Hand full of Coins

I remember when I first became an entrepreneur. One of the first books I read on the topic (which is saying a lot, since I hate reading) was a book written by Donald Trump and Robert Kiyosaki called Midas Touch. They go in depth into what they believe make a good entrepreneur and why most don’t succeed. Gaining so much value from that I read the book Kiyosaki’s most known for, Rich Dad Poor Dad, which is also a great book that I highly encourage everyone to read.

There are a few concepts that I really came away with that I want to streamline into one concept I’ve labelled financial profiling.

Poor, Saver or Rich Minded

Robert separates people into three groups that he puts into the format of mindedness: poor minded, saver minded and rich minded. These are not financial profiles so much as they are the profiles of the different personality types towards finance.

The poor-minded… Kiyosaki has put into perspective the correlation between the way they think and their financial circumstance. The poor minded don’t necessarily have to be poor in terms of the amount of money they have at the moment (although they most certainly will be later on in life). They approach their decisions with a scarcity mentality, indulging in creature comforts the moment they come across money.

On a psychological level, they look at these indulgences that are readily available to the wealthy as milestones in their life since they rarely have the money on hand to indulge on a regular basis. These people often reach their fifties with very little saved, making around $40k-$60k a year. At that age, they’ve come across the realization they have nothing saved and struggle to put away $50 a month. Basically, they lack foresight.

The saver-minded is what what a vast majority of the population aspire to be. They’ve had it drilled into their minds that the most sensible, honorable, and righteous way to approach life, like so many before them, is to go to school and get a good job. Typically they put away around 10% of their paycheque towards savings for the future. Oftentimes, these are the people who reach retirement age and find themselves clipping coupons and living a meager lifestyle. So, what happened?

Like the poor-minded, savers have a scarcity mentality as well, but the focus of the scarceness isn’t towards life’s indulgences, but towards their money. They have a set lifestyle and fear making changes that would put their money at risk. Despite this being what many people work towards, most are unsuccessful, unable to break away from their poor mindedness.

The rich-minded statistically save and invest more than 50% of their income. The constantly invest and reinvest. They spend many years eating instant ramen and very rarely go out. The major difference here is that the rich-minded don’t look at wealth as a tool to achieve a lifestyle. To the rich-minded, accumulating wealth IS the lifestyle. Ironically enough, foresight is not their guiding principle. They don’t accumulate wealth to save for a future lifestyle. They accumulate wealth because of the lifestyle itself and the benefits are a side effect of this.

Which One Are You?

Making a distinction between the three isn’t so important as understanding what type of person you are in respect to the type you want to be. There’s nothing specifically wrong with any of them apart from whether or not they fulfill the life you want to live.

If you want to have a better idea of where you might be, I strongly recommend you pick up a copy of Rich Dad Poor Dad. It goes into this in much more detail. Of course there are many more variables to life and to your personality type than what I described, so have a look and see for yourself