The Psychology of Wealth: Understand Your Relationship with Money and Achieve Prosperity by Dr. Charles Richards is a bit different than the usual personal finance book that I’ve been reading lately. This book won’t show you how to become a millionaire or get out of debt. Dr. Richards worked with many successful people and he showcases what helped them become successful. In our society, we often equate money with success, but this is not the whole story. Many rich individuals struggle with inner demons and fears. They have a lot of money, but are not happy. Is that success?
Wealth is a sliding scale and the poorest Americans today live a much more comfortable life than a wealthy landowner from 200 years ago. The key to being wealthy is not comparing what you have to others, but defining what success is for you. If you have confidence and goals, you can achieve great things. Having high self esteem is essential to becoming successful and there are many ways to improve it. Family and upbringing plays a big part, but you need to face challenges and overcome them to really believe in yourself. The book is a bit light on financial advice, but Dr. Richards does cover a few mundane financial topics.
Dr. Richards went over the history of credit and showed us that in the past only a few people had access to credit. This prevented overspending, but also limited opportunities for many people. He categorized debts into consumptive and productive credit. When you get a loan to remodel the kitchen, it is consumptive credit and the kitchen will be for personal use only. On the other hand, if you use the credit to buy a hot dog stand, you can make money from it. Productive credit is a good thing and most businesses need such capital for operations and expansion.
My parents purchased their Thai restaurant for $9,000 in the 80’s. They did not have much savings and put only $3,000 down. They then paid the seller in monthly installments and in a few months they owned an income generating business. Many personal finance gurus believe all debts are bad, but Dr. Richards takes a different view. I agree with him that productive loans are a good thing.
There are many stories of successful people in this book and most share a common trait. They believe in themselves and they never stop trying. The road to success is like a mountain trail. There are rises and falls, but as long as you keep putting one foot ahead of another and head in the right direction, you will make progress. We need to make clear goals and envision where we want to be. What is your mountain top?
This is a very difficult question for me. I don’t have a clear idea of what success means to me. I know what I don’t want to do and I guess that is a start. I don’t want to climb the corporate ladder to become a high ranking leader nor do I want to work in a cubicle for the rest of my life. I suppose I should look though the 200 jobs list and see if anything tickles my fancy, but I’m pretty sure working in a corporation is wrong for me. Being an entrepreneur on the other hand is very attractive to me. My current dream of owning and operating a hostel/B&B near a beach paradise sounds good to me. 😉 What is your dream job?
All in all, I enjoyed this book. It has it’s up and down, but overall it’s an enjoyable read. I will have two copies of the book to giveaway in May so keep an eye out and don’t forget to enter.
For 2018, Joe plans to diversify his passive income by investing in US heartland real estate through RealtyShares. He has 3 rental units in Portland and he believes the local market is getting overpriced.
Joe highly recommends Personal Capital for DIY investors. He logs on to Personal Capital almost daily to check his cash flow and net worth. They have many useful tools that will help every investor analyze their portfolio and plan for retirement.
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