After a over 200 calls discussions with investors via phone calls, I discovered that a notable portion of my time is spent reprogramming bad money habits created by the way we were raised. Further compounding this problem, a large percentage of the population with dual income have a significant other who also comes with their own set of money baggage… I mean… habits that are often no better than their own.
Have an open mind when I say this,“we were raised by aliens.” Many that come to Simple Passive Cashflow are questioners. Up is not always up and down is not always down. The things we were taught in our childhood is not always the optimal money mindset. I like to think of using these mindsets like tools in a toolbox. Certain money mindsets are useful in different situations and periods in our lives.
Let’s try a mini reflection exercise: Were your parents good with money?
- Did they stress out over not having enough by spending an extra few minutes to depower the entire home before leaving or drive an extra ten minutes to save $0.08 per gallon of gas?
- Did your parents fight over money? If there was a little more cashflow, would it eliminate an argument here or there about what brand of laundry detergent to use or to use hot or cold water?
- Was one parent in charge of making money and the other spend it? Was one person completely oblivious to the finances or investments?
One of the frequent money cases that people share with me is one spouse wants to invest to get out of the rat race but the other spouse is unwilling to do so because their family grew up with little money. And now that they have a home that they “own” they are content and don't want to move from this place of certainty even if it means slaving away at a job they don't like for 30 years. (By the way you never own anything,even after the mortgage or car payment is complete there is always tax payments and maintenance). As Connie Cao said in episode 22, you don’t take anything to the grave with you. So keep calm and lease/rent on!
Another issue I see is how people look down upon wealth since they associate it with greed. Wealth is the by product of someone who creates value for others and businesses that are long lasting, create incredible value for customers. That's why I discount Amazon resellers as legit businesses and why I focus on repositioning Multi-Family Home (MFH) apartments, because it changes the lives of the tenants that live there by transforming a community.
There are 8 money mindsets
- Savings Mindset – Are you pre-programmed to save money?
- Spending Mindset – Are you pre-programmed to spend money?
- Earning Mindset – Are you pre-programmed to make money?
- Security Mindset – Are you pre-programmed to protect what money you have?
- Freedom Mindset – Are you pre-programmed to see money as the path to freedom?
- Anxiety Mindset – Are you pre-programmed to see money as a source of stress and anxiety?
- Negative Mindset – Are you pre-programmed to see the pursuit or accumulation of money as a negative, bad or evil thing?
- Positive Mindset – Are you pre-programmed to see the pursuit or accumulation of money as positive, good or noble thing?
In my findings people always have a primary and secondary money mindset. Some people could even be bi-polar for example a spender and saver. What are your two?
Awareness of your mindset is the first step. And then you can see how it fits with your partner or team. Use the framework to collaboratively discuss issues.
Your mindset is no fault of your own. You were raised by aliens.
Do me a favor and share with your friends and family. And it's ok to CC me on that email so I can say Hi!
What a good read. Thanks for sharing with us. The footsteps that your parents leave behind make a huge impact on spending. I read, and re read Robert Kiyosaki's books. It's all about changing the mindset. Thanks for sharing
Well, if I had to pick 2 on that list, it would be Earning and Security. I always went out and made a buck, and I always took care to protect whatever I accumulated. In reality, however, everyone has all 8 mindsets at one time or another.
Double post - deleted. BP having some technical issues!
parents were not good with money.
Electric **** off for nonpayment a few times
I want money for security surprise surprise lol. Never actually understood why until you thread
I am more of a saver on little daily things like food. But like nice larger things like house and vacation houses
Free eBook from BiggerPockets!
Join BiggerPockets and get The Ultimate Beginner's Guide to Real Estate Investing for FREE - read by more than 100,000 people - AND get exclusive real estate investing tips, tricks and techniques delivered straight to your inbox twice weekly!
- Actionable advice for getting started,
- Discover the 10 Most Lucrative Real Estate Niches,
- Learn how to get started with or without money,
- Explore Real-Life Strategies for Building Wealth,
- And a LOT more.
Sign up below to download the eBook for FREE today!
We hate spam just as much as you