Money Reasons did a review on a book called How Rich People Think. I commented on the post, and it got me to thinking about some issues that may go deeper than rich versus non-rich. As much as we might want to think of rich and non-rich as a state of being, there are components to each that make them happen?a mechanical process perhaps.
Much of that seems to come down to how we think about money. Money is the conventional dividing line between rich and poor, but it seems that our attitude toward it?whether we see money as an obstacle or as an opportunity ?seems to have a huge impact on where we go with it.
So how exactly do we define obstacle and opportunity mindsets as it relates to money? Rather than attempting a deep analysis, we might be better to focus on examples of each type of thinking. In this way, we can not only see our own thinking, but we might also see how it either holds us back or pushes us forward.
Money as an obstacle
If you see money as an obstacle, you?re likely to see common ground with several of the following:
- You?re mind is never far from your pile of bills
- A single large bill has you in a state of near paralysis
- You worry about potential upcoming bills
- You hope you can make it to the end of the month; next month, the same cycle will repeat as it has for years
- Your financial M.O. is centered on crisis management
- You?re scared to death that you?ll lose your job?and have no idea what you?ll do then
- You don?t particularly like your job, but you play the ?go-along-to-get-along-(hopefully)-until-retirement? game
- You?ve stopped entertaining serious thoughts about what you?d actually like to do for a living
- Your house and car are important components of who you are
- You fixate on your employer paid benefit package
- A comfortable retirement is the holy grail of you financial plans
- You worry about how other people will perceive your financial situation
- You live for weekends and vacations
- You?re more concerned with keeping what you have than with advancing in your career and finances
- You mostly think that luck is the main reason other people are successful
- You periodically dabble in TV infomercial get-rich-quick schemes, hoping that you?ll discover your own lucky streak along the way
- Your dreams have morphed into wishes and outright fantasies
This list is long but please know that it isn?t an attempt to insult anyone. It?s easy to come up with so many examples because most of us are either in this mindset or were raised in it. You might even say that it?s the default financial mindset.
Look at the list in total, rather than at any one of its components. Notice that the thinking effectively puts you into a box. There are no doors, no windows, no way out?in other words, you?re stuck! Because you?re surrounded by fires that need to be put out, there?s never time, money or mental energy to move forward to a better life.
The money-as-an-obstacle mindset mostly repels money, which ironically keeps its absence as the central focus in your financial life.
Money as an opportunity
If you see money as an opportunity, you?re likely to see common ground with several of the following:
- Money is a resource to be channeled, leveraged and increased
- Money is a tool that buys the really important stuff, like free time, exciting adventures, interesting experiences, freedom from worry and choosing your own destiny
- Houses and cars are important, but not if they get in the way of the really important stuff
- Pursuing opportunity is the goal?there is no end game
- Problems are details that need to be solved
- You avoid having a big pile of bills, but if you ever find yourself with one and it?s interfering with your pursuit of the really important stuff, you?ll get rid of the bills and what ever amenities that are producing them
- Nothing is certain, but you?re willing to try anyway
- You see life as a dynamic, not as a status quo, and that dynamic plays into your life?s plans
- You see a day?any day?as an opportunity to do something important
- Retirement is not the goal?living a rich and fulfilling life is
- Building a box is for others; your life is ?out there??somewhere
- Investment losses don?t paralyze you; wealth building is a process and you?re in it for the long haul?you avoid high risk speculations for exactly this reason
- You must be self-employed?there are risks to this, but a traditional job will get in the way of the really important stuff in your life and could never contain your ambitions
- Being concerned with what others think of you or your finances gets in the way of the life you?re trying to lead, so you don?t bother yourself with it
- You associate mostly with like-minded people, who feed and strengthen your convictions
- Your like-minded friends are providing you with opportunities you would never have discovered or mastered on your own
Thinking of money as an opportunity doesn?t guarantee that you?ll be rich but it does seem to attract money and it?s easy to see why. Money is held up not as the solution, but rather as a tool, an enabler, that gets the opportunist what it is he truly seeks in life.
Ironically it?s also a freer way to live. The opportunist may decide, for example, that if a house in the suburbs with a big mortgage is an obstacle to his better life, then the house will have to go. Among the obstacle crowd, this would be a heresy.
Our minds work much the way the rest of our bodies do?repetition and regular exercise create new patterns and habits. Do you believe that coming to think of money as an opportunity is a state of mind worth creating?
Great post Kevin.
I have lived in both of these mindsets and I certainly enjoy the opportunity mindset much more. Now, I just have to work on the self-employment thing.
