Tag Archives: Mindset

Habits of the Wealthy Anyone Can Adopt

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“The reason why someone is either rich or poor can be traced back to daily habits.” Tom Corley, author of “Rich Habits: The Daily Success Habits of Wealthy Individuals”

Replace bad habits and behaviors. 

Aristotle, the 4th Century B.C. Greek philosopher, was attributed as saying, “We are what we repeatedly do. Excellence then, is not an act, but a habit.”

It has been said that nature abhors a vacuum, and the same can be said about habits and behaviors; it’s hard to replace a bad habit or behavior with nothing.

Instead of ceasing a bad financial habit or behavior, investors need to replace them with positive and successful financial habits and behaviors.

Rather than liquidating an account, encourage a replacement behavior like rebalancing, tax-loss harvesting, making more incremental portfolio adjustments, or putting in “crash bids” for high-quality stocks that may be trading at a discount.

It’s easy for individuals to be disorganized, without vision, undirected and at the mercy of poor habits. Embracing good habits often takes ficus, effort and desire to improve. Here are eight rich habits:

Habit #1: Exercise.

Exercised an average of 30 minutes, four days a week.

Habit #2: Build relationships.

Keep a running list of positive influencers in your life and regularly connect with them.

Habit #3: Visualize your goals.

Look at your goals—each set with an expiration date and action plan—when you wakes up and before bed. Attack goals with intensity. Keep goals top of mind, and always in sight. This will yield big results.

Habit #4: Read. A lot.

Start reading two books a month—focusing on emotional well-being, leadership, personal finance, and health

Habit #5: Practice affirmations.

Positive mindset provides a huge influence on one’s quality of life. The more you like yourself, the higher your self-esteem and well-being. Practice daily affirmations related to the most important areas of your life, focusing on faith, family and professional career.

The key to successful affirmations is choosing a mantra that’s tied to a dream and a realistic goal that are specific, achievable and true: “I’m working 10 extra hours per week to make $100,000 by next year.”

Habit #6: Volunteer.

There are many reasons to volunteer; use the opportunity to expand your network of like-minded people. It is an opportunities to give back and to create relationships with high-level thinkers.

Habit #7: Confide in a mentor who’s been in your shoes.

The most successful people on earth value mentors who’ve walked in their shoes and made it to the other side.

Habit #8: Practice gratitude.

Meditate or focus for a few minutes each morning and evening on what your grateful: spouse, kids, job and friends, to name a few. This habit helps you pay more attention to what’s going great in your life, puts life in the correct perspective, and keeps you focused on always moving forward with the right attitude.

Henry David Thoreau once said, “The mass of men lead lives of quiet desperation.”

If you want to remain unrewarded, unfulfilled and ultimately unhappy, then continue to accept your habits which are not useful to fulfilling your aspirations, dreams and desires.

Bonus Habit:

“If you want to become really wealthy, you must have your money work for you. The amount you get paid for your personal effort is relatively small compared with the amount you can earn by having your money make money.” John D. Rockefeller

References:

  1. https://grow.acorns.com/7-daily-rich-habits-anyone-can-adopt/
  2. https://grow.acorns.com/money-mistakes-wealthy-people-dont-make/

Staying Physically Active and Socially Connected

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Physical distancing, not social distancing is mandated

Blame psychology for why many Americans still cannot accept the gravity of the coronavirus pandemic.

  • First, foresight is not a particular skill for most of us, experts say.
  • And “live free or die” is more than a slogan; it’s an apt description for the mindset of many Americans.
  • Finally, it is hard to assess the threat of an enemy you can’t see.

American mindset is another reason it’s so hard to enforce strict public health measures. Americans are independent-minded and don’t willingly sacrifice personal freedom for the sake of the wider society. That’s especially so for people who distrust science, detest government regulations and have never seen a situation like this pandemic with their own eyes.

Image of SARS-CoV-2, virus that causes COVID-19

Social Distancing

With the advent of the pandemic, we have been hearing a lot about “social distancing”, which according to governments and medical authorities mean we should keep at least 6 feet apart from others, as much as possible.

