Chapter 7
Lesson 7: Overcoming Obstacles
Like I said yesterday this second half of the book is more mindset, less technical. Nonetheless, I found this part very interesting because I believe many of my friends, and me to some extant, fall into a bucket where we are somewhat financially literate but our assets columns may not be growing as quickly as one would think. Robert points out what he thinks these reasons may be but can be generalized as, “The Primary difference between a rich person and a poor person is how they manage fear.”
5 Main reasons why financially literate people may still not develop abundant asset columns:
- Fear
He quotes Fran Tarkenton, former NFL quarterback, “Winning means being unafraid to lose.”
He points out that some people are so afraid of losing that they never participate in anything, and thus never are able to learn. While I’m sure Fran Tarkenton hated to lose he wasn’t afraid of it. Whether that be with investing or acquiring any other type of skill. For example if you want to be a master woodworker you’ll never become that by just sitting there thinking that you don’t want to do it because you might screw up. He goes on to say, “I’ve never met a rich person that hasn’t lost money investing.”
Most people:
PAIN OF LOSING > JOY OF BEING RICH
2. Cynicism
One of my big takeaways from this book is that most poor people just criticize decision instead of analyzing it themselves. There are a lot of chicken littles that will tell you all the reasons your investment or decision are a bad idea, but you need to be able to sift through the noise. Remember anyone can give you their opinion; talk is cheap. Also one needs to look at who is critiquing/criticizing your decision and ask yourself if they’re the type of person you may want to listen to.
“It often takes great courage to not let rumors and talk of doom and gloom affect your doubts and fears.”
3. Laziness
Most common form of laziness: laziness by staying busy
In my eyes this was kind of saying you have a hard time facing the truth. If there’s something you really need to work on you should prioritize it instead of scheduling things instead of it, so that you’ll be able to tell yourself, “I’m busy right now.”
This part caught me off-guard because he talks about a healthy amount of greed to kickstart your journey and get you out of inaction. “One needs a little greed.”
Ask yourself, to jumpstart:
- What do you really want?
- What would I do if I didn’t have to work?
- What’s in it for me?
4. Overcoming Bad Habits
Our lives are a reflection of our habits. He preaches on the best practice of paying yourself first. I immediately thought of Richest Man in Babylon and Robert even mentioned it here, as one of laws of gold is a part of all you earn is yours to keep.
As easy as this sounds I actually haven’t been doing the best job of it lately. I sold some of my assets to pay for bills which he is strictly against. I normally wouldn’t do that but after quitting my job a couple months ago I decided to sell some stock to increase my buffer. He says instead of liquidating anything you should think creatively to create an asset that will pay those bills for you. By paying yourself first and not rushing to pay your bills you’ll be forced to act to get more income or setup an asset.
5. Arrogance
Choose to analyze instead of criticize. Don’t think you know everything. And I’d like to add in a part from Ray Dalio’s Principles book that says it nicely, and I’m paraphrasing, instead of thinking that you are right ask yourself how do I know I’m right?