Are You Going to Get Wealthier? Mindset of Wealthy People

Wealth-building is a journey, not a quick fix solution to getting rich. Many aim to become financially independent, but only a handful succeed go one to achieve that freedom. Why? The secret lies in the mindset. It’s not enough to just invest money; we need the discipline and patience to stay invested, even during tough times. Our mindset will determine whether we can stay on the path long enough to see the results.One significant milestone in this journey is reaching Rs.1 crore in investments. You can also read this article on how wealth explodes after the first crore is made. For most of us, this goal can take 10-12 years, that too when we are investing regularly in stocks or equity-based mutual funds. Other investment options will take more time to grow our wealth to Rs.1 crore level.This period (the first 10-12 years) tests our ability to remain committed, avoid distractions, and resist the temptation to spend. Crossing Rs.1 crore is not just about the money, it is also symbolic of the mental and financial discipline needed for long-term wealth creation.Once we cross this threshold of (Rs.1 crore), something remarkable happens. Wealth begins to grow faster. At this stage, our money starts to work for us.The mindset that can take us to our first milestone of Rs.1 crore portfolio will be discussed in this article. We’ll explore whether we have the mindset to not only reach ₹1 crore but also build wealth beyond that point.2. The Journey to ₹1 CroreThe journey to accumulate Rs.1 crore can take about 10-12 years for most young middle class people in India. This assumes regular investments in a pure equity plan that can generate an average return of about 16% per annum.Whether one invests a lump sum or follows the systematic investment plan (SIP) route, staying consistent over this long period is essential. Equity investments, while offering high returns, also require patience and resilience.For many, the first Rs.1 crore milestone is the toughest to achieve. Why? The reason is simple, it takes time and discipline. During this phase, the effects of compounding may not feel significant in the early years, making it tempting to withdraw or change strategies. However, those who are mentally prepared for wealth-building will understand that this phase is crucial. They know the journey is long but rewarding if they can stay invested and focused.The challenge of staying committed to an investment for 10-12 years is where mindset plays a critical role. Market volatility, economic uncertainties, and personal financial needs often lure investors into withdrawing their funds. The temptation to sell during market downturns or spend on immediate gratifications can hinder progress.Majority do not have the required mindset. That is why not many reach even the Rs.1 crore goal. They often fall short due to their impulsive decisions.Those with a wealth-building mindset, however, find it comparatively easier to ride through these challenges. They understand that enduring short-term discomfort is essential for long-term gain. They view market dips as opportunities to buy more and remain disciplined despite temptations.This mindset is what separates those who merely start the journey from those who actually complete it. The latter go on to achieve even greater financial success. How they do it? Just by staying invested and by being patient.This is the true key to reaching the Rs.1 crore milestone and beyond.2. Who Should Read This ArticleThis article is not for everyone. Some people may find Rs.1 crore insignificant, while others may see it as an impossible goal. However, for those looking to understand what it takes to achieve this milestone, it offers valuable insights.Type#1: Already Wealthy: People with nearly Rs.1 crore in savings will not find this article relevant and useful. For instance, someone with ₹95 lakh can easily reach Rs.1 crore by investing in low-risk options like a fixed deposit.Type#2: Small Lump-Sum Investor: Small business owners or individuals with a lump sum amount of around Rs.20 lakh can accumulate a crore over 10 years by investing wisely. This article can be useful for them. It will offer an insight into the mindset necessary to make exponential wealth.Type#3: SIP Investors: Salaried individuals who cannot invest a lump sum but can save and invest regularly through SIPs will also find this article relevant. People who can invest about Rs.25,000 per month will find this article thought provoking.3. A Wealth-Building MindsetThe mindset we hold directly impacts our ability to create wealth.Two primary mindsets influence financial outcomes: the “Income-Dependent” mindset and the “Wealth-Focused” mindset. Let’s read more about them in the following sections:Mindset #1: The “Income-Dependent” Mindset (Negative Correlation)People with an income-dependent mindset rely heavily