But clearly, it’s about keeping your physical distance at least six feet from others and not about increasing your social distance from family, friends and neighbors.

Governmental authorities screwed the pooch on the phrasing of social distancing. The term “social distancing” is not only a misnomer, it is exactly the opposite of what people should do during the current pandemic.

During a time of great fear and uncertainty, it’s important to stay connected to people that matter most in your life. Whether it be with friends or family, social interaction is important for communities. It keeps us feeling like we’re all a part of something greater than ourselves.

Stay Physically and Socially Active

Staying active can help you stay healthy both physically and emotionally. Take a walk. Take a virtual exercise or dance glass.

Staying socially connected is an important part of our emotional health. Human beings are social animals. Man was not created to be or exist alone. Most people need a certain amount of social interaction every week, or they start to feel isolated and alone. Social interaction can still occur, even as we retire and age. It just needs to occur in a different way when compared the our working years .

And remember, we must keep our physical distance to hinder the virus spread. But, we must stay emotionally and socially connected with our family and friends. Go out of your way to reach out to those who are socially alone and isolated.

We are in this together and awe will overcome this together. As a result, you should keep a physical distance at least 6 feet apart from others, but clearly this has nothing to do keeping socially distant from others. Instead, it’s all about keeping your physical distance from others.

References:

  1. https://psychcentral.com/blog/alone-together-why-its-physical-distancing-not-social-distancing/
  2. https://www.stripes.com/news/us/the-psychology-behind-why-it-s-hard-for-us-to-accept-a-pandemic-1.628550#

3 tips to avoid locking in losses | Mass Mutual

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By Allen Wastler
Allen Wastler is a former financial journalist with over 30-years of experience, including time at CNBC, CNN, and Knight-Ridder Newspapers.
Posted on Apr 13, 2020

After a huge market downturn and a major loss of value in your investment portfolio, the temptation to do something — anything — may be hard to resist.

But in many ways, the best action may be to take no action. Why? An investment plan is a long-term project and making changes to it based on short-term considerations is often ill-advised. That’s why financial professionals encourage people to stay calm during market sell-offs and think about long-term objectives.

“It is a tough and scary time, and not locking in losses by panic selling is critical,” said J. Todd Gentry, a financial professional with Synergy Wealth Solutions in Chesterfield, Missouri.

But even if you did resist the initial impulse to flee during a market retreat, you still need to keep some discipline about your portfolio as you wait for a market recovery. Here are some traps to avoid….Read more: Avoid Locking in Losses

Markets, as a whole, have historically bounced back from downturns with time, as the following chart illustrates.

Source: Bloomberg. The S&P 500 is an equity index that consists of the stocks of 500 large U.S. companies measured by market capitalization. The results here include the effect of reinvested dividends. You cannot invest directly in an index.

Getting Better at Something

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To Get Better at Something, Ask Yourself These Two Questions

Anyone can get better and improve at anything, including personal finance, with the right mindset and deliberate action. That includes getting better at saving by paying yourself first, investing for the long-term and accumulating wealth.

But in order to get better, individuals need to honestly answer “yes” to two very basic questions. Those two questions are:

  1. Do you want to do or get better?
  2. Are you willing to feel the discomfort of putting in more effort and trying new things that will feel weird and different and won’t work right away? To fail?

If the answer is “no” to either question, then it would be foolish for an individual to believe they can improve and get better by doing things the way they’ve always done it or thinking the same way they’ve always thought. Additionally, it would prove a waste of time and effort for any coach to undertake a client or player to improve their skills who do not answer yes to both questions.

Essentially, getting better, especially at saving and investing, is about wanting to get better by embracing a positive mindset and is about having a willingness to experience discomfort. It is important to know that you can become better at anything if your willing to do what is necessary.

But you will not get better if 1) you don’t believe you can and 2) you aren’t willing to accept the discomfort of doing things differently and do whatever it takes to get better.