Bret – I don’t know that self-employment is a requirement, even though it does seem to be the way most in the money as an opportunity seem to be. But I think any of us can make the transition one or two steps at a time.
Great insights Kevin. Like most things in life, handling money is often more about psychology than anything else. It can be very liberating to get rid of old habits and mindsets, especially if they’re not working for you. Why not step out of the box and see what happens?
Balance Junkie – It’s probably worth making a change or two if you get a sense that what ever you’ve done to date hasn’t worked out. So often it is in the mindset, and until that’s changed, circumstances won’t.
I agree with you balance junkie, the idea of changing how I view money would be amazing.
David – Most of us are entrenched in ways of thinking and have been so long that we don’t even question our assumptions. At the risk of engaging in semantics, that’s when we need to start questioning.
Hi, Kevin. I definitely see the merits of money as ‘opportunity’ because it allows you to be more flexible in how you live your life. I really see that being flexible and adaptable to change in your life is really helpful, as well as analyzing what your real priorities are.
For example, if you say you MUST have a big house in the suburbs (as you mentioned above) by the time you’re 35, what happens if you don’t get there? Is your life now ruined because of this? What happens then? Do you just give up?
The opportunist may not even have a goal like “big house by 35.” I know it can be easier said than done, but since I’ve started to relax more, enjoy experiences rather than possessions, set flexible goals and timelines, I’ve felt a greater sense of freedom.
Good points Chris. I think that sometimes having ?goals? of a certain type of house or car or a vacation house at the beach, etc, can be disruptive. I put goals in quotes here because I?m not sure they?re worthy to be goals. That suggests that your goals are things, posessions.
A better goal might be reaching the point of doing something with your life, as opposed to having someTHING. Life should be about what we do, not what we have, so the idea of making a thing a goal?we?re all different, but I don?t see the merit in it.
Things as goals might also keep us from reaching genuine goals. Not to pick on a house, but there are a whole string of expenses that go with a big house, you could spend a lot of time reaching the point of being able to afford it, then the rest of your life after trying to keep and maintain it. At that point you?re forced into a defensive financial position that isn?t conducive to forward motion.
Things have a way of removing the flexibility needed active pursuits in life. That?s often what creates obstacles, not opportunities.
Yes I do believe that thinking money is opportunity is the best route by far! It’s also a fuller lifestyle to live.
I think that how you are raised makes a huge difference in the way that you think of money.
Great points and thanks for the mention 🙂
“Fuller Lifestyle” is a good term. It basically makes money a component of your life, not the dominant factor. Well put!
Kevin — thanks again for your responses and your posts! I absolutely agree that “things as goals” really does put you in a defensive position.
I wish I could remember where I read this, but there was a great example of something similar. It said most people would fight harder to keep someone from taking $100 from them as opposed to working harder to earn an extra $100. So, you’d be more worried about losing something you had than gaining something you didn’t.
Chris – Very good point. When we become defensive–more concerned about protecting our stuff than moving ahead–we kind of doom ourselves to a static life.
Given the way life moves, that’s a position we can hardly afford to be in. Life can run you over that way.
Depending on how you handle what money you do have in your life at the moment dictates where it is an “obstacle” or an “opportunity”… With me, it is ALWAYS an opportunity to improve my life. On the other side, my boyfriend does not view money as something that needs to be “rationed” out and I am so over the “crisis mode” mentality. But I have learn’t to keep my money separate and “ration” it out accordingly when dealing with him. Hate to do this, but with us now living together (5 months) – I have had to learn the hard way that some folks can go for days or months with no “electric” (lol). And he and his family are those folks – I am not. Great subject.
My Blog: A Story of Hope!
Angela – Money separation…that’s a great topic by itself.
If you have definate ideas about improving your situation financially, and your partner doesn’t, handling money seperately might be the best option. It’s hard to reform someone, especially when it comes to a gut issue, like money.
Thanks for the feedback, I was beginning to feel “guilty” – but at age 52, I am so not into being homeless when I retire (lol). To be honest, right now, I am preparing myself for a possible exit from the relationship as like you stated “you cannot change someone” if they don’t want to change. Today he is stressing out over the bills and I have yet to volunteer the fact that I have cash hidden. Now I understand why the older generation of women always told us, “always have something in your name” – he may die or live you. Sad, but true fact. Talk later 🙂
My Blog: A Story of Hope!
Angela – My parents always told my sisters the same thing! There’s a lot of wisdom in the “old school”. Sometimes I think we’re a little too trusting today and we dismiss the wisdom of our elders too easily.