The first of our principles of wealth creation is mentality. Why? Because without the proper mentality, you can ruin the best laid plans.

For instance, Billionaire Warren Buffett refused to buy a new car because it was impractical. “Impractical“. He considered how little he drives, how much the car would cost in maintenance and gas and the fact that the cars he has are perfectly fine. He didn’t look at his bank account and see that he had the money in there to afford the car. And he still lives in the house he bought in 1958 for less than $40,000.

Conversely, M.C. Hammer, who spent around $500,000 a month on his entourage and staff. Probably the most expensive group of friends and employees anyone has ever had. And he had his house built, over 40,000 square feet that cost $30,000,000. Thirty million dollars! Shall we remind you that he only made thirty-three million dollars a year. During his most popular time! 33 million is a lot, unless you are spending it as fast or faster than you can make it.

However, the stark contrast between Buffett and Hammer isn’t so much about race. Although it can be argued that Hammer being raised in poverty, wasn’t taught the proper mentality. So we see, that the wrong mentality leads back to poverty. You have to first condition your mind to not fall into the “treat yourself don’t cheat yourself” mentality. Having the money to cover the cost of something doesn’t mean you can afford it.

Check out this video on black generational wealth and the mentality that is killing it here.