Learning anything new means moments of feeling uncomfortable. You will need to act in ways that are unfamiliar and take risks that are new. Try things that, in many cases, will be initially frustrating because they won’t work the first time.

You are guaranteed to feel awkward and possibly experience failure for the first time. You will make mistakes. You may be embarrassed or even feel shame, especially if you are accustomed to succeeding.

The key take-away is that answering these two questions yes are a prerequisite to growth and achieving financial success.

  1. https://hbrascend.org/topics/if-you-want-to-get-better-at-something-ask-yourself-these-two-questions/

Financial Life Planning

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“People have the potential to live longer than any other time in history. This gift of extra time requires that we fundamentally redefine retirement and our life journeys leading up to it.” What is “Retirement’?  Transamerica Center for Retirement Studies

Financial Life Planning connects the dots between our financial realities, our values and the lives we long to live. It helps both pre-retirees and retirees identify their core values and connect them with their financial decisions and life goals. It is an financial planning and investing approach which helps people manage their portfolio.

Financial life plan focuses on the human side of financial planning, including people’s anxiety, habits, behaviors and other emotions (e.g., fear and greed) tied to investing money and accumulating wealth. People struggling with retirement and other finances really need a plan that helps them manage their attitudes, habits, goals and resources.

George Kinder, known to most as the “father” of the life planning, is the founder of Kinder Institute. He views life planning as “a way of holistically delivering financial planning that focuses on delving into people’s real goals, beyond just their financial concerns, in an effort to help them use their money to deliver freedom into their lives”.

Financial Life Planning combines personal finance and wellness. It spends time to discussing life planning and to building an intentional life. There is more to living a life of freedom and purpose than money and wealth. To live a life of freedom and purpose, people are encouraged to consider George Kinder’s famous Three Questions, which are:

Question 1: Design Your Life

“I want you to imagine that you are financially secure, that you have enough money to take care of your needs, now and in the future. The question is, how would you live your life? What would you do with the money? Would you change anything? Let yourself go. Don’t hold back your dreams. Describe a life that is complete, that is richly yours.”

Question 2: You have less time

“This time, you visit your doctor who tells you that you have five to ten years left to live. The good part is that you won’t ever feel sick. The bad news is that you will have no notice of the moment of your death. What will you do in the time you have remaining to live? Will you change your life, and how will you do it?”

Question 3: Today’s the day

“This time, your doctor shocks you with the news that you have only one day left to live. Notice what feelings arise as you confront your very real mortality. Ask yourself: What dreams will be left unfulfilled? What do I wish I had finished or had been? What do I wish I had done? ”

Society tends to attribute personal and professional success to the acquisition of material things and the accumulation of wealth. Most of us find ourselves inextricably caught in a cycle of earning, spending, and investing often induced by societal and peer pressures to fit into a perceived definition of success.

And in spite of this, how many times have we heard from even well-to-do friends, acquaintances and relatives that they are not exactly happy with how their lives have shaped up, how they don’t enjoy what they are doing, how they are drowning in debt or living paycheck to paycheck, or how they don’t have any time to pursue their dreams and interests?

If you look closely, there is a common undercurrent running across all these statements that we find ourselves ‘enslaved’ to a script or lifestyle broadcast by social media which was not exactly aligned to our values and innermost dreams.

No one ever wanted to spend more time in the office

“No one ever said on their deathbed ‘I wish I’d spent more time at the office.’ ” Harold Kushner

Having read many anecdotal reports regarding end of life issues, it is important what truly matters to most people in the end. Typically, people do not say that they wish they had earned more money, spent more time at work, or had one more side hustle.

Most often instead, they wish they had spent more time with family and friends. They had more experiences with those that they love. They had taken better care of their health and bodies over the decades. They had saved more and planned better for their retirement. And finally, they wanted to make sure that those they left behind would be taken care of once they were gone.

