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Mindset--Owners Vs. Employees


Building Wealth is a mindset first before a bank account balance or net worth. From my readings, research and observations of people around me, there are essentially two mindsets: The "employee" mindset and the "owner" mindset.


The employee waits to be told what to do. They wait for the opportunities to come to them. When it comes to money, they wait to have it to then learn about it and manage it. By the time they have the "correct" amount to start the learning process, their lives are far too hectic for them to learn how to manage it themselves and so they delegate the responsibility to someone else. That someone else (broker, advisor, etc.) charges fees and less of the gains go into the pocket of the individual.


An employee mindset is guilty of buying liabilities first and is also guilty of thinking the house they own and live in is an asset. The employee mindset is also about educating themselves through the formal education system, so higher education becomes a priority. And a major expense. The employee will therefore experience a massive amount of debt--student loans, mortgage, credit card. All this debt is to be paid off with one source of income, a job. One income source to pay off three potential sources of debt will pretty much mean that employee could be in debt for the rest of their lives.


Then there is the ownership mindset. An owner owns. They understand that money is simply a vehicle to buy one of two things: assets or liabilities. They of course choose the former and put all their efforts into buying assets with every extra dollar they earn. When starting their journey to being wealthy, owners may start off as employees, earning wages, but they do not have long term plans of staying in the rat race. You will not be able to entice them with higher pay for long because they understand the truth. The truth being that if they stay employees a) they will pay the highest taxes of anyone in the economy and b) they need to build multiple sources of income so that if they lose this job due to a financial crisis or pandemic they will not have to downsize their lifestyle.


Owners are self educators and go getters. They don't wait for opportunities, but create them. They are always adding new skills through self-education for they understand the return on the investment in the formal education system is decreasing every year. Also, there's no need to take on so much debt. Instead they understand how to use debt to their advantage through a rental property perhaps. They see debt as leverage and would rather have a tenant pay it off than themselves. Owners see the house they live in more as a liability than an asset, which is why they hold off on buying a home even when all their employee minded friends say it's a great investment. An owner sees the truth of money and simply ignores this bad information and carries on in their work to build up their assets and self educate.


Now that you know the difference, it's time to take a minute and self reflect. What mindset do you have? It's not about what your net-worth or current job is, but it is more about where you are headed and what you are doing to get there. Are you planning on getting to your future self through the mindset of an owner or as an employee? Remember the barrier between the two mindsets is fluid and you can enter the ownership mindset at any point of the game. It's just question of whether you are willing to take the responsibility of completely changing your mindset. It's time to rewire your entire understanding of the world around you.

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