evidence of success from the behavioral sciences has begun to catch their attention. In 2010, the British government formed the Behavioural Insights Team, intended to spread understanding of behavioral approaches and to implement trial programs in several areas of social policy. In 2014, the White House formed its own Social and Behavioral Sciences Team (called SBST, though many in the field refer to it as the “Nudge Unit”), and other governments around the world have shown interest in doing the same.

Perhaps the best indication of growing awareness of the value of these behavioral insights came this past December, when the World Bank released its 2015 annual World Development Report, which for the first time was devoted entirely to behavioral approaches to policy. The chapter on poverty was heavily influenced by Mullainathan and Shafir’s work on scarcity, according to one of the report’s authors, the Bank’s Alaka Holla. “Evidence of these programs’ success has been building for a while,” she said in an interview. “It was time to take this to the policy world.”

For Mullainathan, it’s been thrilling to see the spotlight widen from its traditional focus on people’s decisions to the circumstances shaping those choices. Mounting evidence of experimental programs’ successes and increased attention from reputable organizations has spurred real interest from policymakers in exploring behavioral economic solutions. But interest and full-scale adoption are two very different things, he points out, and the biggest hurdle to widespread implementation is the problem of poverty itself. “Our solutions always struggle because the underlying problem is so complicated,” Mullainathan explains. What might work for one population might completely fail for another.

Although social scientists know a lot about the economics of poverty, they know much less about the psychology it creates in individual populations, and this social science, Mullainathan argues, is just as important as the technological sciences policymakers rely on to solve problems. Scientists spend vast resources developing medications, water-purifying technologies, financial products, and social services designed to help people in need, he explains. But getting people touse these technologies also requires understanding the psychology of the people using them. Policymakers, he says, must make this type of research a priority.

“Bandwidth is a core resource,” Mullainathan and Shafir argue—one just as powerful, limited, and influential in people’s decisionmaking process as the dollars in their bank account. If we begin to look at bandwidth and the factors affecting it in the same way we measure economic circumstances, the authors claim, we can design and evaluate social programs based on how people actually act—not simply how numbers and statistics tell us they should.

“The mistake we make in managing scarcity is that we focus on one side of the calculus,” they write at the conclusion of their book. The cost of making changes to existing policies is easy to measure, but the cost of not doing so is much harder to quantify. This is what the science of scarcity attempts to gauge, Mullainathan and Shafir maintain: how situations, programs, and policies can deplete, tax, or build up psychological resources that are every bit as important as the physical ones that fill—or empty—our coffers.



Blog PhotoDarpan Sachdeva is the CEO and Founder of Nobel thoughts.com. With a long time passion for Entrepreneurship, Self development & Success, Darpan started his website with the intention of educating and inspiring like minded people all over the world to always strive for success no matter what their circumstances.To keep going and never get disheartened and learn from every adversity.

 

7 steps to get rich, from a 90-year-old book on wealth -The Richest Man in Babylon.

by Darpan Sachdeva

-via Kathleen Elkins,Business Insider

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The “secret” to getting rich is not much of a secret at all.

“It is practical. That which one man knows can be taught to others,” George S. Clason writes in his 1926 personal finance classic “The Richest Man in Babylon.

Clason’s collection of parables, based in the ancient city of Babylon, starts with the story of Arkad — the son of a humble merchant, of a large family with no hope of inheritance — who grows to become the richest man in Babylon, thanks to wisdom he sought out from a rich money lender named Algamish.

In hopes of turning his city into the wealthiest in the world, the King of Babylon asks Arkad if he can share the “secret to wealth” with the rest of the city. Arkad complies, and over the course of seven days, teaches a class of 100 men what he calls the “seven cures for a lean purse.”

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Save at least 10% of your income

1. ‘Start thy purse to fattening.’

Getting rich all begins with paying yourself first. More specifically, set aside a minimum of 10% of your earnings, Arkad advises: “For every ten coins thou placest within thy purse take out for use but nine. Thy purse will start to fatten at once and its increasing weight will feel good in thy hand and bring satisfaction to they soul.”