References:

  1. https://www.kiplinger.com/article/retirement/T023-C000-S004-retirees-build-a-financial-plan-based-on-you.html
  2. https://www.kinderinstitute.com
  3. https://www.kitces.com/blog/george-kinder-institute-life-planning-podcast-seven-stages-maturity/
  4. Podcast: #FASuccess Ep 015: Why Life Planning Is Simply Financial Planning Done Right With George Kinder

Accumulating Wealth

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The wealthy accumulate wealth by being frugal

Frugality – a commitment to saving, spending less, and sticking to a budget – is a key factor in accumulating wealth, according to DataPoints’ founder, Dr. Sarah Stanley Fallaw.  Dr. Fallaw is also the co-authored “The Next Millionaire Next Door: Enduring Strategies for Building Wealth“.

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In an University of Georgia’s financial planning performance lab research paper examining the topic of “what does it take to build wealth over time”, the key findings were that those who were successful at accumulating wealth frequently exhibited the following behaviors:

  • Spending less than they earned
  • Having a long-term outlook on their financial future
  • Maintaining sound financial records
  • Keeping up with financial markets
  • Saving regardless of income level

Essentially, her research shows that anyone can accumulate wealth if they know the right steps to take. And, if individuals possess a certain set of characteristics, they may be more likely to become wealthy, according to Dr. Fallaw, who is also director of research for the Affluent Market Institute.

In her research, she found that six behaviours, which she called “wealth factors,” are related to net worth potential, regardless of age or income:

  • Frugality, or a commitment to saving, spending less, and sticking to a budget
  • Confidence in financial management, investing, and household leadership
  • Responsibility, which involves accepting your role in financial outcomes and believing that luck plays little role
  • Planning, or setting goals for your financial future
  • Focus on seeing tasks through to their completion without being distracted
  • Social indifference, or not succumbing to social pressure to buy the latest thing

In order to accumulate wealth, it is imperative for investors to understand that their underlying financial behavior and habits matter significantly. DataPoints research supports the notion that, “…individuals who successfully accumulate wealth often engage in basic and identifiable productive financial management behaviors.” And, they are often “socially indifferent” to the latest “must haves” and they resist the “lifestyle creep,” which is the tendency to spend more whenever they earn more.

To properly build wealth, financial experts recommend saving 20% of your income and living off the remaining 80%. Many wealthy individuals, who religiously follow this principle, espoused the freedom that comes with spending and living below their means.

Reference

  1. Grable, J. E., Kruger, M., & Fallaw, S. S. (2017). An Assessment of Wealth Accumulation Tasks and Behaviors. Journal of Financial Service Professionals, 71(1), 55-70.
  2. https://www.datapoints.com/2017/04/06/tasks-of-wealth-accumulators/
  3. https://apple.news/A4YIQ2ahsSKqzUG3rh1PmTQ

Democratic Socialism on the Rise in America

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“The strongest argument for socialism is that it sounds good. The strongest argument against socialism is that it doesn’t work. But those who live by words will always have a soft spot in their hearts for socialism because it sounds so good.” Thomas Sowell

Despite winning the 2020 Nevada Democratic Caucuses by a wide margin, most Americans fail to appreciate that Senator and Presidential candidate Bernie Sanders (I-VT) is not a liberal Democrat or a registered member of the Democratic Party. He is a registered Independent and an unapologetic self-professed Democratic Socialist.

However, as a Senator, he caucuses and aligns himself with the Democrat minority on the floor of the U.S. Senate. And, in the 2020 Presidential primaries, he campaigns and runs as a Democrat in his grassroots attempt to win the party’s nomination.

Additionally, billionaire Democratic Presidential candidate Mike Bloomberg, during a debate stage attack, stated that Senator Bernie Sanders is, “the best known Socialist in America”, and is a multi-millionaire who owns three houses (one in Washington, D.C. and two in Vermont).

