Why Your Mindset Might be Your Enemy
Learn the power of perspective before you start investing and building wealth
Have you ever dreamt of building wealth, enjoying your freedom, coming out of a vicious financial circle? But how many of us change our circumstances, and why? My friend Alice asked me how to persuade someone to invest in cryptocurrency. The simple answer is: you can’t! You can’t persuade someone to take a specific action if their mindset works against them. Changing someone’s money mindset from “I can’t,””I don’t know how", “this is not for me”, “it’s too complicated", to “I’m willing to learn,” I’ll give it a try,” takes commitment and willingness to work on shifting your money beliefs.
Statistics say that 45% of UK adults, or 24 million people, felt that keeping up with domestic bills and credit commitments was somewhat of a burden, according to The Financial Lives 2022 survey. Half of them didn’t have savings to cover 3 months of expenses, suggesting many lack the financial flexibility to save and invest. This situation is similar for people in Europe, US and many worldwide countries.
You just have to glance over social media to see young professionals earning a good living entangled in unhealthy spending habits, bad debt and a stark lack of financial education. We have so much access to information, so many tools at our disposal to learn, to invest, to generate additional income, and yet the numbers tell a different story.
What else is behind these statistics? Could our mindset towards money be influencing this situation? Our attitude towards both making and spending money has a significant impact on our ability to create wealth and change our financial circumstances. We’ve been educated to believe that if we work hard, we can build wealth. If this was true 30-40 years ago, it’s not the case today.
Taking a look at my own life, I was raised with a working wage mentality and I lived like that for a good many years. Financial education was a strange concept until my late 30s. All I was ever told about money was to save it. Nobody explained how money works, how inflation impacts your savings, or about investing. I was forced into entrepreneurship by circumstances, not because my money mindset had shifted somehow by miracle. The shift took time, and as my friend Monica writes in one of her articles about the relationship between money and mind:
“Each of us has a unique financial journey that's interwoven with the fabric of our lives, and it's in these stories that we find the lessons and the catalysts for change.” - Unseen Wealth: The Financial Strength You're Not Using Yet
Having a university degree doesn’t guarantee you’ll know more about money. Schools and universities prepares students for life in work, it doesn’t teach how to build a business, how to invest or how to generate wealth. The drive to learn about money has to come from within you, and you need to ask yourself why, what is the end goal I’m trying to achieve?
Many people have turned to cryptocurrency investing trying to change their life, their circumstances, without knowing much about money or cryptocurrency. I searched on youtube to see what gets the most views. I used two search terms, “crypto” and “crypto education”, and then I filtered the results by highest number of views and videos published in the past one week.
The first problem I encountered was finding crypto education videos posted in the past one week, so I had to alter my filtering criteria to “past month”. Still no luck, I couldn’t anything remotely educational. I changed again my search filters to “this year” and although some videos were there, most of them talked about teaching people how to “become a trader in 30 days”. I don’t think that qualifies as crypto education so I removed the time filter altogether and then I got some mixed results, but at least with educational content.
The number of views varies, with some educational content doing well, but it doesn’t come up in the first 5-10 results unless you’re very specific. As for generic crypto “make money quick” type of content, that gets hundreds of thousands views in just hours, but it lacks quality and the focus is on making it big, fast. For example, this Wednesday Bitcoin price went down to 65k USD and YouTube was exploding with videos either talking about how the market is crashing, or what altcoins to buy.
I understand, if you’re a beginner looking to learn about crypto, it’s not going to be easy finding the right information. Don’t get me wrong, we need to learn about trading too, but ultimately, looking to trade something you don’t understand is pure gambling. That’s not an investor mindset, that’s a gambler mentality that works against you.
If you want to develop an investor mindset, you need to understand how you think about money and what risk level you’re comfortable with to be able to cash in on the opportunities available in traditional or cryptocurrency markets.
You need to shift your perspective from short-term gains to long-term growth and from mere saving to actively investing:
Ask yourself what is the ultimate goal: buying a home, financial freedom, retirement, etc. Being clear will motivate you to learn, to take one step after another and keep building that investor mindset.
