Money Talks, The Tentmakers

The 90/10 Rule of Money and You

The 90/10 rule of money was made popular by Robert Kiyosaki through this book “Rich Dad’s Guide to Investing: What the rich invest in, that the Poor and the Middle Class do not!” The 90/10 rule of money essentially states that 90 per cent of the people make 10 per cent of the money and 10 per cent of the people make 90 per cent of the money.

It also applies to debt. 10% of the borrowers in the world use debt to get richer – 90% use debt to get poorer.

I don’t know if the numbers are exact but it rings true. Of course, there are other numbers out there. The occupy movement was a mass revolt of the masses (the 99%) against the rich (the 1%) who make most of the money. There is also the 80/20 Rule also known as the Pareto Principle.

In virtually every industry, few people make most of the money. The principles of democracy do not hold when it comes to money. The minority carries the vote. He who has the gold makes the rules. This includes influencing the government that the majority voted in.

The issue is not which number is closest to reality. It has nothing to do with you really. Like the saying goes, “What has that go to do with the price of tomatoes?” The fact is a small minority of people make most of the money, leaving the majority to make do with the leftovers.

person holding coins
Photo by rawpixel.com on Pexels.com

The issue is:

Which side of the divide are you currently on?
Which side of the divide do you really want to be on?
What can you do about it?

Chances are you on the popular side and would surely want to cross over, but it seems like mission impossible. You may even know what you need to do but are too fearful to attempt it or you might have made a series of unsuccessful attempts and finally concluded it is not for you. Few things are as frustrating as feeling stuck in one spot without a way out. This can last for years. I have been there several times. It is a familiar bus stop.

Making the crossing from 90 to 10
When you are in this place, working harder is hardly the answer. You are simply doing more of the same thing and wearing yourself out in the process. Like a car stuck in a ditch, working harder is simply spinning wheels, digging yourself deeper.

What you need is higher horsepower and traction. You cannot get yourself out of a hole using the same mind-set that dug you in. You simply have to upgrade. A weightlifter simply cannot move to the next weight class by lifting heavier weights. He needs to work to build more muscle strength before attempting weights outside his normal range.

You can’t run ahead of your mind. If you are afraid of taking risks, you will always pull back when you face risks higher than what you are comfortable with. Your risk tolerance puts a level to your level of returns as high returns go with high risk. You need to do an inner work on your self to be able to make the move outside your comfort zone.

There are several things that come into play here. The key one is the size of your dreams and how badly you want them. It is the hunger that will propel you to take the actions you need to take to make them happen. It goes beyond doing your best. Your best often lies within the confinement of your comfort zone. You have to do what is necessary, which will often stretch you. One thing that can feed that hunger is pain and frustration with the status quo. When you get to the place of enough is enough, you are ready to move mountains out of your way to move forward. The stronger the emotion, the more powerful the drive.

Keep learning, keep growing

The work of personal development is private and ought to be continuous. You need to find out what works for you. It is essentially stepping out of your comfort zone. It starts by upgrading your mind-set, letting in new information, replacing old paradigms with new ones. This involves one of my favourite mantras – ‘go where you have not gone before, do what you have not done before’. Keep it moving.

If you keep moving, growing and stretching, before long, you will find yourself outside your comfort zone. Being a new person enables you to think new thoughts and take new actions which bring new results. When your vision is crystal clear and you are fully committed to doing whatever it takes, you soon leave the masses behind and make the crossing from the 90 to the 10.

Happy Independence Day!!!

Culled from:
Financial Freedom Inspiration

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