How to Help Your Employees & Management Teams Steer Clear of Financial Pitfalls and Develop Better Money Management Skills During the Pandemic

Today’s post is extrapolated from Chapter 2 of my book Messages From the Money Masters. 

“Someone’s sitting in the shade today because someone planted a tree a long time ago. Successful investing takes time, discipline, and patience. No matter how great the talent or effort, some things take time.” –Warren Buffett

People are bad at money management for three primary reasons:

• They have a lack of education about how money works and how to manage it.
• Their money mentality and their relationship with money.
• They lack the discipline to learn and incorporate money management skills into their lives.

EDUCATION

I find myself continuously explaining to my clients that there is a distinct difference between your income and your wealth. Most of us use the terms interchangeably, at least when we are thinking about our money. But making money (your income) and accumulating/investing/managing money (your wealth), are two different things. You can have wealth even if you have lost your job and have no money (income). You can be poor even if you have a six-figure income and no savings (wealth). To avoid failure with your finances, you need to learn the difference between the two. Then you need to start learning how to manage both your income and your wealth.

How we think about money expands beyond the differences in income and wealth. It goes to our day-to-day money mentality. You do not have to believe me, look at the lives of many of today's million and billionaires who have started poor and are finishing rich:

Ron Baron grew up in a house so small there was no room for a refrigerator inside, so they stored it on an outdoor porch. To help pay for college, Baron worked as a cabana boy, lifeguard, water-ski instructor and ice cream truck driver. He took $1,000 he saved from shoveling snow, waiting tables, working as a lifeguard, and selling ice cream, and turned it into $4,000 by investing in stocks.

Daymond John is worth about $300 million dollars today, but as a young adult he lived and worked out of his mother’s house. He started his fortune by converting $40 into $800 through making and selling caps. Then he turned that profit into a clothing line FUBU (For You By You) that eventually earned $350 million in sales in 1998. When that business slowed down, John created Shark Tank. He lost $750,000 the first season, but then it took off, making him millions.

Financial guru and master Suze Orman chose to live in a van, work as a ‘tree clearer’ for a tree service and waited tables for seven years — all while living in her van. She had no money to follow her dreams. Her parents couldn’t help her, but customers she’d served for seven years at the Buttercup Cafe pooled their money to help her succeed. Hard work and her toughness, and entrepreneurial spirit led to her success.  

Tony Robbins was not born with a silver spoon in his mouth, either. Yet he now owns a resort in Fiji, travels by private jet, and is an owner of Los Angeles' Major League Soccer team and has an estimated personal net worth of $500 million. His Anthony Robbins company (a company of diverse businesses) makes a combined total of $6 billion a year. He made his first million at age 24. Before that he came from a broken home with a physically abusive mother and worked as a janitor after school to help his family meet expenses. He says he wanted to ‘become rich’ as a child so he could ‘help people,’ and he has done that. 

During the holiday season, The Anthony Robbins Foundation feeds more than four million people annually through its international "Basket Brigade," and provides fresh water to over 100,000 people a day in India, where water-borne disease is the leading cause of death for children. The foundation runs programs to help the homeless, encourage youth leadership, and provide his books and tapes to prisoners.

MONEY MINDSET

People are bad at money management for a lot of reasons, but the experts and I believe one of the most overlooked reasons for people’s failures around money, income, and wealth is their mindset—how they think, and feel about money, and what their beliefs about money are. The five primary kinds of mindsets about money are:

• Poverty Mentality
• Entitled Mentality
• Necessary Evil Mentality
• Scarcity Mentality
• Positive Money Mentality

There are more, and most of us with financial issues have one or more of these mindsets. Do you have a poverty mindset and don’t know it? Millions of people do, and it holds them back more than any other thing they have going on. No matter how much they make, or how they save, they just cannot seem to get ahead. 

You do not have to be homeless, poor or impoverished to have a poverty mentality. There are, surprisingly enough, many millionaires with a poverty mentality. I knew a woman, Sally, who was a multimillionaire. She drove a 30-year old Fiat, never tipped more than a dollar on any meal, even those restaurant meals for a family of six that came to $200 dollars or more. Her house was modest, and the furniture she had when she died was still circa 1965 when she bought it. Her four daughters ran the gamut from penny pincher to wild spender according to, it seemed to me, how she raised each. She was financially strict with the two oldest, who followed her financial style, and more generous with the youngest, who didn’t save or manage money as well as their older siblings. 

TIP: Our money mentality often has little to do with our current financial status, and everything to do with how we were raised around money and what we learned to believe about it.

“Fear and doubt destroy more dreams than failure ever does. Most people don’t live their dreams; they live their fears.” ~ Keith Weinhold

A poverty mentality or mindset (or any mindset really) is simply a collection of beliefs about money—such as: believing that money should not be spent, that opportunities are limited, any risk at all is dangerous. Some of us believe that we should not be generous because any success is temporary and non-replicable. These folks subscribe to a policy of generally remaining in the back of the pack is the safest way to live. Is that depressing or what? I’m not saying spend your money frivolously. But I am saying that your attitude and beliefs about money play a huge role in how you earn, save, spend, invest and most importantly, enjoy your money.

Napoleon Hill, one of my favorite financial masters, said that the single most important thing a person can develop in their lifetime is a positive attitude. “No other trait, not experience, not knowledge will produce as much for you as a positive, enthusiastic attitude. It can create miracles for you. Ninety percent of winning in life,” Hill says, “Is always being excited. The key to staying excited is to lead by example. Happy people attract others like them, and negative, frustrated people do too. Negative people drain your batteries, so practice a positive attitude. Everybody loves to be around positive people. Being a positive person does not happen overnight. It’s okay to get down, discouraged, and depressed, but only as long as you do it for a short time each day, and never in front of others.” Is success that simple? I think it can be.

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I share specific tips and guidelines for strengthening and improving your money mindset throughout my book and in corporate customized workshop training.  What you do now for yourself, your employees and management team during all the changes brought about by COVID-19 will help you sow the seeds of increased profitability, even during the pandemic. Thanks for reading. Stay safe, healthy and happy, and be sure to get your copy of Messages From the Money Masters today! Available in both e-book and paperback.

To learn more about our corporate “Money Masters” customized workshops, go to:www.jaykemmerer.com