Anyone — rich or poor — can put money aside and let it accumulate, Arkad assures his class. You just have to commit to setting aside a minimum of 10%, and you’ll learn to live without it.

Today, it’s even easier to learn to live without a certain chunk of your income, thanks to technology. You can automatically deposit money from your paycheck and checking account into a retirement account, savings account, or other investment vehicle, removing the temptation to spend. If you never see it, you’ll learn to live without it.

“I, too, carried a lean purse and cursed it because there was naught within to satisfy my desires,” the richest man in Babylon explains to his class. “But when I began to take out from my purse but nine parts of ten I put in, it began to fatten. So will thine.”

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Live below your means

2. ‘Control thy expenditures.’

The next step is to simply spend less than you earn, which is easier said than done. Our consumer-driven society makes it incredibly easy to overspend — and what’s more, when income increases, people have a tendency to boost their spending. It’s called “lifestyle inflation.”

“What each of us calls our ‘necessary expenses’ will always grow to equal our incomes unless we protest to the contrary,” Arkad explains. “Confuse not the necessary expenses with thy desires.”

To control your expenses, you have to become a conscious spender and recognize where your money is going. A good starting point is to record all of your purchases (whether in a notebook, through an app like Mint, or on an Excel spreadsheet) and analyze your spending patterns.

“Study thoughtfully thy accustomed habits of living,” Arkad says. “Let thy motto be one hundred per cent of appreciated value demanded for each coin spent.” Even if you’re well on your way to accumulating a fortune, the habit of living below your means still applies. There are a surprising number of frugal billionaires who choose to save or give to charity, rather than drop their money on jets, yachts, and mansions.

 

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Put your money to work.

3. ‘Make thy gold multiply.’

Once you’ve made a habit out of controlling your expenses and setting aside at least 10% of your income, put that money to work.

“The gold we may retain from our earnings is but the start,” says Arkad. “The earnings it will make shall build our fortunes … Learn to make your treasure work for you. Make it your slave. Make its children and its children’s children work for you.”

Making your money your “slave” is the modern-day equivalent to smart investing through your employer’s 401(k) plan or other retirement accounts, such as a Roth IRA or traditional IRA. Thanks to compound interest, your savings can grow tremendously over time — the trick is to set aside money regularly and to start as early as possible.

“Behold, from my humble earnings I had begotten a hoard of golden slaves, each laboring and earning more gold,” explains Arkad. “As they labored for me, so their children also labored and their children’s children until great was the income from their combined efforts.”

 

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Make smart investments.

4. ‘Guard thy treasures from loss.’

There is always going to be a level of risk involved in investing, which is why it’s crucial to be smart about where you invest your money.

“The first sound principle of investment is security for thy principal,” says Arkad. “Is it wise to be intrigued by larger earnings when thy principal may be lost? I say not. The penalty of risk is probable loss. Study carefully, before parting with thy treasure, each assurance that it may be safely reclaimed. Be not misled by thine own romantic desires to make wealth rapidly.”

Investing is a long term game and the “get rich quick” mindset will only set you back. As legendary investor Warren Buffett likes to say, “It’s pretty easy to get well-to-do slowly. But it’s not easy to get rich quick.”

It can be tricky to figure out the best way to invest your money, but you don’t have to go at it alone. There are financial planners, wealth advisers, and robo-advisers to guide you. There is also an abundance of accessible information out there if you want to be a more hands-on investor. Check out some of our favorite books and podcasts that cover investing basics, strategies, and tips.

“Consult with wise men,” advises Arkad. “Secure the advice of those experienced in the profitable handling of gold. Let their wisdom protect thy treasure from unsafe investments.”




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Invest in a home.

5. ‘Make of thy dwelling a profitable investment.’

I recommend that every man own the roof that sheltereth him and his,” Arkad tells his class on the fifth day. “Nor is it beyond the ability of any well-intentioned man to own his home.”

