How to Think Like a Billionaire When You’re Broke

By Paul Michael on 24 May 2017 0 comments

It’s not easy being broke. As of 2014, there were almost 47 million Americans living below the poverty line. That’s roughly 15 percent of the population.

To simply tell these people to "start thinking like a billionaire" may seem tone deaf, or even cruel. But it actually is great advice. Millionaires and billionaires, especially those who are self-made, tend to think in a completely different way. It all comes down to a different view of the world. And it’s time to embrace that mindset.

Don't think about the money you don’t have

To illustrate this point, consider the test Dr. Tina Seelig gave her Stanford University students. She challenged them to make as much money as possible in two hours using only $5 of "seed funding" tucked in an envelope. Working in teams, they could spend as many hours as they wanted planning, but once they tore open the envelope, the clock started ticking. The most successful results came from the teams that realized a very important part of the test — namely, that the $5 was a red herring.

Concentrating on the small sum of money put them in a box, so they ignored it, and instead looked at ways to make money from scratch. Some of the ideas were incredible. One team made $650 by selling their time; they sold their three-minute presentation slot to a firm looking to recruit students in the class. Brilliant. Now that’s how a billionaire thinks — looking at the opportunity, not the handicap.

The lesson here is that the money you do not have right now should not, in any way, hold you back. If you don’t have funds, find a way to use what you do have to make money. What can you sell? Is it your time? Is it knowledge? Is it a service? The lack of money in your account should not place a limit on your ideas.

Never say "I can’t afford it." Instead ask "How can I afford it?"

You may have heard it often growing up. "Dad, can I get a new bike?" "No, we can’t afford it." That’s how poor and middle class people often think. They look at their current financial situation, and make a quick calculation. But that’s the wrong approach.

If you need something, or your kid wants something that isn’t just a frivolous whim, don’t automatically say, "No, we can’t afford it." Instead, counter with a question. Namely, "OK … how can we afford that?"

Maybe it’s a new stove, or replacing the old, worn-out car. If you immediately shut down the possibility, you’ll never get it. A billionaire doesn’t place these limits on ideas or dreams. They look into funding sources, ways to create capital, and many other money-generating avenues. And we’re not talking about pulling out your credit card for something you can’t afford and don’t need.

For necessities — or important dreams — it doesn’t matter if the object in question costs $100 or $100,000,000. The process is still the same. How can you afford that? What can you do to make it happen? Start thinking. (See also: How to Come Up With $1,000 in the Next 30 Days)

See change as opportunity

Most of us are afraid of a major life change, be it a job loss, financial obligation, or a move to another state. These are stressful and difficult situations. But a billionaire sees any kind of change, even those most of us would consider negative, as an opportunity.

If it’s a job loss, it has created a glut of free time to use for a new venture. What can you do with that time that could create money in new and exciting ways? Think back to those college students with the $5 challenge. Some of them decided to make money waiting in line for people. They were making $20 a shot. Considering the minimum wage is currently $7.25, that’s almost three times the amount for literally doing nothing.

Fear of change is natural. But fear is a negative response to any situation, and in the long run, it will cripple your thinking and your ability to bounce back. Whatever the situation, take control and think positively. How can you turn it to your advantage? What do you have now that you did not have before this major event happened? Then, run with it.

Every penny saved is a penny earned

Billionaires do not blow money. People have this idea, which comes from a select few who hog the limelight, that the superrich are super wasteful. But they did not become rich by throwing money away.

There is a now infamous anecdote about a billionaire who went into a New York bank asking for a $5,000 loan, and put his Bentley up as collateral. It was approved, and the bank employee parked the car in their underground garage. Two weeks later, the man returned from vacation, and paid back the $5,000, plus the $15.41 it accrued in interest. When asked why he, a rich man, would require such a small loan, he replied "Where else could I have parked my car in New York City for two weeks, for only $15?!"

The story isn't real, but the strategy definitely is. This is how a billionaire would actually think about such a situation. Sure, they can afford the finest parking in the city, but why pay through the nose for it when they can get it for almost nothing?

You can think the same way. What are you paying for, right now, that could be reduced in cost? What ways are there to save money on everyday purchases? From extreme couponing, to haggling and bartering, you have many options available to you.

Time really is money

Donald Trump once stated that he never wastes time. Even when he’s on the golf course, he’s doing business. He sleeps as little as possible, because every moment he’s awake is an opportunity to make money or create something.

Look at the ways you spend your time, and see how it can be maximized to work for you. If you’re on the bus going to work, are you staring out of the window, or reading a book that could teach you a new skill? Do you have hobbies that are productive?

Even playing video games can make you a small fortune, if you record yourself playing and post the videos to YouTube and Twitch. Indeed, the average "pro-streamer" makes between $3,000–$5,000 per month from 40 hours per week of game time. Think about that. They are literally being paid a living wage to play video games. Something that many people believe to be a waste of time has been turned into an income stream.

Consider every detail

It’s been said that billionaires look at the bigger picture. It's often called "the 30,000 foot view," which basically means seeing the layout, but not the houses, driveways, and storefronts. This is, in fact, the complete opposite of how a successful business operator thinks. Yes, the big picture is important at the get-go. But the details are what drives the success or failure of a venture. Often, it’s a small detail that was overlooked that causes something to fail.

Look at your own budget, and lifestyle, with that same eye for details. Are you paying $1 too much for something, especially a monthly bill? Did you examine the contract for your lease? Is there something in it that gives you a chance to save money? Did you get every deal you were supposed to get at the grocery store? Check the receipt.

Back in 2005, a software company hid a $1,000 prize in the terms and conditions of its user agreement. It took five months, and over 3,000 sales, before someone actually read the agreement and claimed the money. Details count. Pay attention to them, and you could see incremental changes that really start to add up.

Remember, billionaires and millionaires may live extravagant lives, but don't let that stop you from thinking the same way they do. It will make you wealthier in the process.

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