According to Roger Altman, Evercore Founder and Senior Chairman, he conveyed on CNBC recently conveyed that under Bernie’s proposed socialist policies:

  1. If you have an employer provided health insurance plan, you’ll lose it.
  2. If you want to decriminalize the southern border, so if individuals are crossing the border illegally, they’ll get the equivalent of a traffic ticket.
  3. If you believe like Bernie that everyone in prison should have the right to vote, then he is your man.
  4. In the important battleground state of Florida, the philosophy of socialism carries very negative connotations and distasteful visceral reminders to many in the Cuban-American, Venezuelan, and Puerto Rican communities within the state.

Only something like ten percent of Americans believe in those Sanders positions. Maybe magic will happen. Record of prediction is unblemished with success.

“Socialism is a philosophy of failure, the creed of ignorance, and the gospel of envy, its inherent virtue is the equal sharing of misery.” Winston Churchill

World history demonstrates that global Democratic Socialists in the Western Hemisphere have often abandoned the “Democratic” part of their byline and replaced it with authoritarian actions like in Venezuela and Nicaragua. Although, this is believed highly unlikely with the many safeguards guaranteed in the U.S. Constitution.

If elected, Americans should not be surprised when a potentially future President Sanders attempts to steer the country down the path of the failed programs and policies common within socialism. But, socialism has been successful in bringing “shared economic misery” to the citizens of countries like Cube, Venezuela and the former Soviet Union and East Germany.

References:

  1. https://www.nytimes.com/interactive/2020/us/elections/bernie-sanders.html
  2. Roger Altman, Evercore Founder and Senior Chairman, CNBC Squawk on the Street

Ideas for Frugal Living | Three Life Lessons | Fidelity

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“The lessons they taught us about money—about not spending more than we have, saving what we can, and splurging occasionally and mindfully”

Three (3) lasting lessons from my frugal parent

Frugal living can help separate the important financial expenses from the not so important. Learn helpful lessons and ideas on frugal living here.

BY JEANNE THOMPSON FROM FIDELITY – 06/07/2019

I’ll never forget my first “real” vacation.

Most of our family vacations were camping trips where we slept together in a tent or a pop-up trailer and my mom cooked for my 4 siblings and me at the campsite. But the summer after fifth grade, my father decided to take me, my mom, and my 2 older sisters with him on a business trip to California.

That trip really stood out. I remember relaxing by the pool in sunny San Diego, sipping Shirley Temples with my sisters. We were fascinated by the elevators in our big hotel and rode them up and down until we were sternly told to stop. Simply put, it was paradise.

This trip was an unusual extravagance for my parents, too. You can’t raise 5 children on a limited income without being very frugal. And my parents, who were both first-generation Americans, were used to getting by on very little. Excess was not an option. At Christmas, my mom would save nice wrapping paper and reuse it; boxes were also recycled for many holidays to come. Folding a little piece of wrapping paper in half, writing a note inside, and taping it to a gift worked just as well as buying a greeting card. She reused everything from tin foil to plastic baggies. Her approach to money and possessions was pretty consistent: “Make do with what you have.”

These habits and quirks used to make us laugh. Today, I appreciate the example my parents set. I resist spending money on big-ticket items. My car, for instance, is a 2010 model and has 150,000 miles on it. And most of the furniture in our house is at least a decade old (if not a few decades). I’m not about spending a lot on furniture —with a teenage son, our couch becomes a dumping ground for lacrosse equipment more often than not. I even save nice wrapping paper from time to time, much to the amusement of my kids. And because of the warm memories from that long-ago California trip, I’d much rather spend money on experiences my family can enjoy, like vacations, than on stuff.

Maybe it’s wishful thinking, but I like to believe that my parents’ mindful approach to spending lives on in my kids, who seem to appreciate the value of a dollar on some days at least. My college-age daughter takes pride in her 5-star rating on a ride-hailing app because it entitles her to discounts and coupons. My son, a high school senior, is already savvy about mutual funds and 401(k)s—thanks to conversations he tunes into at home and an intro to business class he takes at school. Both kids know that they need to budget for indulgences beyond the basics and that they’ll have to pay for them with money earned from their jobs.

