The mix of your psychology and skill is the secret sauce for wealth creation, says Ron Malhotra.
The award-winning wealth planner, influencer and success expert is dedicated to helping others improve their lives by educating them on wealth principles and the psychology of achievement.
When it comes to wealth creation, Ron told KnowHow founder Bushy Martin on the Get Invested podcast that it firstly comes down to your psychology and how you control your response in difficult times.
“I realised that there was a way that successful people thought, and there was a way that people who were financially struggling – they had these predictable thinking patterns,” Ron said.
“Psychologically, when we are feeling fear, we are going to make a certain type of decision. And typically, when you’re feeling fear, you’re not going to make the types of decisions that are going to move you forward.
“So, the first thing we’ve got to do is monitor our emotional state. And we’ve got to take an objective view of where the world is going.”
Following the changes that are emerging from COVID-19, Ron believes that Australians will need be thoroughly prepared to generate wealth.
“Things are about to change. And I believe that COVID-19 should be a wake up call to a lot of people,” he said.
“People are going to start to realise that if we don’t become more innovative, if we don’t lift our performance, if we don’t become more responsible, we’re going to have some serious pain.
“If people right now say to us ‘I’ve lost everything because of COVID-19’, my response typically would be, ‘no, you haven’t lost everything because of COVID-19 – you’ve lost everything because of lack of preparation’.
“It’s not going to help anyone until they learn how to confront the truth. And the truth of the matter is that there are going to be people, households and businesses that are going to do very well because they were prepared, they had contingency plans, risk mitigation plans, and plans in their investment portfolios to ride out these types of things.
“If you haven’t got a plan in place and you have not taken care of the foundational elements, which is your skills, your income, your savings [you’re] completely ill prepared.”
To address these foundational elements and establish a plan, Ron recommended a unique SISPIP model – a sequence of wealth creation that addresses the areas of Skills, Income, Savings, Protection, Investments and Preservation.
He said developing your skills is a significant area that will help you to position yourself differently in the marketplace, enhance your value as a worker and improve your adaptability to new global trends.
“If you want to be able to get your money in order, the first thing you’ve got to do is develop the types of skills that are in demand,” Ron said.
“We’re no longer in the information economy – we’re in the social, digital economy. And you need to upgrade your skills that will allow you to influence your income.
“If you don’t take care of the income problem first, you can’t take care of the wealth creation problem.”
Ron outlined a simple yet effective strategy to get started and develop your skill set.
“Take out a piece of paper and list every single skill that you have acquired over the last 10 years, both personal and professional … identify the things you’re really passionate about and then identify the areas where you have a skill deficiency,” he said.
“The wonderful thing today is that you don’t need a three-year degree, you can now acquire that skill and achieve a reasonable level of competency within six months … if you have a disciplined approach, you’d be shocked at what you can accomplish within two or three years.
“And the best time to start working on these things is while you’re still in employment. Have a plan B even if you never lose your job. Even if you’re one of the lucky ones that continues to have improved employment prospects in your career, I would still suggest you look at having an alternative way of making an income.
“I think the most risky thing you can do today is have one source of income because you’re literally a decision away from losing the only source of income that you have.”
Listen to the full interview here.
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