Jaspreet Singh is the well-known financial personality who founded “Minority Mindset,” which is based on his belief that only a minority of people take the right steps to generate real wealth. In a recent video on his YouTube channel, Singh directly spoke about the main reason why most Americans will never be rich and offered suggestions on how you can improve your financial position.
Here are some of the highlights.
Most Americans Are Trying To Look Rich Instead
In Singh’s view, the reason that most Americans are not rich is that they are trying to look rich instead of taking the steps to actually become rich. In other words, they are spending their money on physical goods that seem to indicate wealth — what Singh refers to as “dumb things” — rather than generating the money that will make them legitimately rich.
Singh cites some statistics to back up his opinion. For starters, according to the Fed, 28% of adult Americans have no retirement savings at all, and 53% have less than $10,000 saved. This is even though Americans earn tens or even hundreds of thousands of dollars of income per year. Yet, 50% of Americans play the lottery every year, credit card debt is at record levels, and over 100 million Americans have car loans, with an average new car payment of about $725 per month.
All of these statistics tell Singh that Americans have an obsession with credit cards and debt rather than generating enough income to afford their lifestyles. According to Singh, if you can’t afford things, you shouldn’t be buying them. Rather than going into debt for five, six or even more years to pay off a flashy new car, you should be paying cash for a less glamorous vehicle. Otherwise, you are simply “showing off” wealth that you don’t even have.
How Do Wealthy People Act Differently?
Rather than using your income to pay for “dumb things” — discretionary items like Rolex watches or luxury vehicles — wealthy people put their paychecks into assets. Over time, those assets then generate regular income and/or capital appreciation that the wealthy can then use to buy the “dumb things.” In other words, rather than simply spending all your money in an endless cycle of earning and spending and earning and spending, wealthy people earn, invest, then use their investments to fund their lifestyles.
Singh isn’t naturally opposed to buying “dumb things,” but he stresses that you shouldn’t be spending “your” money to own them. Rather, your investments should be financing everything. In Singh’s view, the true definition of “financial freedom” is the ability of your passive income to cover all of your discretionary expenses. If the money isn’t coming out of your own pocket directly, then Singh says you should feel free to spend as you wish. He believes that is what it means to be wealthy.
What Does Singh Say Is the Path to Wealth?
For Singh, financial education is the key to becoming wealthy, but unfortunately it’s not commonly taught in America. However, blaming others is not the way to make things better. Rather, you have to take responsibility and manage your own finances.
Once you get financially educated, you can understand how the system works. As Singh describes it, banks and credit card companies are busy trying to get you to spend money you don’t have so that your money flows to them instead of to your own pocket. To become rich, you must direct your money to investments — and ultimately to your own bank account — instead of paying it out in the form of fees or finance and interest charges to financial services companies.
Once you understand the system in this way, Singh hopes Americans will learn to only buy things that they can afford and direct their money toward cash-generating investments rather than banks. In other words, your money should go toward assets rather than liabilities.
How You Can Apply Singh’s Advice to Your Own Financial Life
In other “Minority Mindset” videos and blog posts, Singh stresses that you don’t have to mimic the exact way he builds wealth to succeed — but you do need to master the basic concepts.
He emphasizes that while real estate is his preferred method of investment, as long as you are owning assets that can put cash in your pocket, it doesn’t matter if you generate wealth through stocks, bonds, real estate or something else. To Singh, what’s more important than the specific instrument you choose is that you stop trying to “act” rich by spending your paycheck on flashy cars and expensive watches, and rather own assets that pay for those things without you having to dip into your own capital.
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