Both of my parents are gone now, but their frugal approach to working diligently and saving money allowed them to raise kids. And not only that: They put enough away to build a nest egg that funded some retirement travel to Europe, Russia, and Alaska in their golden years. By then my father came around to reasoning: “You can’t take it with you.”

They still managed to leave something behind. The lessons they taught us about money—about not spending more than we have, saving what we can, and splurging occasionally and mindfully—are with all of us. And those occasional splurges they encouraged us to enjoy are as sweet as those long-ago Shirley Temples under the warm California sun.

— Read on www.fidelity.com/mymoney/frugal-living-ideas-and-life-lessons

A Man is What He Thinks

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“A man is literally what he thinks.” James Allen

James Allen, a British philosophical author of ‘As a Man Thinketh’, wrote, “A man is literally what he thinks, his character being the complete sum of all his thoughts. As the plant springs from, so every act of a man springs from the hidden seeds of thought, and could not have appeared without them.”

The things you choose to focus on, your thoughts, determines how you perceive the world – and influences many of the experiences you have as a result. If you focus only on the negative things in your world, the world can seem like a terrible place and your mood and outlook may suffer.

“Every one of us is the sum total of our own thoughts. We are where we are because that is exactly where we really want or feel we deserve to be, whether we’ll admit it or not.” Earl Nightingale

But when you focus on the positive things in your world, you see that the world is actually full of faith, hope, love, and joy. There is kindness and beauty that inspires people to do incredible things.  Each man holds the key to their own perception and focus, good or bad. He also hold the key to everything that enters into his life. By working patiently and intelligently upon his thoughts and focus, he may remake his life, his behaviors and transform his circumstances. 

“You are today where your thoughts have brought you; you will be tomorrow where your thoughts take you.” James Allen

Thoughts of doubt and fear never accomplished anything, and never can. They always lead to failure. Purpose, energy, power to do, and all strong thoughts cease when doubt and fear creep in.

“He who has conquered doubt and fear has conquered failure.” James Allen

The will to do springs from the knowledge that we can do. Doubt and fear are the great enemies of faith and knowledge. The people who embrace readily doubt and fear, who refuses to slay them, hinder himself at every step.

Changing the Subconscious Mind

Daily affirmations are techniques you use to begin he process of improving your life. Affirmations are simply statements that describe a goal or thought in its already completed state. Positive affirmation helps eliminate negative and limiting beliefs.

Affirmations can transform an individual’s comfort zone from a limited one keeping them trapped in mediocrity to a more expanded one where anything is possible. It helps to replace your “I can’ts” with “I cans,” and your fears and doubts with confidence and aspirations.

Affirmations are reminders to your unconscious mind to stay focused on your goals and to come up with solutions to challenges and obstacles that might get in the way.

“These things we bring on ourselves through our habitual way of thinking,”

Daily affirmations are simple, positive statements declaring specific goals in their completed states. Affirmations also hold a key to creating the life of your dreams. Successful people have long known that using willpower alone to energize their success isn’t enough.

Let go of negative beliefs

It is important to let go of and not focus on negative thoughts and images. Instead, individuals should bombard their subconscious mind with new thoughts and images that are positive and stated in the present tense.

In closing, William James said: “The greatest discovery of my generation is that human beings can alter their lives by altering their attitudes of mind. We need only in cold blood act as if the thing in question were real, and it will become infallibly real by growing into such a connection with our life that it will become real. It will become so knit with habit and emotion that our interests in it will be those which characterize belief.”

James also said,

”If you only care enough for a result, you will almost certainly attain it. If you wish to be rich, you will be rich. If you wish to be learned, you will be learned. If you wish to be good, you will be good – only you must, then, really wish these things, and wish them exclusively, and not wish at the same time a hundred other incompatible things just as strongly.”

References:

  1. Allen, James, As a Man Thinketh: Original 1902 Edition
  2. http://www.jamesallenlibrary.com/authors/james-allen/as-a-man-thinketh
  3. https://www.jackcanfield.com/blog/practice-daily-affirmations/
  4. https://www.jackcanfield.com/blog/become-a-millionaire-never-too-late/