Read about compound interest, investment vehicles, market dynamics, cryptocurrency technology and anything that might help educate you financially.
Don’t go overboard trying to learn everything, read everything, it will mentally and emotionally drain you and you’ll end up making investment errors.
Start investing small amounts on regular basis (weekly, monthly, etc.). If you can only afford £10, that’s what you start with. There is no rule around this.
Be patient, change doesn’t happen suddenly. Social media influencers will have you believe you need hundreds and thousands to invest and build wealth. The reality is that you start where you can, when you can, and when you have that extra £10 to put aside for investments.
Be careful who you follow, who you get your information from. If someone promises you the moon, you’ll get nothing but dust. Find someone to mentor you, not someone that promises you a list of quick wins over a youtube channel or instagram account. They’ll dump on you and you’ll not only lose your money, but you’ll go back to “this is not for me” belief.
Practice gratitude and mindfulness. It’s not as pretentious as it sounds. Sometimes a simple “I can do this and I am willing to try” is a good start.
Keep a positive attitude and surround yourself with positive people. The attitudes and behaviours of friends, family, and social networks can significantly impact your money mindset. Join a community of likeminded people who are also on a similar journey. Sharing experiences and asking questions will aid in cultivating a mindset that views money as a tool for achieving your dreams and creating a life of abundance.
Time and time again I’ve seen my friends and family not taking the jump to invest even small amounts of money. The reasons are always the same: procrastination and fear.
Many people understand the importance of investing but continually put off taking action. This procrastination can be due to fear, overwhelm, or simply not knowing where to start. Over time, inaction becomes a habit, and opportunities for growth are missed. Every time Bitcoin price jumps to an all time high, they start asking -should I buy now?- and that’s usually not the right time. When price goes down significantly, they feel a sort of validation for their inaction, and they remain stuck in their procrastination cycle.
If you want to learn more about cryptocurrencies send me a message today.
We live in a culture of instant gratification that can make it challenging to adopt the long-term perspective necessary for investing. Focusing on immediate rewards leads to spending rather than investing or to speculative investing seeking quick profits, rather than building wealth over time.
Too many choices become a blocker leading to analysis paralysis. Without a clear understanding of how different investments work or how to evaluate them, it's tempting to avoid making any choice at all. Stick to major stocks, indices or cryptocurrencies. Build an accumulating habit, don’t seek the instant reward.
You need to recognise and work to eliminate deep-seated beliefs such as "money is the root of all evil," or "investing is only for the rich." Beliefs like these can subconsciously deter you from exploring investment opportunities. Understand that money is a tool for growth, not the end goal. Money is neither good nor bad, it’s an instrument to enable you to live a decent life, so try to avoid emotional attachment to money. You can read this substack to get tips and insights about your money mindset and how to start changing your relationship with money.
Have you ever heard of lifestyle inflation? That’s when your spending grows as your income increases. Look closely at your spending needs because spending more as you earn more leaves you with little to no money for investing. If you constantly adjust your standard of living to consume any surplus income, you’ll be maintaining a cycle of paycheck-to-paycheck living despite earning more.
The power to start growing an investor mindset is in your hands! It’s your journey, your decision when and why to start. There are a lot of good resources and great people who can teach you about money, investing, where and how to start, but as long as your mind thinks different, your mindset is your enemy, not your friend. It will constantly pull you back to the same old beliefs you grew up with, keeping you in the same money cycle for life.
If you want to change your life, your circumstances, then analyse what your mind says about money. This is not advice about how to become rich, this is about making your life easier, about stopping the struggle with money, breaking the cycle for yourself, your family, your children. Whatever your circumstances, invest in your knowledge and changing your mindset so that you can then invest in your future life.
Thanks for bearing with me until the end and have a great weekend ahead!
Cheers,
Veronica
Veronica, this article is very relevant as people tell me, "I don't have $64K to invest in BTC. You have helped me understand to invest in small amounts of ETH and BTC over time....to your point: "Start investing small amounts on regular basis (weekly, monthly, etc.). If you can only afford £10, that’s what you start with. There is no rule around this."So, investing doesn't have to feel so daunting.