7 things everyone should understand about money

• Steve Siebold, Contributor
 

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April is the official National Financial Literacy Month. Of course, it’s always important to stress financial literacy no matter what time of year it is and regardless of your current financial situation. Financial literacy is so important because money is one of life’s necessities, yet so many people continue to unnecessarily struggle with it.

There’s quite a bit of advice out there on the best ways to be more financially literate: Don’t spend too much. Don’t run up credit card debt. Save more. Understand how interest rates work. Live below your means. The list goes on and on. Much of this advice is actually pretty good, but it’s not going to make you rich.

This financial literacy month, expand your consciousness and level of understanding about money through the eyes of self-made millionaires.

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Study the differences in thinking between the middle class and the wealthy

Study how self-made rich people think about money and follow their lead. Study how the middle class thinks about money so you can avoid falling into the same trap. Be careful: There are a lot of well-intentioned people in the middle class who think they know about money, and while they have your best interest at heart, they’re clueless when it comes to creating wealth.

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Be obsessed with success instead of money

Most people think the rich are obsessed with money. While that might be true sometimes, most of the self-made wealthy are obsessed with success. Money is nothing more than a gauge the wealthy use to see if they’ve achieved their latest target. Business and life are simply a game and the truth is self-made millionaires are really addicted to winning.

See money as an infinite resource

The average person believes there’s a limited amount of money, and they need to struggle and fight for their share before someone else gets it. They live in a world of fear and scarcity that says money is hard to make and even harder to keep. The wealthy see money as an infinite resource. If they need more, they simply use their mind to create more. The world of the self-made rich is one of unlimited abundance.

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Solve a problem

The fastest way to make money is to solve a problem. The larger the problem the more money you make. What are the biggest problems in your industry or around your area of expertise? Can you find a way to solve one of these problems, or at least simplify it? Creative thinking that solves problems is the highest paid skill in the world. The more problems you solve, the richer you become.

Know when to use logic vs. emotion

The problem people run into when it comes to money is they blend logical thinking with emotion. Logic should always be used when it comes to make financial decisions. Emotion should be used to motivate you. Logic means not buying the expensive sports car. Emotion is dangling the expensive sports car in front of you like the proverbial carrot in front of the rabbit to make you work harder.

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Be comfortable being uncomfortable

Most people crave comfort, be it physical, psychological, or emotional comfort. Becoming a millionaire isn’t easy, and the need for comfort can be devastating. There’s a price to pay for getting rich, but if you have the mental toughness to endure temporary pain, you can reap the harvest of abundant wealth.

Believe in self-reliance

Do you believe someone else should support you financially? The self-made wealthy believe in self-reliance. They believe getting rich is a choice. They believe every citizen in a free market economy has the opportunity to become wealthy. Make a decision to increase your level of self-reliance in all areas of your life. It’s the only road to true freedom, financial or otherwise.

Flickr/Erich Ferdinand

Never stop learning

While the rich respect the power of formal education, they usually don’t associate it with building a financial empire. Many of the self-made rich have amassed their wealth through the acquisition and subsequent sale of specific knowledge. Decide today to become a life-long student and take control of your own self-education.

I’ve been rich and I’ve been poor, and I can tell you that life with money is a lot better than life without it. Money certainly doesn’t dictate happiness, but it sure makes life easier. This Financial Literacy Month, make the decision to take control of your finances, increase your net-worth and change your life forever.

Steve Siebold is the author of "How Rich People Think," and a self-made multi-millionaire who has interviewed more than 1,200 of the world's wealthiest people.