on their salary or regular income. For them, financial security revolves around seeing that monthly paycheck arrive. When their bank account balance is high, they feel content. But as soon as expenses deplete their income, feelings of anxiety and stress take over.This cycle of emotional dependence on monthly earnings can become detrimental to wealth creation.Such individuals typically live paycheck to paycheck, focused on short-term needs. Instead of investing to build wealth, they prioritize spending their income. Over time, this leads to missed opportunities for wealth growth. Since their happiness depends on income rather than wealth, they struggle to create long-term financial stability.For instance, when a salary is delayed or a financial emergency arises, their anxiety worsens, leading to rushed financial decisions like withdrawing investments or taking loans.This mindset creates a negative correlation with wealth creation. It restricts the ability to grow assets, as the focus remains on short-term gains rather than long-term wealth-building.Mindset #2: The “Wealth-Focused” MindsetIn contrast, those with a wealth-focused mindset are more driven by the desire to grow their investments and assets. Instead of focusing more on their monthly paycheck, they concentrate on expanding their wealth over time.Take example of a long-term investor (like me) who started his investment journey in 2008, right after the global financial crash. For the first two years, the market recovery felt like a honeymoon period with significant gains.But from 2011 to early-2014, the market experienced consolidation and flattish movement. Despite this, such investors, who continued to stay invested, was undeterred by short-term stagnation. What kept them invested (rather investing more) during such times?They watched market cycles closely. Idea is to experience the ups and downs of crashes, recoveries, bull markets, bear markets, corrections, and sideway trends. Instead of withdrawing in times of market uncertainty, they look for opportunities to add more funds to their portfolio. They regularly rebalance their investments. During such times, they sell stocks that have consistently non-performed. They may also sell a few overachievers. Idea is to use the sale proceeds from such stocks and reinvest in high-quality, value stocks that show long-term potential.A wealth-focused individual doesn’t ignore income altogether. They still feel good about a paycheck, but their joy comes from seeing their total accumulated assets grow over time.Their focus remains on long-term wealth creation, making them less susceptible to the short-term fluctuations of their bank balance.These individuals also continually educate themselves by analyzing markets, sectors, and individual stocks. The ability to stay invested through all market cycles, regardless of downturns or periods of consolidation, is a strong indicator of a wealthy mindset.Their ultimate goal is financial independence, achieved through the steady accumulation of wealth, not simply relying on income alone.By embracing this mindset, people are more likely to accumulate substantial wealth over time. The key is long-term thinking and disciplined investing. It can help us ride out market fluctuations and maintain focus on the bigger picture (financial freedom).ConclusionThe path to wealth isn’t just about knowledge or the stock picks we make. It is more about cultivating the right mindset.A true wealth-building journey requires us to shift from depending on our monthly income to nurturing a long-term vision for financial independence. This means embracing patience, consistency, and the willingness to endure short-term sacrifices for future rewards.After reading this, your takeaways should be like this:Stay invested by maintaining the focus. It is especially true for periods like market downturns. The real test of the investor’s commitment to wealth-building will come not in the good times, but in how he/she handle uncertainty, slow growth, or corrections. Instead of reacting emotionally to market fluctuations, one must choose to see these moments as opportunities. Negative news from the market means, these are moments where we can add more to our portfolio. During such times we can also make adjustments and rebalance our portfolio.The action one should take is simple but powerful. Regularly review the portfolio, remain consistent with the investment plan, and continue to grow knowledge of markets and industries.The goal isn’t quick wins, but lasting wealth. This mindset is what will truly separate the wealthy from the rest. Our focus will be on building assets that compound over time. It will eventually give the financial freedom to live life on one’s own terms.The wealth-focused mindset, I have realized after decades of investing, is the ultimate key to long-term success.Have a happy investing.Suggested Reading: