Secrets of the Millionaire Mind

DECLARATION: 
Place your hand on your heart and say...
“I always think ‘both.’ ” 
 
Touch your head and say...
“I have a millionaire mind!” 
 
MILLIONAIRE MIND ACTIONS
1. Practice thinking and creating ways of having “both.”
Whenever alternatives are presented to you, ask yourself, 
“How can I have both?”
2. Become aware that money in circulation adds to
everyone’s life. Each time you spend money, say to 
yourself, “This money will go through hundreds of
people and create value for all of them.”
3. Think of yourself as a role model for others—showing
that you can be kind, generous, loving, and rich!
Wealth File #13
Rich people focus on their net worth.
Poor people focus on their working income.
 
When it comes to money, people in our society typically ask, 
“How much do you make?” Seldom do you hear the ques-

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tion “What is your net worth?” Few people talk this way, ex-
cept of course at the country club.
In country clubs, the financial discussion almost always 
centers around net worth: “Jim just sold his stock options; he’s 
worth over three million. Paul’s company just went public; he’s 
worth eight million. Sue just sold her business; she’s now 
worth twelve million.” At the country club, you’re not going to 
hear, “Hey, did you hear that Joe got a raise? Yeah, and a two 
percent cost-of-living allowance to boot?” If you did hear that, 
you’d know you’re listening to a guest for the day.
WEALTH PRINCIPLE:
The true measure of wealth is net worth,
not working income.
The true measure of wealth is net worth, not working in-
come. Always has been, always will be. Net worth is the fi-
nancial value of everything you own. To determine your net 
worth, add up the value of everything you own, including your 
cash and investments such as stocks, bonds, real estate, the 
current value of your business if you own one, the value of 
your residence if you own it, and then subtract everything you 
owe. Net worth is the ultimate measure of wealth because, if 
necessary, what you own can eventually be liquidated into 
cash.
Rich people understand the huge distinction between 
working income and net worth. Working income is important, 
but it is only one of the four factors that determine your net 
worth. The four net worth factors are:

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1. Income
2. Savings
3. Investments
4. Simplification
Rich people understand that building a high net worth is an 
equation that contains all four elements. Because all of these 
factors are essential, let’s examine each one.
Income comes in two forms: working income and passive 
income. Working income is the money earned from active 
work. This includes a paycheck from a day-to-day job, or for 
an entrepreneur, the profits or income taken from a business. 
Working income requires that you are investing your own time 
and labor to earn money. Working income is important 
because, without it, it is almost impossible to address the other 
three net worth factors.
Working income is how we fill up our financial “funnel,” so 
to speak. All things being equal, the more working income you 
earn, the more you can save and invest. Although working 
income is critical, again it is only valuable as a part of the entire 
net worth equation.
Unfortunately, poor and many middle-class people focus 
exclusively on working income, out of the four factors. Con-
sequently, they end up with a low or no net worth.
Passive income is money earned without you actively 
working. We will discuss passive income in greater detail a 
little later, but for now, consider it another stream of income 
filling up the funnel, which can then be used for spending, 
saving, and investing.
Savings is also imperative. You can earn wads of money.

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But if you don’t keep any of it, you will never create wealth. 
Many people have a financial blueprint that is wired for 
spending. Whatever money they have, they spend. They 
choose immediate gratification over long-term balance. 
Spenders have three mottoes. Their first motto is “It’s only 
money.” Therefore, money is something they don’t have much 
of. Their second motto is “What goes around, comes around.” 
At least they hope so, because their third motto is “Sorry, I 
can’t right now. I’m broke.” Without creating income to fill 
the funnel and savings to keep it there, it is impossible to 
address the next net worth factor.
Once you’ve begun saving a decent portion of your income, 
then you can move to the next stage and make your money 
grow through investing. Generally, the better you are at 
investing, the faster your money will grow and generate a 
greater net worth. Rich people take the time and energy to 
learn about investing and investments. They pride themselves 
on being excellent investors or at least hiring excellent 
investors to invest for them. Poor people think investing is 
only for rich people, so they never learn about it and stay 
broke. Again, every part of the equation is important.
Our fourth net worth factor may well be the “dark horse” 
of the bunch, because few people recognize its importance in 
creating wealth. This is the factor of “simplification.” It goes 
hand in hand with saving money, whereby you consciously 
create a lifestyle in which you need less money to live on. By 
decreasing your cost of living, you increase your savings and 
the amount of funds available for investing.
To illustrate the power of simplification, here’s the story of 
one of our Millionaire Mind participants. When Sue was only 
twenty-three, she made a wise choice: she purchased a home. 
She paid just under $300,000 at the time. Seven years 

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The Wealth Files - 141
later, in a sizzling hot market, Sue sold her home for over 
$600,000, meaning she profited over $300,000. She considered 
buying a new home, but after attending the Millionaire Mind 
Intensive Seminar, she recognized that if she invested her 
money in a secure second mortgage at 10 percent interest and 
simplified her lifestyle, she could actually be quite comfortable 
living on the earnings from her investments and not have to 
work ever again. Instead of purchasing a new home, she 
moved in with her sister. Now, at thirty years of age, Sue is 
financially free. She won her independence not through 
earning a ton of money, but by consciously scaling back her 
personal overhead. Yes, she still works—because she enjoys 
it—but she doesn’t have to. In fact, she only works six months 
of the year. The rest of the time she spends in Fiji, first 
because she loves it, and second, she says, her money goes 
even further there. Because she lives with the locals rather than 
the tourists, she doesn’t spend a lot. How many people do you 
know who would love to spend six months of each year living 
on a tropical island, never having to work again, at the ripe old 
age of thirty? How about forty? Fifty? Sixty? Ever? It’s all 
because Sue created a simple lifestyle and, consequently, 
doesn’t need a fortune to live on.
So, what will it take for you to be happy financially? If you 
need to live in a mansion, have three vacation homes, own ten 
cars, take annual trips around the world, eat caviar, and drink 
the finest champagne to enjoy your life, that’s fine, but 
recognize you’ve set your bar pretty darn high, and it may take 
you a long, long time to get to a point where you’re happy.
On the other hand, if you don’t need all the “toys” to be 
happy, you’ll probably reach your financial goal a lot sooner.
Again, building your net worth is a four-part equation. As 

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an analogy, imagine driving a bus with four wheels. What 
would the ride be like if you were driving on one wheel only? 
Probably slow, bumpy, full of struggle, sparks, and going in 
circles. Does that sound familiar? Rich people play the money 
game on all four wheels. That’s why their ride is fast, smooth, 
direct, and relatively easy.
By the way, I use the analogy of a bus because once you are 
successful, your goal might be to bring others along on the 
ride with you.
Poor and most middle-class people play the money game on 
one wheel only. They believe that the only way to get rich is to 
earn a lot of money. They believe that only because they’ve 
never been there. They don’t understand Parkinson’s Law, 
which states, “Expenses will always rise in direct proportion to 
income.”
Here’s what’s normal in our society. You have a car, you 
make more money, and you get a better car. You have a house, 
you make more money, and you get a bigger house. You have 
clothes, you make more money, and you get nicer clothes. You 
have holidays, you make more money, and you spend more on 
holidays. Of course there are a few exceptions to this 
rule...very few! In general, as income goes up, expenses almost 
invariably go up too. That’s why income alone will never 
create wealth.
This book is called Secrets of the Millionaire Mind. Does