The Other Side – Too Much Money
Rich Dad’s Guide to Investing
Since this is the first “Rich Dad Wednesday” on Art of Money I thought I’d go back to the first Robert Kiyosaki book that I ever bought…Rich Dad’s Guide to Investing. I picked it up for $1 at the charity book sale…ironically at my workplace.
I’m on Investor Lesson #2 What Kind of World Do You See?
- The more security you need, the more scarcity there is in your life.
- The more competitive you are, the more scarcity in your life.
Either of these ring true?
Let’s start by defining ’scarcity’….my definition is that scarcity exists if I don’t have everything that I would honestly enjoy in my life.
I like to keep my definitions simple:
Would I be able to enjoy a vacation condo in Banff? Yes.
Do I have one? No…therefore there is scarcity in my life.
Am I competitive? I used to pride myself on being competitive and I still do see it; when I made niche sites we knew that if we had a lot of outbound links on our pages that it would lower our click through rate.
Believing that we were competing with other sites for visitors is a belief in scarcity.
The security one is trickier. I would have never have told you that I was seeking security, because I was never materialistic, but I realized that it really doesn’t matter what kind of security that you seek. For me, I was seeking emotional security…I didn’t care about what was going on in my life, as long as it didn’t feel bad.
Tough to take the kind of initiative and risks required to build a successful life when you are valuing the avoidance of anything, and that’s what security really is.
So I have limiting beliefs…now what?
In the book Robert outlines that when you believe in scarcity you are only seeing one half of the financial coin. The half of “not enough money.” But he tells of the other side of the coin, albeit a difficult one to conceive of if you haven’t tasted it but the other side of the coin is: “too much money.”
For me just the thought that their is a world where not only is there no scarcity of money, but there is too much money is a tough one to get my head around…but I’m willing to give it a try.
Over the past 30 years, the nation’s total income share earned by the wealthiest 20 percent of all households increased from 43 to 50 percent.
During the same period, the income share of the poorest 20 percent of households dropped from 4.5 percent to 3.5 percent. So the economic pie slice for the richest households increased, while the slice for the poorest households dropped.
This would seem to illustrate Rich Dad’s theories.
Is there a world of too much money?
The chapter closes with another quote from Robert that rings true for me as well:
I came from a family that saw the world as a world of not enough money. My personal challenge was to repeatedly remind myself that another kind of world existed and that I needed to keep an open mind to see a world of both possibilities for me.
Can you see the both sides of the coin? Even entertaining the idea of a world with abundant money, changes EVERYTHING.
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Comments ( 8 )
[...] Welcome to the second installment of Rich Dad Wednesdays. Last week it was The Other Side – Too Much Money so logically this week I’m changing the subject completely with: [...]
How to Kick Butt at Cashflow 101 | Art Of Money added these pithy words on Aug 30 06 at 11:03 pmNneka added these pithy words on Aug 23 06 at 7:55 amHi Jon,
Steve Pavlina wrote 2 very interesting posts in his Ask Steve Series about the “problem” of too much money. For his solution, he mentioned the term “financial impact.” http://www.stevepavlina.com/blog/2006/07/ask-steve-money-and-financial-issues-solution/
To get over the idea of scarcity, what I have done is think of what I would do to financially impact society. Then I started doing that in my life today at the level that I can participate. I am realizing that there is much more than I could have ever imagined. More money, links, visitors, ideas, everything.
It’s becoming easier and easier everyday to push the boundries on my self-imposed limitations caused by my erroneous belief in lack.
Cheers,
Nneka
Jon added these pithy words on Aug 23 06 at 8:16 amThanks Nneka that’s a good tip, it reminds me of the Be Do Have post I wrote a while ago…glad to hear it is working for you.
Kimber added these pithy words on Aug 23 06 at 9:41 amI find that often people with issues of scarcity also haven’t put a finite dollar amount to enough.
Once I figured out exactly how much income I’d be happy with and the investment needed for that, my anxiety decreased.
prlinkbiz added these pithy words on Aug 23 06 at 11:22 amOooo good point Kimber. That’s what I’m trying to lead into this week with my blog for the ladies. There is such a scarcity mindset, especially in women, at least the ones I see blogging.
Jon- that is hilarious where and you picked up the RD book- this is my favorite one of the series.
Jon added these pithy words on Aug 23 06 at 5:26 pmA visit from both of the http://NoLimitsLadies.com ladies…how sweet is that!
…good tip Kimber…is I need a “whack of cash in a hurry” specific enough?
Jeff added these pithy words on Aug 23 06 at 5:59 pmOne thing that has helped me overcome a scarcity mindset is to understand that everything I could ever need or want already exists, and that I am, in one way or another, already connected to it. So my answer to the question posed by Lesson #2 — what kind of world do you see? — is an abundant one. I enjoy your blog very much, by the way.
EdmontonShaz added these pithy words on Aug 24 06 at 4:05 pmJon,
I think what Robert was referring to is more of a tax planning concept. In one of the CDs (i don’t recall which one) Robert notes that his accountant advised him that he was “making too much money in XYZ company”.
Many business owners face this on a regular basis. By planning for the fiscal year you can minimize you liabilities and “spread the risk” so to speak.My two cents.