7 Wealth-Generating Psychological Tricks

Sure, some people will inherit millions of dollars or win the lottery, but according to a 2017 survey, 88 percent of millionaires are self-made. Only 12% inherited their wealth, implying that the vast majority of people who become wealthy do so through hard work. However, it is more than just hard work that drives their success.

What most millionaires won’t tell you is that they use secret psychological tricks to earn and save more money, and I’ll share the 7 psychological tricks that will make you rich with you!

Trick #1: Making minor decisions

The wealthy understand that small decisions, when compounded over time, can have a large financial impact. Saving money, no matter how much you save, can empower and motivate you in unexpected ways.

For example, saving $5 per day with a 10% compound interest rate would result in a savings of $1,885 after just one year, which may not seem like much. However, if you did this for 40 years, you would end up with $948,611, which is a substantial sum of money to have on hand.

Aside from the ability to accumulate a large financial nest egg by stringing together these small but positive choices, the rich have a sense of control over their financial lives that many people do not have. You see, there are many aspects of life over which you have no control. For example, you don’t have much control over the economy or the job market, and it’s easy to become discouraged when things don’t go your way.

Allow yourself the opportunity to choose something over which you do have control to avoid feeling defeated. Choosing to save is one small step toward gaining control over your financial situation.

Just ask the author of The Power of Habit, Charles Duhigg. “Motivation is triggered by making choices that demonstrate to ourselves that we are in control,” Duhigg writes in his latest book, Smarter, Faster, Better. The specific choice we make is less important than asserting control.”

In other words, it’s not about the five dollars you save or the extra $25 you decide to put toward your debt. The fact that you’re making the decision in the first place is what makes this psychological trick so effective.

Trick #2: Don’t believe in yourself.

What the wealthy understand that the poor do not is that no one is perfect.

To put it another way, the wealthy are more self-aware than their less fortunate counterparts, which is why they employ strategies to reduce their proclivity to self-sabotage.

One method they employ is the use of automatic deductions. For the rich, generating income is often not a problem; however, what prevents people from turning this significant income into a significant net worth is their ability to save.

Even the most responsible people find it difficult to avoid spending money when presented with the opportunity, which is why they prefer to automate the saving process. If you are unfamiliar with automatic deductions, they work as follows: whenever you are paid, a portion of your pay is withheld from being deposited into your primary bank account.

Typically, people will set up a savings account into which the money will be routed.

Many wealthy people take this practise a step further by restricting their access to this savings account, ensuring that the money allocated to this reserve cannot be spent under any circumstances, ensuring that their pool of savings grows over time.

Trick #3: Visualize Your Rich Future Self

What do great athletes, well-known actors, and successful business owners all have in common? Aside from their wealth, the one thing that unites them is their use of visualisation.

Almost any successful person will tell you that you must visualise yourself achieving your goals before you can achieve them in real life, but unfortunately, some people cannot see beyond their current state. Spending $5 on a Starbucks coffee, for example, does not seem like a big deal, and millions of people give away their change every day to fuel their caffeine addiction. However, for those seeking to become wealthy, that $5 can have a far greater significance.

A wealthy person faced with the decision of spending $5 on a premium coffee would most likely consider the long-term cost of the purchase. You can see how a $5 investment today will grow to a $100 investment by the time you retire. You might reconsider that purchase if you thought about it this way, right?

What the wealthy do that the poor do not is constantly ask themselves what the future cost of their spending decisions will be and whether or not they will align with the realisation of their future wealthy lifestyle.

And if you think this visualisation technique is novel, reconsider! Napoleon Hill’s classic Think and Grow Rich, first published in 1937, lays out a step-by-step approach to combining visualisation and action, and millions of people have used it successfully. The first step, according to Hill’s book, is to set your mind on the exact amount of money you want and to be clear on when you expect to receive it. In 1990, Jim Carrey famously tried this technique by writing himself a fake check for $10 million for “acting services rendered” and post-dating it for 1995. He gave himself five years to become one of Hollywood’s most successful working actors, and he was able to cash the check he had written to himself a half-decade before.

In addition to visualising how much money you want to make, Hill recommends determining exactly what you intend to give in exchange for the money you want. After making these declarations, Hill suggested that you close your eyes and visualise yourself living this luxurious lifestyle every day until it becomes a reality. This technique is said to programme our unconscious mind to find solutions to our financial problems and allow us to see resources, people, and events that will assist us in reaching our goal more clearly.

