How to Develop a Wealth Mindset for Success
Too many people today are convinced that understanding their finances and putting together a strategy to grow their wealth is only for the ultra-wealthy who can afford to bring an accountant on board.
But here’s the truth: anyone can adopt a wealth mindset that empowers them to earn, save, and build the future they want — without sacrificing their happiness or family time in the present. It doesn’t matter how much money you make.
Sound too good to be true? Developing a wealth mindset is the first step, and here’s what you need to get started.
What is a Wealth Mindset?
Managing your money wisely is about more than just crunching the numbers to see if you can meet financial goals. A wealth mindset is the foundation of all of your spending and saving habits, and it starts with the psychology of money.
You need to ask yourself the real questions and be honest with yourself about the answers. What is your first memory of money? How does it feel to spend your hard-earned cash? What is your emotional relationship to money? Are there any preconceived notions you have around wealth and how to grow it?
Wealth mindset is often inherited from your family of origin, and it can evolve through your own personal experiences with money. A healthy mindset has a dramatic impact on your overall financial success, along with knowledge and actions to back it up.
5 Strategies to Develop a Wealth Mindset
How can you develop a solid wealth mindset? It might be easier than you think. If you’re ready to start focusing on how you can improve your mindset when it comes to wealth building, here’s where to start.
1. Understand Your Behavior
Before you can start building more wealth, you need to understand where your money is going to begin with.
That’s right. We’re talking about the dreaded B-word: your budget.
Understanding how you spend your money is only the first step. You also need to dive deep into the emotions that surround your spending. How does it feel to spend your money? Does every single one of your purchases make you feel stressed to the max? Are you spending money for short-term stress relief, even though it makes you more stressed later in the month?
With a handle on your emotional reaction to spending, you can start to tease out what needs to happen next to help you set goals.
2. Set Goals
Once you know where your money is going and get a grip on the connection between spending and your emotions, it’s time to start setting goals.
Goal-based financial planning aims to set clear and actionable steps to reach your goals. It is more specific than a few abstract ideas such as “saving for retirement” though.
Instead, a goal-based financial plan is super specific and gives you tangible steps to take in order to provide direction for your future. To build your wealth mindset, you should know where you need to go to get to those big dreams you have. You’ll be able to achieve your dreams with less worry and more financial security when you conquer this skill.
3. Focus on the Positives
The opposite of a wealth mindset is a scarcity mindset, and many people fall into this trap when it comes to managing their money.
Making decisions based solely on fear will hold you back from achieving your goals. Instead of focusing on fear, try to find positive angles by looking for opportunities, solutions, and actions you can take right now.
In other words, you should look ahead rather than behind you.
Keep in mind that even debt can be a good thing, though we are often taught contrary to this idea. Think of it this way: someone else (the bank) is tying up their resources (money) in order to hold your mortgage or loan. This means that your money can be invested elsewhere — ideally at a better rate of return than the interest you pay on the debt itself.
See how easy it can be to focus on the positives, even in situations that you might have originally conceived of as negatives?
4. Free Up Your Time
There’s no way around it: your time is valuable, and you aren’t the best at everything.
Instead of committing endless hours trying to accomplish the things that you’re bad at, you can free up some of your own time (and valuable energy and money) by hiring an expert to do those items on your to-do list.
With all that freed up time, you can reinvest your time to make more money. Develop yourself or your skills, take on extra clients — whatever the case may be. This ultimately earns you more money and makes up for the cash you spent hiring someone else. Investing your time in the areas where you're strongest is crucial to building wealth.
5. Find a Mentor or Advisor You Can Trust
Many people who know they want to save for the future are quick to hire an accountant or some other type of professional to help them get there. Financial planners are a great addition to your team and they can ask the hard questions about where your money is going and whether that aligns with your goals.
But the goal shouldn’t be to find someone who just crunches the numbers for you. Instead, focus your efforts on finding someone who will offer advice, educate you, and help you to understand and improve your mindset.
That might mean an advisor who offers encouragement or shares new strategies for success. And yes — sometimes even an advisor who’s honest enough to say it straight and talk you out of that not-so-smart investment idea.
What Do You Want Your Life to Look Like?
Anyone can achieve a wealth mindset and grow their wealth, but it’s an ongoing journey you can’t complete overnight. You need a support team by your side to give honest advice, strengthen your portfolio with expert strategies, and help you achieve financial freedom.
At Black Mammoth, we’ve got your back. Developing a wealth mindset and achieving financial freedom isn’t just for the ultra-wealthy — and we’re made it our mission to prove that. With a holistic approach to financial planning and an expert team that has your best interests in mind, we’re with you every step of the way. Join our family and start building the life you want!