What's Mindset Got to do With it?

The more research that is done, the more we are discovering how our mindset and worldview are interconnected with our stress levels, our health, and our overall relationships with those around us. Studies have time and time again shown that stress can kill us and constant negativity literally reshapes our brain. Dr. Hanson wrote about this a little bit in this article from Psychology Today. “Our experiences and thoughts can lead to the growth of new synapses and even change our genes, altering the very structure of our brain. Or, as Hanson writes, “the brain takes its shape from what the mind rests upon.” But how does your mindset impact investing? We know how to quantify our money. We know how to quantify the value of the property we own, but how do we give value to non-concrete things such as worldview? I sat down with Abdullah Ahmad the CEO of Provision Capital to discuss this phenomenon. “What you have got to find out, is what are the most overlooked assets and why are they overlooked?” Abdullah said, while handwriting visuals on a whiteboard. “What people aren’t factoring into the equation is that habits become money.” For Abdullah this means a combination of teaching yourself the lifelong skill of putting aside money. He gave the analogy of hosting a dinner guest for friends but also wanting to save a dish for your child. “You wouldn’t announce to your guests to save something for your child, right?” he laughs, “ instead, before the meal, you would set aside a plate of food for your child and then people would adjust their wants and needs based on what was available.” People are often willing to cite when it is they will start investing. It’s once they get a raise after they buy a house after they have children. This mindset is created by thinking there is not enough. When in actuality, if you budget your resources from every paycheck and instead of telling yourself you will save or invest with what’s leftover, and instead set aside fifteen or twenty percent of your budget, you will naturally adjust to what you have left and make it stretch. Abdullah demonstrated this to me by giving the example of a man he knows who makes two thousand a month but saves twenty percent of that for investment. “By the end of the year that man will have $4,800 in savings but what isn’t yet quantifiable yet is that he will have taught himself a lifetime skill in saving and that habit will turn into money.” There are many ways to begin investing and it doesn’t have to start with finances. It can start by investing in yourself through reading, additional training, or hardwiring yourself, to scoop out twenty percent of your paycheck and put it aside. It may not be fun in the beginning, but it’s an investment. What are your thoughts on mindset and investing? How do you think your personal views impact your saving habits? What are non-concrete ways you like to invest in yourself? We’d love to hear from you!