Today, this topic is heavily debated, and there is no one, universal answer to the buying or renting question — however, Arkad argues that, “to own his own domicile and to have it a place he is proud to care for, putteth confidence in his heart and greater effort behind all his endeavors.”

Of course, before investing in a home, you’ll want to know how much you can afford and be financially prepared for the myriad of hidden costs that come with buying a home.

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Plan ahead for retirement

6. ‘Insure a future income.’

“The life of every man proceedeth from his childhood to his old age,” says Arkad. “Therefore do I say that it behooves a man to make preparations for a suitable income in the days to come, when he is no longer young, and to make preparations for his family should he be no longer with them to comfort and support them.”

Today, we call “the days to come” retirement. Time is your biggest asset when it comes to investing in retirement accounts — thanks to compound interest — so the earlier you can start saving for retirement, the better off you’ll be.

As far as making preparations for your family upon your death, or should you be in some way disabled, we now have insurance policies for these situations that you may want to consider:life, disability, and long-term care.

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Continually self-educate.

7. ‘Increase thy ability to earn.’

“The more of wisdom we know, the more we may earn,” preaches Arkad. “That man who seeks to learn more of his craft shall be richly rewarded.”

Rich people choose to constantly learn and grow — they would rather be educated than entertained, even after they’ve attained incredible success. Take Warren Buffett, for example, who estimates that 80% of his working day is dedicated to reading.

“Cultivate thy own powers, to study and become wiser, to become more skillful, to so act as to respect thyself,” says Arkad. “Thereby shalt thou acquire confidence in thyself to achieve thy carefully considered desires.”

Today — with such a wealth of books, podcasts, and online resources out there — it’s easier than ever to self-educate.



Blog PhotoDarpan Sachdeva is the CEO and Founder of Nobel thoughts.com. With a long time passion for Entrepreneurship, Self development & Success, Darpan started his website with the intention of educating and inspiring like minded people all over the world to always strive for success no matter what their circumstances.To keep going and never get disheartened and learn from every adversity.

14 Unique Thoughts About Money that Every Millionaire Has

BY PETENI KUZWAYO

Oprah Winfrey's The Life You Want WeekendI’m sure you’ll admit that money pre-occupies most minds most of the time. Yet research shows that money and finances are one of the toughest things to crack. You need only look at the wealth distribution statistics to see the financial plight that most of society finds themselves in. The results? Well, quite clearly, financially wealthy people are in the minority.

Logically, we can only conclude that they are different from the average Joe Sope. Be it their thoughts, speech or actions – they are different. In this post, I want to highlight 14 unique thoughts about money that makes millionaires different.

1. They know money is abundant
Millionaires live in an abundant frame of mind. To them, nothing is limited or scarce. Whilst most people scramble around – doing things they hate – because they believe money will run out, millionaires know that money will never run out.

2. They know money is the root of all good
Whilst most believe “money is the root of all evil”, millionaires know that money is the root of all good. Money solves problems. Money gives you the power to bless others. Money changes lives. Money brings pleasure. Money liberates. In the right hands, money is the root of all good.

“What material success does is provide you with the ability to concentrate on other things that really matter. And that is being able to make a difference, not only in your own life, but in other people’s lives.” – Oprah Winfrey

3. They know money comes from Value Add
Millionaires know that the number one ingredient that attracts money is problem solving. When you solve problems, you add value to other people’s lives. When you add value, people are willing to pay you bucket loads of cash – happily so.

4. They know earning more outweighs saving
Most financial gurus will tell you to “save as much as you can”. That’s why most of society spends 40 – 45 years of their lives working to save for retirement. Whilst the benefits of saving are undeniable, millionaires know that your ability to earn more money is far more important than your ability to save.

5. They live within their means
In modern day society, we suffer from consumerism. It suffocates us to a point of no return. There’s nothing wrong with spending money. But there’s something crazy about spending money you don’t have. Millionaires budget. Within that budget, they understand the importance of spending less than you earn.

