APRIL 8, 2015 : USIERE UKO
Author and personal finance coach, Usiere Uko, concludes the write up on the importance of mindset in achieving financial goals
In my last article ‘Success is 80 per cent psychology’; I stated the fact that “Poverty is a mindset, not the state of your wallet, bank account or finances” and used the ‘be – do – have’ model to illustrate. Based on feedback and request for further clarification, I will focus on the poverty mindset in this article.
I am not surprised at the questions as it took me a while to gain this understanding. For most of my adult years, I believed that poverty had to do with lack of money and the solution was of course more money. I came to realise that more money did not solve the problem. If I did not change my money management philosophy, I would end up trapped in the rat race, repeating what I saw people around me doing.
You are not broke because you don’t have money. You are broke because of the poor choices you made when money comes into your hands. The way you currently manage your finances is not the only way. There are other ways, and you have the power to choose.
We are creatures of habits
Each time money comes into your hands, you are presented with choices whether you are aware or not. The problem is that we do not stop to think before we spend. We spend on reflex, the way we wear our trousers for example. You don’t stop to think which leg should go in first. As a matter of fact if you are asked which leg of the trouser you wear first, you may be forced to think before you can answer. I could not answer the question myself. I had to go to my closet, pick a trouser and observe which leg went in first (the left leg). We do it without thinking. It boils down to one deadly thing called habits. It can be your greatest ally (if it moves you towards where you are going) or your worst enemy (if it sabotages your goals).
Most of the things we do are without thinking. Which leg first hits the ground when we wake up, our morning rituals and the sequence of activities (e.g. do you brush your teeth before taking your bath or the other way round?) Some of us take the same road to work every day. We think the same thoughts and do the same things – and get the same results. It is your mindset that produces actions that over time become habits.
Our empty or fat wallets are as a result of reflex actions we take when money gets into our hands. Nigeria is poor today because of the way we managed our income in the past. There are countries that made a fraction of our revenue and are much richer than us. Each time money gets into your hands, you are automatically at a polling booth. Whether you know it or not, you are voting for your financial future – either to remain poor, middle class or rich. Each vote adds up over time and the result shows up as your financial reality. Most people vote to remain poor, as poor is the incumbent government – what they are used to.
Habits are formed when we do things over and over again until it is hard wired into our brain – we don’t need to think about it again. We can do without thinking. Habits are not destiny. We can change them. It is not easy but it is doable. Mindsets give birth to the actions that form habits. If you don’t change what you are doing, you will keep getting what you are getting.
Symptoms of poverty mindset
The underlying thought pattern behind the poverty mindset is the lack mentality – the belief that wealth is limited and you need to grab what you can. You need to look out for yourself first or nobody will. This mindset drives us to focus on what we can get rather than what we can give or how to produce more with what we have. Consequently, rather than use our creativity to innovate or produce more, we focus on ourselves – our needs and desires. Unfortunately, you cannot become rich by focussing on yourself. If you don’t solve problems for people through products or services, nobody will give you money. The more people you serve, the more money you make.
So focussing on self is one symptom of the poverty mentality. This manifest in what has become popularly known as WIIFM. This is the most popular FM station worldwide and is where most people leave their dial. It stands ‘What’s In It For Me?’ The moment you find yourself in any situation, the first thing that comes to mind to is what you have to gain. What is your benefit? If you are looking for a job, WIIFM is primarily concerned with pay package and fringe benefits rather than bringing solutions. The WIIFM job seeker would rather spend donkey years looking for any job rather than focus on what service he can render to solve business problems. When a WIIFM starts a business, the focus is on income rather than value added. The central focus is I, Me, Myself.
Another symptom of poverty mindset is focus on consumption rather than production or investment. The moment money gets into your hands; your first thought that comes to mind is – spend. Spending takes a higher priority than saving. You spend first and save what is left. People with this mindset typically don’t save because the money is not enough for saving after spending. Essentially they are earning to spend.
Poverty mindset can manifest in short term thing. You want what you want and you want it now. You don’t think about the consequences of having it now. You don’t think five, 10, 20 years etc ahead. That is God’s job. Since you think short term, you often miss the consequences of your actions which show up in the medium to long term. Opportunity cost is not in your dictionary. When you decide to spend on a certain item, it does not occur to you that you starve another item of funds, items that may be more important than what you are spending on.
Lack of clear financial goals is a symptom of poverty mindset. You spend money aimlessly. There is no plan, sense of direction or destination, you are just doing what others are doing, others who are trying to do what you are doing.
Another symptom of poverty mentality is not taking responsibility for your situation, but rather blaming it on other people or circumstances. In other words, you are not in control of your affairs. Since it is not your fault, there is nothing you can do about it. You always have an excuse handy, and when you manage to decide to do something, you postpone it till tomorrow.
People with poverty mindset always flock together. They comfort themselves with their excuses, complaining, murmuring and playing the blame game, waiting for their luck to change.
For questions and comments, you can contact me at usiere@gmail.com. Follow or tweet at me on twitter @usiere, 08106788187 text only.
source:PUNCH.
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