Recently, in an article for Business Insider, Siebold shared one of his key insights about wealth. Here's the relevant passage:
Saving is crucial to building wealth, but you don't want to focus so much on saving that you start neglecting earning, which is what rich people focus on.Our parents and grandparents taught us the secret to success is the "Protestant work ethic," which Google defines as "the view that a person's duty is to achieve success through hard work and thrift." This particular concept is Western and relatively modern, but the core idea is ancient and global.
"The masses are so focused on clipping coupons and living frugally they miss major opportunities," Siebold said.
There's no need to abandon practical saving strategies. However, if you want to start thinking like the rich, "stop worrying about running out of money and focus on how to make more," Siebold said.
In his book, Solve for Happy, Mo Gawdat writes:
[My mother] frequently invoked an Arabic proverb that, loosely translated, meant “Eat frugally for a year and dress frugally for another, and you’ll find happiness forever.” As a young man I’d followed that advice religiously ...
[To me that meant] I should study and work hard, save and be willing to defer certain forms of gratification to achieve certain goals.But Siebold suggests the real secret to success is not "work harder and save more." It's "work smarter and earn more."
That has been my experience. I was always an over-achiever and a hard worker. I was always good at managing my finances and making sure I was saving money. But I didn't become wealthy until I focused on what I earned, not on what I saved.
One reason is that focusing on savings creates a scarcity mentality. It causes you to have self-limiting beliefs because you are always thinking about how to do less rather than create more. It's a trick of focus. As Tony Robbins says, "where focus goes, energy flows." You want your energy to be spent on increasing, not decreasing.
It's the need for mental consistency that undermines us. Our mind insists that we either be a Saver (who, it follows, doesn't need to earn a lot) OR an Earner (who, it follows, will always spend a lot). Trying to think of oneself as both a Saver AND an Earner creates an uncomfortable mental condition known as "cognitive dissonance." Yet that's exactly what Siebold is recommending.
I confess that I have been tortured by this mental conflict at times. For me, it generally takes the form of thinking that I have to choose between enjoying life and achieving financial freedom. What rescues me from this trap is a simple phrase my closest friend, Bill, once said to me. I was complaining to him about some scarcity problem when he replied: "Just make more money."
Naturally, my first response was: "How the @#!% am I supposed to do that?!" Later, I came to realize the answer to that question is not what's important. What's important is accepting that "just make more money" is the correct solution to the problem.