Section 2: Building Money Mindsets💲

<aside> 🗒️ In this section: Before we get into building wealth, it's important to get your mind right. To help get you started, we've broken it down into the 4 key mindsets to build 🧠🧘🏼 .

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1. "Actually, I'm Good" 😎

<aside> <img src="https://s3-us-west-2.amazonaws.com/secure.notion-static.com/debff0ed-2739-4ec4-bb9d-00755b46889a/Favicon-simplify.png" alt="https://s3-us-west-2.amazonaws.com/secure.notion-static.com/debff0ed-2739-4ec4-bb9d-00755b46889a/Favicon-simplify.png" width="40px" /> A major 🔑 to good personal finances is learning to live within your means, or the "Actually, I'm Good" mindset.

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"Actually, I'm Good" is about being happy with less stuff. Sure, that new iPhone, new pair of jeans, or bigger apartment might make you feel good and impress your friends. Instead, use that money to save and invest to grow your wealth over time.

This may not sound cool right now, but trust us - it's worth it. It will allow you to buy much more valuable things later, including the freedom to do what you want. Btw, this doesn't mean you should never splurge - the trick is to balance when you do and when you can save $$ instead.

<aside> <img src="https://s3-us-west-2.amazonaws.com/secure.notion-static.com/791736ea-8e9b-4654-acde-0838bf8eb8ec/Favicon-simplify.png" alt="https://s3-us-west-2.amazonaws.com/secure.notion-static.com/791736ea-8e9b-4654-acde-0838bf8eb8ec/Favicon-simplify.png" width="40px" /> This mindset will lower your expenses by making you ask yourself "Do I really need this?" - if the answer is "Actually, I'm good", you know what to do!

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<aside> <img src="https://s3-us-west-2.amazonaws.com/secure.notion-static.com/b548f147-57d0-433b-be6d-8c224b1f5dbc/Favicon-simplify.png" alt="https://s3-us-west-2.amazonaws.com/secure.notion-static.com/b548f147-57d0-433b-be6d-8c224b1f5dbc/Favicon-simplify.png" width="40px" /> Want to know a secret? Most wealthy people continue this mindset even when they have lots of $$ to stay wealthy.

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Check out Section 4 on lowering expenses and Section 8 on lowering debt.

2. "Pay Yourself First" 🥇

Another important mindset to learn is "paying yourself first":

<aside> <img src="https://s3-us-west-2.amazonaws.com/secure.notion-static.com/9c42a2c5-7ea7-44fc-9892-49a00cfe100a/Favicon-simplify.png" alt="https://s3-us-west-2.amazonaws.com/secure.notion-static.com/9c42a2c5-7ea7-44fc-9892-49a00cfe100a/Favicon-simplify.png" width="40px" /> First is underlined because you paying yourself (by saving) right off the bat before paying for other stuff (food, rent, credit card bills, etc).

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Building this habit helps make sure you always save and are steadily increasing your "stash of cash". Check out Section 3 on How to Budget and Section 6 on Savings.

https://s3-us-west-2.amazonaws.com/secure.notion-static.com/eedba728-9e10-44e9-b143-8a2e23ac261d/PayYourselfFirst.mp4

3. "I'm Worthy of Wealth" 🙌

<aside> <img src="https://s3-us-west-2.amazonaws.com/secure.notion-static.com/2ab3457c-6b4a-4076-bddb-d61be385781b/Favicon-simplify.png" alt="https://s3-us-west-2.amazonaws.com/secure.notion-static.com/2ab3457c-6b4a-4076-bddb-d61be385781b/Favicon-simplify.png" width="40px" /> Half the battle of building and maintaining wealth is developing a mindset that this is something YOU are capable and worthy of. The good news is that you are! 💪💪🏽💪🏿

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<aside> <img src="https://s3-us-west-2.amazonaws.com/secure.notion-static.com/d7877081-79f5-456a-9d5c-1eafc95d8886/Favicon-simplify.png" alt="https://s3-us-west-2.amazonaws.com/secure.notion-static.com/d7877081-79f5-456a-9d5c-1eafc95d8886/Favicon-simplify.png" width="40px" /> Developing this mindset and building wealth will take time and a long-term mindset, so its important to get started early (aka NOW).

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Wealthy Mindset

4. Labor vs. Capital (👷 vs. 💰)

Let's first define what these two buckets mean:

Labor - You're in this bucket if you trade in your time for money (have a job), whether you make minimum wage, you're a professional athlete / entertainer making millions of dollars, or somewhere in between.
Capital - You're in this bucket if you use money (capital) to make more money for you over time. This typically takes the form of investments, whether it is owning pieces of businesses (stocks), real estate, or other assets that you believe will go up in value. This mindset allows you to make money while you sleep.

Understanding the difference between these buckets is critical towards amassing wealth for you, your family, and future generations. At a minimum, you want to be in both buckets (making money from your job, but also investing in assets over a long period of time that will build wealth). In the optimal scenario, you want to only exist in the capital bucket where your let your money make money without having to sacrifice your time (the F.I.R.E movement is all about this).

Unfortunately, the majority of people are only in the "labor" bucket and are either unable or unaware of how to access the "capital" bucket. This gap is one of the main reasons we see such a wide divide of wealth and opportunity inequality across society ☹️. One interesting policy that has been discussed to help address this is the introduction of a "birth dividend", which sets aside $2,000 for every kid when they're born, invests it in the stock market, and can only be accessed at age 65.