Can mindset affect financial success?

A readable book I highly recommend everyone read

Can mindset affect financial success?

Yes, especially if someone has a “material acquisition” mindset, rather than a “financial goal” mindset.

The difference between a “material acquisition” mindset and a “financial goal” mindset is like night and day.

A “material acquisition” mindset is focused on accumulating “material things”.

A “financial goal" mindset is focused on accumulating “financial assets” in order to achieve different goals.

From basic goals, such as building an emergency cushion.

To big goals, such as saving for a house, a child's education, a post-working secure future, or the ambitious, but achievable goal of financial freedom.

The money that goes into financial assets does different things than the money that goes into material assets.

Financial assets produce income.

Material assets consume income.

I am talking about personal material assets, here.

In other words, nice things.

A nice house in a cool neighborhood is a material asset.

It consumes income.

While all houses consume income, a house in a less cool neighborhood will consume less income.

But people rarely want a house in a less cool neighborhood.

They want a house in a cool neighborhood.

There are two underlying mindsets at play for that.

One is a mindset of “It looks or sounds so nice. I must have it now".

Two, is a “keeping up with the Joneses” mindset.

The combination of the two results in a person with those mindsets, using up all the money they earn, on maintaining their "keeping up with the Joneses" lifestyle, and continuously buying experiences and things.

And when what they earn, is not enough to keep up, they borrow money, or max out credit cards and/or personal loans.

This comes at the cost of their financial security, sometimes, also at the cost of alienating (turning off) their family and friends.

And it usually puts them very much behind, not just behind the people whose lifestyles they were keeping up with, but behind less well-off family and friends, as well.

If it’s not a house, and things which make up a house (hard wood floors, granite countertops, fancy appliances, etc), it’s cars.

Cars, like houses, consume rather than produce income.

In fact, they consume lots of income.

Upfront income. Ongoing income. The purchase price, the sales tax. the registration, the insurance, the gas, the maintenance, the repairs.

It doesn’t matter that you bought the car with cash, and didn’t use financing.

Maybe you are not paying interest, by buying the car with cash.

But the cash you used to buy the car is hard-earned income, and hard-saved income.

That hard-saved income could have been used to create wealth, or be used to produce more income, instead of all being used on a single new and fancy car.

Buying a used car would have left some money for you to to build an emergency cushion, or if you have that, to invest towards a future goal such as a house, or a child's education, or your post-working days.

Houses, cars, name-brand clothes, expensive restaurant meals, sports games, concerts, vacations… if it’s not one thing, it’s another.

There are limitless ways to consume income.

There are fewer ways to produce income.

It comes down to a job, or two jobs, a business, or investments.

Financially successful people have one or more, of these things. Usually, at least two of these things.

They use debt, but when they use debt, they use it to produce income, rather than consume income, as books like Rich Dad Poor Dad advise....

Minoo Jha

· 2y

What does Robert Kiyosaki mean when he says "living debt-free is the worst advice you could give anybody today"?

He believes in using OTM to acquiring assets that produce an income, such as rental properties. His book was life-changing for many, and was one of the books that had the effect of a starter gun on me. It had an even more powerful impact on a friend of mine. Here’s what you need to know…

Financially successful people are so focused on producing, or finding more capital for what they produce, they don’t care whether they live in a fancy neighborhood, have a fancy car, or go on fancy vacations.

They know those things will come later, as a product of focusing on producing more income.

Being focused on building their stream, or streams of income, they are safe from unnecessarily expensive personal purchases, while they are in the producing stage.

They will be observed to spend less on cars, clothes, vacations, hobbies, etc, relative to what they are earning.

Money is continuously steered towards a financial goal, or towards producing more income.

Consuming is largely absent from, or a minimal part, of a producer’s mindset.

A producer’s mindset is focused on production, and/or their mission.

Capital opportunities to further production, to further the mission, are more attractive to them, than stuff that’s on sale.

The annual Nordstrom Sale or Geoffrey Beane sale is not marked on their calendars.

Producers also do not try to display wealth to attract a partner, or to display looks to attract a partner.

They know that displaying wealth, and actually having wealth, are two different things.

What’s the point of wealth display, without actual wealth, especially if it reduces, rather than enhances your financial security.

What’s the point of a looks display, without wealth to support it, and at the price of your future financial security?

For the person trapped in the looks display or wealth display mindset, financial security will be very hard to achieve.

And because one can’t fight age, or debtors, indefinitely - one or the other will catch up to them, eventually.

So my advice for anyone reading this, is to drop the consuming mindset, and switch to a producing mindset.

Take up a more high paying job.

Start a business and focus on growing it.

Invest in income-producing, or capital appreciation assets.

The more you invest, the more Interest and dividends you can earn, the more your investment grows, the more your stash of cash will grow.

Spend less, save more.

Become a minimalist.

The answer to a stash of cash may be as simple as that.

Minoo Jha

· 7y

Could minimalism be the key to financial freedom?

