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How to create wealth by controlling your number one money block

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Want to create wealth? Then you will have to control your number one money block – emotions.
 
According to scientists, emotions rule the brain’s decision-making pathways. This is not to say that we are illogical beings. It’s just that emotions play a very big role in our lives, more so than pure intellect.   
The problem comes in when emotions become the number one reason for making important investment and/or financial decisions.
 
Emotions can stifle wealth creation in a number of ways. Here are two good examples:  
  1. Emotional spending is a big problem. People are programmed to believe that they shop out of ‘need’ rather than ‘want’. It’s about instant gratification and excessive spending to relieve boredom or stress or to maintain one’s social image for example. Emotional spending is one of the major reasons why millions of people are in serious financial trouble today. If you cannot control your spending, how on earth can you expect to create wealth?
  2. Ever receive a hot tip from the media or friend to buy or sell a particular investment? During good times, people tend to listen to friends about how much money they made investing in certain assets, whereas news about a bad economy or underperforming company brings out the fear of losing money. This is a sure way of destroying wealth. By the time you receive the ‘tip’ or media report, it’s too late. Never make an investment or financial decision without having done your homework. A hot tip is a bad idea, and if you do not understand what makes an asset tick (be it shares, a franchise, property or retirement annuity) leave it alone until you have a better understanding.
Wealth creation without emotion is easier said than done. We are human beings, not robots. Our emotions are going to impact every facet of our lives. Just understand that accumulating assets on the basis of emotions can be disastrous.
 
So how does one create wealth without tripping up on your emotions? The key rests with answering three questions:
  1. What return will the asset or business generate?
  2. What are the risks associated with the asset or business?
  3. Is the business or asset’s risk/return profile compatible with my wealth creation strategy?   
If you’re able to run the numbers, you can easily answer these questions and create wealth.
 
And if you understand what you are buying, you’re well on your way to achieving financial freedom.

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