6. They know that time and money have little correlation
Passive income is a millionaire’s secret. By definition, passive income is earning money without you physically being present. Whilst the majority of people hustle and trade their time for money, millionaires trade and leverage their brains and assets for money.

7. They know that calculated risks are not optional
“Playing it safe” with your money is a sad way of living your life. Being stupid with your money is also a pathetic way of living life. But somewhere in the middle, lies a sweet spot. And millionaires know this. They take financial risks, in a measured and calculative way.

“Brave people don’t live forever, but cautious people don’t live at all.” – Richard Branson

8. They choose action not lottery
Whilst hard work and hustling every day is not a priority, waiting for the lottery winnings isn’t going to crack it either. Millionaires act. They believe in action that positions them to make money. The majority of society believe in the lottery, and hinge most of their financial success on luck. We all need some stroke of luck. Millionaires need a stroke of luck, too. But the difference is this: for them luck finds them on the path of action.

9. They value life experience over formal education
Life is a great teacher. It teaches you stuff that formal education will never teach you, especially when it comes to making money. It’s no surprise that most educated people are employed by ‘drop outs’. Millionaires realize that you learn more about money in the real world than you do through formal education.

10. They value education over entertainment
Although millionaires value life experience over formal education, they don’t – for one second – under-estimate the importance of education. They read books. They read current affairs and stay abreast of issues.

Sadly, the majority of society are soaked in entertainment. From television to movies, entertainment occupies a large chunk of their time. Over weekends, it’s parties and clubs – all in the name of entertainment. Millionaires know that money and habitual entertainment are an unhealthy combination.

“Poor people have a big TV. RIch people have a big library.” – Jim Rohn

11. They know you don’t need money to make money
Millionaires use the power of leverage. I’ve already mentioned that millionaires know that there is an abundance of money. Just because you don’t have money, it doesn’t mean that there isn’t money. In addition I highlighted that money is generated when you add value to people’s lives. When you solve problems, people are willing to pay you.

These two factors alone mean that if you have an idea that can solve problems and add value to other people’s lives and there’s someone out there with an abundant supply of funds, you are in a position to make money.

Focus on solving problems and creating ideas. That way, you’ll move from the notion of “you need money to make money” to “You need ideas to make money”. And millionaires know this.

12. They know money is a magnet
With money, you are able to attract things and people – both good and bad. When you value money, you attract good. When you disrespect it, you attract negative aspects. Millionaires know the magnetic power of money and how it can elevate your life to levels you could never reach without it.

13. They know making money is a process
There’s no such thing as “overnight success”. Millionaires will tell you it took years to become an overnight success. Genuine millionaires have invested time and effort to eventually generate the ideas that make them millionaires. They have made sacrifices that most are not willing to make.

Becoming a millionaire is a process. Cheat the process at your own peril.

14. They know that money should never steal your peace
Ultimately, millionaires know that money is a resource that liberates. But, it should never steal you peace. It should never be chased at the expense of your health, relationships and other important areas of your life.

Conclusion
As I conclude, I think of Andrew Mason, founder of Groupon – a coupon and discount site. Groupon generated the largest revenue in a 12 month period for a start-up company. Founded in 2008, it generated approximately $350 million in 2010.

What was Mason’s ingredients? Simplicity and value add.

He harnessed the power of collective buying. He created a win-win solution where customers save a ton of money, businesses gets an influx of customers, and Groupon takes up to 50 percent of the cut.

Where money is concerned, millionaires think differently. Apart from lottery winners and criminals, making millions is no fluke. You have to think, speak and act in a way that reflects that you are not mainstream. Go out there and cash in on your thoughts.

PeteniEditor of Run For Wealth, a blog established with the mission of helping people “Run A Fulfilling Life Race”. The blog publishes content that helps you live an abundant and balanced life in all key areas of your life. Peteni has run over 20 Marathons, 10 Ultra-marathons and 4 Comrades Marathons. He is also the Nike Run Club Coach in JHB, South Africa