Hi, You asked, Could minimalism be the key to financial freedom? Yes, short of living in a tent, I am comfortably off because of living a minimalist life. Here’s how I did it… I internalized Suze Orman. I started meditating. (The book “How God Changes Your Brain” gave me both my motivation and my technique). I stopped being a nervous Nellie about my future, accepting that the future was hamarey bas ki baat nahi (Hindi for “beyond my control/capacity/competence”). I channeled stories such as the Farid ud-Din Attar story about King Mahmud and the Beans. I started tracking my expenses. I found that knowing my average monthly expenditure was within a certain range made me oodles less anxious. I searched for and read books on downshifting like Your Money or Your Life. I found out how simply some folks were living (friends and relatives in India) and how happy and content they were. It helped me develop perspective. I realized that things are not always what they seem. That people who looked better off than me with expensive cars, nice houses, the latest gadgets and who went on fabulous holidays might actually be reeling in debt and have negative net worth. I also observed how many people who are better off than me fret more than me. This is because though they are rich in externals (the visible accoutrements of a successful life), they are poor in internals (their internal life is messy). Peace and contentment can’t be bought. It is a gift you give yourself. You can be at peace even living in a crowded noisy apartment complex, whereas you can be in a state of turmoil even in the quietest most luxurious and secluded waterfront mansion. I know this sounds like a “sour grapes” rationalization, but I really do fret less than many people who are materially far better off than me. I discovered “Asteya” and made it one of my goals. Asteya is the discipline of taking from the world only what you need – without greed, excess, or wastage. I realized that producing something (expression) was more satisfying than owning anything (consumption). I observed that more stuff made me less happy rather than more happy – giving me more house cleaning, maintenance and security to worry about. And finally, I observed what made me happy. They were not things, but experiences. A good conversation. A good read. A walk or talk with a friend. A simple hearty meal. A guest post (hint,hint). A satisfying workout at the gym. Giving and receiving appreciation. Learning something new. My meditations. A fear or weakness conquered. An intellectual puzzle solved. A physical challenge met. And realizing this, I was able to cheerfully and contentedly declare “I’m good!”

Spend some time today, thinking about how you can improve your financial security.

If until now, you’ve been largely focused on buying goods and services to improve this or that aspect of your life, it will require a mindset shift.

It will also require you to be realistic.

Making money is not easy.

Hard work and sacrifices may be required to improve your financial security.

Accept the reality of that.

You can't have the mindset that you will only take up an easy, comfortable job, with low stress, flexible hours, an easy commute, or only do a business that you can do from home.

You only have to try these things once, to realize that what looked like easy money, isn't easy money.

It's easy, but there isn't any money.

Save the easy money mindset for the times in your life, when you are a parent of a young child, or you have an ill family member to take care of.

You should certainly not make it your standard operating system.

You will shackle your ability to earn money, and save money, if you operate with that mindset.

Replace that “easy job”, or “easy business venture” mindset with a “mission”, and/or a “financial goal” mindset.

Get into the right money producing occupation - whether that is a job, a business venture, or a mission.

And keep at it, until all your financial goals are reached.

Remind yourself regularly, why it’s worth your time, to give it all you've got...

Minoo Jha

· 5y

Why does it seem easier to give up than just not try again?

Because of the thought that trying again may result in nothing. But there are many circumstances in which we should consider doubling down rather than giving up. I wrote this piece to highlight some of those circumstances: 25 Circumstances In Which You Should Consider Doubling Down On Your Resolve When the money is worth it. When the opportunity is worth it. When it is essential to achieving your potential. When you have a worthwhile goal. When you have nothing to lose. When you have a lot to learn. When you really (really) want something. If your conscience says you should. If it’s a possible stepping stone to big things. When your intuition tells you to. When your financial position is at risk. If it is what you need to do to tide over. When a value that is important to you is on the line. If it’s important to you not to feel like a quitter. If it involves any habit you need to give up. When you want to break a pattern. If it’s a life and death situation. When you’ve invested time and money, and victory feels close. When people are depending on you. When turning back would have negative consequences. If your physical or emotional health will be positively impacted. If it is important to your spiritual growth. If it is important to your self-worth. If it will increase your tolerance of challenges, frustration, and criticism. If it will build your character. ******************** When you double down on your resolve, you effectively create your own boot camp. Going through your personalized 'circumstantial' boot camp, will make you stronger, and more confident in your ability to handle tough challenges. A quitter mentality never made anyone feel good. An easy-way-out mentality never made anyone feel good. It is your hard achievements which will make you feel good. Make sure your goals are hard and worthwhile goals to pursue. Then resolve to double down, even triple down, on your resolve to achieve those goals. I urge you to bump up your motivation to a new level by breaking out of convenience, comfort and the status quo, and going for something bigger. Here's a sampling of my thoughts on that, taken from the concluding lines of another piece I wrote: "You can’t write a blog without actively choosing fear. When you sit down to write a piece, you fear being boring, being repetitive, being out of touch, and being irrelevant. I face that fear every week when I sit down to write. Convenience. Comfort. Status Quo. Inconvenience. Discomfort. Breakthrough. The fact that I continue to write tells you what my spirit has chosen." I will end with this powerful message from Joe De Sena who conducts the Spartan Up races: “When you break through the other side of hell and finish an event that did not seem possible, that stopped you in your tracks, over and over, something happens. You feel accomplished, incredibly proud of yourself, and in some ways, a different person” You are going to feel accomplished, incredibly proud of yourself, and a different person for trying and trying again.

Whatever you do, don’t pair the “easy income”, “easy mission” mindset, with a “spend to the paycheck on personal indulgences, and use debt when the paycheck is insufficient” mindset.

That will doom your efforts to achieve your financial goals, even before you begin.

Choose a job that pays you well

And then choose financial success or mission success, over material success, as your goal.

One last word -

It’s never too late to wake up.

It’s never too late to stop following the crowd.

It’s never to late to think radically differently.