Wealth Mindset

“Developing the right frame of mind is critical to successfully investing for the long term and achieving your financial goals.”

Many people do not obtain financial freedom because they do not have the one thing that matters most: the Right Mindset. Everything about attaining financial freedom starts with how you think about managing your money (budgeting), saving for the future, investing for the long term, and accumulating wealth.

Your mindset is a big part of what’s gotten you to where you are right now financially. It’s largely responsible for the financial success (or lack of it) that you already have. So, if you want your financial life to change, your mindset will also need to change or adjust.

Altering your perspective and mindset can help you overcome the majority of financial, health or emotional challenges you may face. An individual’s perspective, how we face challenges, and how we choose to live is a choice. That mindset shapes how we deal with life’s hardships, whatever storms come our way.

What is Wealth Mindset?

“Before you can become a millionaire, you must learn to think like one. You must learn how to motivate yourself to counter fear with courage. Making critical decisions about your career, business, investments and other resources conjures up fear, fear that is part of the process of becoming a financial success.” Thomas J. Stanley

Your mindset is the sum of the attitudes and ideas you bring to a situation related to your personal finances. It’s the mental habits you have for thinking about and responding to any financial circumstance; they’re usually created by your previous financial experiences.

A mindset, according to psychologist Carol Dweck, Ph.D, and popularized in her book, Mindset: The New Psychology of Success, “is a self-perception or “self-theory” that people hold about themselves. Believing that you are either “intelligent” or “unintelligent” is a simple example of a mindset”, according to Dweck. “People may also have a mindset related their personal or professional lives—“I’m a good teacher” or “I’m a bad parent,” for example. People can be aware or unaware of their mindsets”, Dweck wrote, “but they [mindset] can have profound effect on learning achievement, skill acquisition, personal relationships, professional success, and many other dimensions of life” including financial.

Mindset is one of the primary reasons more Americans don’t become wealthy and don’t reach their financial goals. They’re afraid – not of being wealthy and financially free, but of the changes in their lives they’ll have to make to get there.

There’s a saying: “We don’t see the world as it is. We only see the world as we are.” The money results you’re experiencing are a reflection of your internal framework or mindset. When you change your mental blueprint and financial self-image (a.k.a. your mindset), you transform external results. As John Maxwell says “You’ll never change your life until you change something you do daily. The secret of our success is found in your daily routine.”

If you keep telling yourself that you aren’t smart enough or good enough, or that you don’t know enough, it’s not going to be easy to turn on the steady stream of cash flow. And with a fixed, low-earning mindset and constant negative self-talk, you won’t be likely to achieve financial freedom.

So instead of all that unproductive thinking, implement a “wealth mindset” and put a high value on yourself. When you value yourself first and foremost, you increase your deserving level through a self-worth vibration and resonance.

Change Your Mindset

“Decide You Want It More than You Are Afraid Of It” Bill Cosby

The first thing we must do is change our beliefs. When we drop the mindset that says that in order to make money, we have to trade our time for it, our minds open up to the possibilities. There’s no rule that says that to make X dollars, we have to work X hours. In fact, it’s more important to spend time “un-learning” the old limiting or “fixed” mindset than “learning” the new positive mindset.

So, think about trading value for money, not time.

Think about what value you can create for other people, and how you can deliver that value.
Think about what assets, skills, knowledge, connections or ideas do you have that people value.
Recognize your strengths and competency, then go all-in. Bet on and invest in yourself.

Additionally, those who have accumulated wealth tend to develop the habit of “accumulating wealth slow” rather than “getting rich quick.” To assure this, they follow two of billionaire investor Warren Buffett’s rules with regard to their capital and assets. “Rule number one: Don’t lose money. Rule number two: If ever you feel tempted, refer back to rule number one, “don’t lose money.””

Climbing the economic ladder, even when the odds seem stacked against you is doable. But in order to become financially free, you have to have a serious heart-to-heart talk with yourself, according to Forbes. You want to get a few things clear in your head, including:

A definition of exactly what financial freedom means to you – following someone else’s definition won’t get you there
A realistic and accurate picture of your current financial situation
A realistic idea as to what you’ll have to give up to get where you want to go A realistic assessment of the obstacles in your path
A series of goals that will help you to become financially independent

The path to wealth and financial freedom depends on your financial mindset, what you learned about money management early in life, and what your willingness to delay gratification and exercise discipline to get to realize your goals.

Living life on your terms means being free to do the things that are most important to you.

Make small changes over time

No matter what changes you want to make, it’s better to make small ones over time than to try to make a huge one right away, according to leading personal finance author Laura D. Adams. Those who succeed the most make small incremental changes and build on that foundation.

You might start with a financial goal to automatically save a certain amount of your monthly pay or to invest a few dollars in a low cost index fund. Small changes that become habits create momentum for additional improvements. Decide to implement one small change this month, like tracking spending each week, setting up a retirement or brokerage account, or figuring your net worth.

Once you have success accomplishing a small financial change or goal then add more, such as creating a spending plan, cutting unnecessary expenses, and building credit.

And, it is imperative to get started now since it’s human nature to procrastinate—especially when the deadline for getting something done like saving for retirement is decades away. But procrastination never works in the case of saving money for retirement, because building wealth is inherently a long-term process.

In other words, accumulating wealth is difficult or virtually impossible without upfront thought, planning and discipline. The earlier you get started, the more time your investments have to exponentially grow and benefit from the magic of compounding. The key to building wealth for the future is to start early and to slowly but surely increase your net worth over the long term.

You cannot realize your wildest dreams or reach your most audacious goals with a negative mindset.

References:

From Gratitude to Greatness: Brownlee Global's Path to a Purposeful Life

Guide and Educate Individuals How to Build Long-Term Wealth, Better Manage Their Money, and Achieve Financial Freedom

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