What Distinguishes Investor Mindsets From Consumer Mindsets?Oct 03, 2023
Your primary purpose as a real estate investor is to build generational wealth. Generational wealth is quantified through the accrued assets you possess that can be passed onto your children or grandchildren. Real estate properties are amongst the greatest examples of generational wealth assets.
While there’s no cookie cutter formula to become a successful real estate guru, there is one commonality shared amongst almost all successful investors. That commonality is an investor mindset that is completely distinct from a consumer mindset.
What is an investor mindset, you might ask, and how is it distinguished from the more common consumer mindset? Follow along with this quick overview, and you can use these insights to help create your own winning mindset.
What is a consumer mindset?
Before diving into tips that will help you create and sustain an investor mindset, it will benefit you to first understand the distinctions between a consumer mindset and an investor mindset. Let’s begin with the consumer mindset.
A consumer mindset is a series of passive behaviours and attributes shared amongst the majority of the population. These behaviours include common conducts such as relaxing, doing activities for pleasure, enjoying content, spending time with friends or family and, especially, purchasing products.
Consumer mindsets form the basis for circular consumption systems. Circular consumption systems describe consumer spending on national or international levels. Collective consumer spending is one of the pillars of economic growth for nations all over the world.
What is the disadvantage of a consumer mindset?
96 percent of the population shares a consumer mindset, and there’s nothing wrong with that. Consumer mindsets trigger mass consumer spending that is vital to the economic growth and prosperity of societies everywhere.
However, on an individual level, there is one notable disadvantage to a consumer mindset. The consumer mindset exchanges time for money. What does that mean? Well, think about it.
Time is the most valuable resource we have in this world. Phrases like “there’s never enough time,” “time is not on my side,” or “I’m running up against the clock” are colloquial sayings for a reason. Time is in limited supply; it’s how you use the time you have that separates people with consumer mindsets from people with investor mindsets. Another way of putting it; regardless of whether you are Jeff Besos, a construction worker, politician or a business owner, what is common to all is that they all have the same 24 hours in a day!
96 percent of the population will trade that most valuable of all assets, which is time, for a small influx of money. They exchange something that is extremely valuable for something that is deemed less than the value of time. Why? You can always make money, you can’t make more time. That is the trap of falling into and remaining within the consumer mindset.
What is an investor mindset?
The remaining 4 percent of the population share what’s known as the investor mindset. Someone with an investor mindset understands the notion that time is the most valuable of all assets. They understand the true value of owning one’s time, and they’re willing to sacrifice a little bit of money to retain more of their own time.
Put more succinctly, people with investor mindsets actively buy more time from people with consumer mindsets. People who have investor mindsets choose to use their limited time and build foundations to create generational wealth.
Think about it. Everyone shares the same 24 hour clock on a given day. During that limited window of time, most people choose to invest time into working mundane jobs and calculating how they’re going to pay their bills.
What separates investors from consumers?
People with investor mindsets own their time and invest it into productivity. Examples of owned productivity include things like:
- Consuming knowledge about growing wealth
- Researching investment opportunities
- Negotiating investment deals
- Networking with like-minded investors
- Reinvesting capital returns into new wealth portfolios
The common theme in all those examples is using your limited available time to create the building blocks for generating wealth. It doesn’t happen overnight, and it may seem like a daunting undertaking if you’re just shifting into the investor mindset.
Help simplify your journey by breaking down the big ticket items on your journey into smaller milestones. If you want to consume knowledge about growing wealth, select one book to read from a published successful investor. If you want to research investment opportunities, read about trends in the real estate industry. Start small and accumulate more knowledge that will help you learn how to own your time.
3 secrets to building a winning investor mindset
Establishing an investor mindset is no easy feat, but it is achievable through discipline, focus, and perseverance. As you begin your journey to create a winning investor mindset, here are the three biggest secrets you need to become a successful investor.
1. Understand the value of owning other people’s time
You’re already familiar with this secret. The vast majority of the population will sacrifice their own time in exchange for a fixed amount of money. You don’t want to be like the masses; instead, you want to own time and invest it back into productivity.
2. Recognize how to make money work for you
People with consumer mindsets sacrifice their own time for money. The majority of people work long hours in mundane jobs in exchange for paychecks that transcribe hourly or salary earnings. What are you earning? What do you value your time at? Are these amounts the same? Consumers can make a living this way, but it’s very difficult to earn wealth and freedom. Why? Not everyone is careful to set aside funds for a rainy day, and, because we do not have a crystal ball, we don’t know how much to set aside for the future (not including inflation) for things such as emergency health crises, retirement, future weddings, grandkids, even day to day expenses, not to mention we won’t know the political arena of the future. This is why we are finding many people having to work beyond retirement age.
People with investor mindsets have the opposite approach. They ensure that money works for them, which is a HUGE difference from the consumer mindset.
When you’re building a path towards wealth, ask yourself one question. Are you working for money, or is money working for you? When you make money work for you, money becomes a tool to build wealth instead of a master that controls your use of time.
Look at every opportunity to use your time as a chance to make a return on your investment. Keep this mindset, and every method by which you use your time is productive. If time is money, then think of every second as a dollar - how will you spend that dollar? If you’re a consumer, that dollar is gone forever. If you are an investor, that dollar becomes an opportunity to create another dollar.
3. Use the money that you have to buy investments
The final secret to building a winning investor mindset is to adjust the way that you look at the world. Specifically, think about the ways that you use and spend your money.
People with consumer mindsets seek instant gratification by purchasing things to boost a dopamine hit in their brains. Some consumers are willing to willingly enter into debt to purchase those items and achieve that gratification in their minds.
People with investor mindsets use their money to buy investments. They look for investments that yield cash flow, typically in the form of businesses, real estate, or other dividend-paying assets. As dividends come in from those investments, investors take their earnings and reinvest them back into more wealth-generating opportunities.
Consumers choose to buy stuff, such as cars, big screen TVs, and other commodities first. Investors choose to delay those gratifying purchases until after they build their successful investment portfolio.
Join the ultimate real estate investment platform and build your winning investor mindset
An investor mindset is what separates the wealthy from the rest of the population, the successful from the struggling. Building a winning investor mindset gives you the means and the confidence to create generational wealth for your family to inherit.
If you’re ready to build a winning investor mindset, and you want to create the pillars for generational wealth, join the ultimate real estate investment platform. As a member of our community, you’ll learn practical tips on how to establish independence, financial security, and the freedom to transform your dreams into your way of life!
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