As more research into the reasons some grow wealthy while others do not is proving, a person’s mental attitude or state of mind is critical to financial freedom – however you define it. Like so many things in life, human beings are able to talk themselves into just about anything. So, why not talk yourself into becoming financially successful – or – rich?
In Napoleon Hill’s classic book “Think and Grow Rich,” written in 1937 during the Great Depression, he shared the principles that he used to pull himself out of poverty and to help others do the same. None of these principles deal with specific earning or investing skills, but with creating the mental attitude that creates the fertile soil of wealth building.
In an article for CNNMoney, for Money Magazine titled Trick Yourself into Getting Richer, the five authors rely heavily on the book “Thinking, Fast and Slow,” by Nobel Prize-winning psychologist Daniel Kahnemann, in which he “explains that human brains are of two minds: the fast, intuitive decision-maker and the slower, more analytical ponderer.” The idea is to try to “trick” oneself into thinking like a rich person. A few of the more effective tricks would be…
- Personalize your accounts – Name your savings account for the goals you’ve set for yourself. Names like “fabulous world adventure” or “move to the country” on a savings account will help you to remain focused on your goal when you’re tempted to spend that money on something frivolous or unnecessary.
- Hang with likeminded folks – Those who think alike tend to live alike. If your goal is to become more successful, you should spend time with successful people. Whatever “success” means to you, if you become familiar with a model of success, you are more likely to achieve that success.
- Spend time with the “old folks” – “In a study led by NYU professor Hal Hershfield, people who were prompted to think about their grandparents were likely to have saved more than those who weren’t.” Sensitizing yourself to what it is like to be an older person, your compassion for your future self may motivate you to save more.
- Guilt yourself into saving – By setting up automatic transfers to savings, you may feel guilty when you make unnecessary purchases rather than making that transfer back to checking. Play on that guilt to help you save.
- Spend time with the less fortunate – You will be less inclined to try to “Keep up with the Joneses” if you spend some time with those who live with less than you. Perspective will help you save. Remember the Guilt trick?
“I want to eat less and exercise more,” is not the type of goal that motivates anyone to lose weight; feeling better, looking better, and living longer is the goal. Eating less and exercising more are merely the means. Similarly, “I want to spend less and save more,” is something we all know we should do, but this idea does not have the power to motivate. I am much more interested in what actually works – what actually motivates folks to define and achieve their dreams.
At Tamarind Financial Planning, we will use our individual financial planning strategies and personal investment management techniques to help you focus more intently on your goals and find ways to help you make your financial dreams come true.