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Why Thinking Like A Bank Will Make You Rich...
Ask almost any human being alive if they would like to be rich and you will be overwhelmed with tons of YES’s.
It’s a fact of life I guess that people want to strike it big financially. Whatever the reason for you wanting to become rich is irrelevant in the face of actually doing the necessary things to become rich.
Many people say they want to become rich because of this or because of that, but their actions are not in alignment with their desires which results in them not becoming rich.
With that said, the purpose of this article is to put your desires in alignment with certain actions which you can implement in your life right away in order to start itching your way towards financial freedom.
Therefore, I purpose to you a simple, yet effective way to strike it big financially which is to be accomplished by thinking like a bank.
Let me say that again. If you want to become rich start thinking like a bank.
Now it is apparent that this is definitely not the only way you can become rich since there’s a million and one way ways to make a million and one dollars ha, but this is more of a mindset builder which will result in you increasing your wealth.
Hence, it’s one of many ways to get rich, unfortunately it is not a get rich quick method. In my perspective there is no get rich quick method because if there was such a method than everyone would be rich.
With that said, building up your mindset and taking the necessary steps will result in your accumulating wealth. In order to build up your mindset you first need to know what a right mindset looks like…
The Mindset of a Bank
The number one goal of a bank is to generate profit. That is what every commercial bank aims to do. They want to make money just like you want to make money.
This is the first step, right now your and the banks mindset is in alignment, but the bank generates this money in much different ways than the average person does. The bank ultimately generates money by investments, while the average person generates money through devoting his/her time and truly working hard for it.
The bank has money create money, the average person has to work to create money.
These are some of the basic differences between a bank and an average individual that results in a separate mentality amongst the two. Therefore, in order to truly become a person who possesses the ability to think like a bank you first need to understand how banks work and how they generate profit.
How Banks Work
I will be talking briefly about the way commercial banks work. Commercial banks are the banks that you come into contact with in your daily life. The way commercial banks work is they ultimately get people to open up an account with them. For instance, you probably have an account opened at a near bank of your choice.
Next, the person who opens up an account with a bank soon begins to deposit money into his/her account. For instance, every time you receive a cheque you deposit it into your chequing account as well as maybe put a way some money in your savings account which will result in interest earned.
Now what the bank does with your money once it is deposited is it ultimately takes a certain percentage of the money you deposited and it invests it.
On the other hand, it also leaves a small percentage on hand in case you want to withdraw your money. Next, the bank takes the large percentage of money and puts it to good use. It ultimately invests it whether that be by granting loans, investing in businesses, or whatever it is. The bottom line is it seeks out profit bearing investments and puts the money to use.
By investing the money you deposited it makes money which results in profit since it is much more than the interest it owes you. Hence, it uses your money in order to make money for itself while at the same time making it appealing to you to continue depositing money because you will earn interest.
In that sense, it’s a win win for everyone.
That is the way banks ultimately function. Again that was the simplest explanation since I just wanted to highlight some key actions that distinguish a banks thinking form a normal human beings thinking.
Lessons You Need To Apply
As I just mentioned the bank does two things with the incoming money it receives, one is to save and the second is to invest in order to generate more money. This is what you need to do. You need to become a bank ultimately.
With every paycheque you receive, you should put aside a certain percentage into your savings account and let it accumulate which in return can be used to generate more money once it reaches a significant level.
Due to the fact that you don’t get to enjoy some of the great luxuries the bank enjoys, I advise you take off at least 10-15% off your paycheque and let it accumulate while the rest can be spent towards bills and necessary expenses.
By letting your savings accumulate and investing the money in return should result in more money being made. This process can be repeated till infinitely and it will continue to bring in more money after more money considering that you are making sound investments. Of course you are going to lose money along the way, therefore it is up to you to become an intelligent investor.
However the fact of the matter remains that if you follow this method you will become rich. Now I’m not saying that it is going to happen over night, but it eventually will happen. You may be thinking to yourself, well if it was truly this easy than how come more people are not rich? Well allow me to shift your attention to two main problems which keep people broke.
1. THEY SPEND MONEY ON UNNECESSARY THINGS INSTEAD OF SAVING- You need to take control of your spending habits. If you receive money and you continue to spend this method will never work for you because you are not saving. You need to stop spending money on stuff that you do not need. Simple as that. However, we are all humans and I get that we all want stuff that we don’t need so I offer a simple solution to this issue…
Allow your investments buy you stuff you don’t need. Put the money you earn to good use and the return you receive on your investment can be used to purchase new fancy items. For instance, say you want a Lamborghini.
The dumb person would generate about $200,000 and go buy a lambo. Whereas the intelligent investor would put that $200,000 to use and let it accumulate more money. Once that initial $200,000 investment is returned this is used to purchase the Lamborghini.
Now the difference is in the latter stage you have a Lamborghini as well as an asset that continues to pay out money. This is how the rich operate as I’ve mentioned countless times in past articles and this is how you should start to function as well.
The next reason why most people don’t achieve financial freedom is because…
2. THEY DON’T INVEST THEIR MONEY- Now it’s much easier to become rich when you are working hard, saving your money, and investing than working hard and just saving.
Don’t get me wrong, the former method can be used to get rich, however the latter method will result in you raking it in much faster. With that said, I encourage you to tune up your investment skills. Starting out, you are probably going to make huge mistakes, but remember, every mistake contributes to your learning.
The person who has made the greatest number of mistakes is ultimately the person who has learned the most and is therefore much more likely to experience success.
With all this noted, it is a must that you shy away from these two issues just mentioned which keep people broke and follow this method or other methods and truly strive towards financial freedom if that is your goal.