Vistage Speaker Steven Snyder flew in from Hawaii this month to speak to my 3 Vistage groups. One of his messages was the difference between prosperity consciousness, break-even consciousness, and poverty consciousness. According to Steven, most people live in break-even consciousness. Prosperity has nothing to do with income. You can have a very small income and still feel prosperous. And you can have a very large income and not feel prosperous.
Poverty consciousness is where there is never enough money, and the bills are always overdue. If you give someone with poverty consciousness a large amount of money, they will soon end up with nothing to show for it and may even end up deeply in debt. We often hear about lottery winners who blow the entire amount. Saving and investing are unknown concepts to them. I suspect we all know people with this mindset. Perhaps some of your employees exhibit this behavior.
Prosperity consciousness is where money is handed effectively and there is always some to invest or save. If you take away everything from a person with the prosperity consciousness, they will likely rebuild their resources and return to prosperity. They know how to save and invest their money, no matter how little they have.
Break-even consciousness is the place where most people live. Whatever comes in is what goes out. If someone with this mindset makes a little extra money, they spend a little extra. Their bills always seem to get paid, but they have nothing left to save or invest. They can never quite get ahead.
How do you attain prosperity consciousness or teach it to others? Steven suggests paying yourself first. For every dollar that comes in the door, decide how much you are going to save and invest, and how much you are going to give to charity. Strive to save or invest at least 10% of every dollar that comes in the door. Put it into a savings account or other type of investment. Then take a portion of that money and give it to charity. You will soon realize that you are able to save and invest more than you ever anticipated. You can save for emergencies as well as college or retirement.
And giving to charity not only benefits the charitable cause, it makes you feel good about yourself. Even if you can only save $1 and give pennies to charity, it’s a good start. Once you get into this habit, it becomes easier to increase the amounts. Pretty soon, you’ll be living a more prosperous and philanthropic life.
As a leader, you can share these concepts with your employees to help them learn how to be prosperous. Employees who worry less about money often perform better at work. So your company will benefit as well!
Great thought, great lesson.
What would you advise small and midsize business owners that for years reinvest all their earnings in the business?
Fritz, I always recommend diversification, no matter how large or small the business.