Money is made or lost in the mind. What goes on in your minds will reflect your actions. Those actions done on a continuous basis will tend to be your reality. There are three money mindsets that we tend to have and continuously move between one to the other.
- Survival
This is the most basic. We think, plan and look for ways to meet our basic needs. This includes food, rent/mortgage, water, debt payments, transport, phone bills, electricity school fees etc. These are priority expenses. Your life would be adversely affected if you cannot do them. However, the survival mentality goes beyond just those expenses. It can also include the things that make our lives convenient although we don’t necessarily need. For example; entertainment, holidays, books, magazines etc. A lot of people get stuck here. They think because they are enjoying life, they must be doing well. They may look better and more comfortable than those who are trying to manage basic expenses but at the end of the day, it is still a survival mentality.
The goal is still what you need for today whether its rent or a premium drink at the bar. You only think survival so you will only get survival. These days’ survival has been made to look really good such that people are aspiring to survive. We cheat ourselves through sentiments like YOLO and get concerned about what other people think about us. It is still survival and is short term. In this mindset, you will also tend to hang out with other survivors. ‘We’ definitely need to survive. It is perfectly okay to enjoy life but that can’t be it. Part of our brains have to be used for something else.
2. Achiever
This mindset wants to get things done. You have actions going on in your life that show you don’t live in survival. Let’s just start with the fact that you save. If you lost your income suddenly today, you are not in an instant mess. At least you will have a few months of breathing space. You may be in a chama and you go for meetings often. You may also have invested land, shares, deposits or funds personally. You will sit with fellow achievers and talk about what investments you could possibly make. You could even be running a business and it works. It pays you, your employees and customers are happy.
The trap with achieving is that you get caught up in the doing and in many cases think that it makes you wealthy. To an achiever, action is equal to success especially when they have nice amounts in their bank or investment accounts to prove it. In our classes, we have had achievers who have so many things going on but it is unclear which direction they are going. They know the right things to do like invest or save so they do them. However, underneath all that, there is lack of intention. Many achievers think they are okay but they find themselves in trouble because of not evolving to the next mindset. Achieving is a good start, but it doesn’t end there.
3. Strategic
We keep hearing about how only a small proportion of people own majority of the worlds wealth. I think only a small proportion of people think strategically and have cultivated the discipline and patience to do so. Let’s use an example. I know a consultant who has decided to take a sabbatical for six months. He had actually saved to buy a car but has now decided to use those funds to sustain himself during this period. A survivor cannot do this – they just haven’t planned financially for this and the car may currently be more important as it makes them look good. An achiever may not comprehend stepping aside for this amount of time and do what looks like nothing.
Somebody strategic will understand this move. He intends to develop himself, think and come back stronger and with better value for his consultancy business. He needs time away from day to day to do this. Strategic thinkers remove themselves from ‘busyness’ to see further than most people can. They are very clear what they want to achieve so it’s not just about having assets. They know the answer to what those assets will do for them and they started working on it years ago. They do fewer things that take time but those that have a higher result. Many people who have created wealth have not done it from many things but fewer intentional actions and willingness to take the risks to prepare themselves and invest the time and resources. Theirs is always a long term game whether it shows up in how this consultant did it, growing a business or certain investments.
Waceke runs programs on Entrepreneurship and Personal Finance Management. Registration is currently open and ongoing through our website centonomy.com For more information get in touch with her through waceken@centonomy.com /Facebook-Waceke Nduati /Tweet @cekenduati