Trick #4: Take your time when making large purchases.

While sleep can help you relax, improve your memory, and boost your mood, most people don’t realise it can also help you make sound financial decisions.

In fact, when it comes to saving money, sleep can be a valuable tool in your arsenal. First, if you don’t get enough sleep, your decision-making abilities suffer, and you’re more likely to engage in riskier financial behaviour.

As a result, a vehicle you would not normally consider purchasing may end up in your driveway. Second, sleep gives you time to think about large purchases.

Taking the evening to sleep on large purchases allows your unconscious mind to process and analyse the information while you’re dreaming.

Trick #5: Only spend cash.

The next psychological trick that wealthy people use to become wealthy is to only spend cash. I’m sure you’ve seen someone pay for an expensive item or a fancy dinner with a wad of cash before, and while your first impression might have been that this person was just trying to show off, there could have been a calculated reason for this behaviour.

Spending money, whether it’s for groceries or a new phone, makes us aware of the monetary impact of our actions.

This is due to the fact that when we pay, we physically hand over cash and see the depletion in our wallet, whereas when you use a credit or debit card, the potential to spend is almost limitless.

Part of the sting we feel when we spend money is caused by a phenomenon known as coupling. When someone pays cash for something, they immediately know how much it costs, which can be painful. When someone pays with a credit card, however, there is a time lag between when they buy the item and when they have to pay for it, making the cost appear less significant.

So, how much more will it cost you to pay on credit rather than cash?

MIT published the findings of a study comparing spending habits when using cash versus credit in 2001. The findings revealed that when using a credit card instead of cash, shoppers spend up to 100 percent more.

Cut up your credit cards and start carrying around more cash if you want to curb your spending and use this psychological trick!

Trick #6: Determine the cost in hours.

The rich’s second last psychological trick for increasing their wealth is to convert the cost of their purchases into work hours. For example, if you earn $20 per hour at your job, purchasing a new $100 t-shirt will take you 5 hours of your time. Unlike the poor, the rich regularly question whether the item they are purchasing is worth the time it took to earn the money to pay for it, or, in this case, is that shirt really worth 5 hours of work time?

When you begin to view your purchases in this light, you will notice a significant shift in your perception of the value of not only your money but also your time.

The intriguing part is that this way of thinking can be used to assess how you spend your free time as well as when considering a purchase.

In general, time spent working at your job or on your business is productive time; however, what about free time? Have you ever considered how much money you waste by mindlessly scrolling through Instagram or Facebook news feeds?

In 2018, the average social media user spent 136 minutes, or more than two hours, per day on social media sites. Assume you earn $80,000 per year at your job or $40 per hour. Is it really worth $80 to you to spend two hours a night scrolling through Facebook?

In short, whether you are purchasing an item or deciding how to spend your time, keep in mind that everything has a cost and that one thing that distinguishes the rich from the poor is how they value these valuable resources.

Trick #7: Use the Stranger Test

You enter a store and notice a shirt that you think would look great on you.

While you are aware that you should consider how much time you are exchanging for that $50 t-shirt, you are still tempted to purchase it.

So, before you pull out your wallet and complete the transaction, put yourself through the Stranger test. Let me explain the Stranger test if you’ve never heard of it. Consider a stranger standing in front of you, holding a t-shirt in one hand and $50 in the other.

Which would you prefer?

In most cases, cash is likely to be more appealing.

When you use this approach on a regular basis, you will notice that you are constantly choosing the money over the item, which strengthens your position in not splurging and instead keeping that money in hand.

Bonus Tip: Have Faith in Yourself.

While all of the previous tips will help you earn or save money in the short term, the wealthy believe that becoming wealthy is not only natural, but also a right, and this self-belief is the foundation of becoming wealthy.

“World-class thinkers know in a capitalist country they have the right to be rich if they’re willing to create massive value for others,” writes Steven Siebold, author of the book “How Rich People Think,” after studying hundreds of self-made millionaires. Following hundreds of interviews, Siebold came to the conclusion that “it wasn’t a lack of desire that kept the masses from becoming wealthy, but a lack of belief in their own ability to make it happen.”

In short, none of these psychological tricks will help you become wealthy if you do not believe you deserve to live your ideal wealthy lifestyle. So, before you implement these 7 psychological tricks into your daily life, make sure that your self-belief is aligned with the lofty financial goals you’ve set for yourself!