Category Archives: Personal Development

Money & Happiness

Money can do many things.  If you have money, you can live life to the fullest.  Money enables people to cover all their necessities including food, shelter, and healthcare.  Having money is a key requirement to get the best education in the classroom and by way of traveling the world.  Money is also required if you want to add convenience and have some luxury in your life.  Money is tied to almost every aspect of life, but can money buy happiness?

In 2010, a study was conducted to determine if happiness can be increased when income is increased.  These researchers found out that it can.  There were limits though.  The researchers discovered that happiness increased with income, but only up to the amount of $75,000 per year.  People who earned over $75,000 were not happier than those who earned $75,000.

That sounded reasonable to me.  $75,000 would be enough to live a reasonably comfortable life in most parts of the country excluding New York City, San Francisco, or some of the other major coastal cities.  Even in smaller markets, $75,000 will not be enough to afford a first-class lifestyle.  It should be enough, however, to cover your needs, some wants, and have enough left to save for retirement.

A more recent study was conducted by Researchers from Harvard Business School.  This survey was given to 400 millionaires.  They were asked to rate their happiness based on a scale of 1 to 10.  This study found that the people who had at least $8,000,000 were happier than those with less than that amount.  Many agreed that they would be happier with even a little more wealth.  Most felt that they needed much more than what they currently have.  To score a perfect 10 on this happiness survey, the results stated that the millionaires who took this survey would need to have a 1,000% increase in their net worth.

In my opinion, money can buy many things, but I do not know if it can buy true happiness.  There have been times in my life when I had very little money.  Based on my current lifestyle and expenses, I have enough money to live for a couple of decades without having to work.  I feel blessed, but I do not think I am happier today compared to when I was just starting out.

Obviously, life is better with money compared to being broke, but I do not know if there is much of a difference on the happiness scale.  I view having money as the means to more options in life.  That makes me happy.  In my opinion, money equals freedom to live a life on my own terms.  That also makes me happy.

I just don’t think that money itself makes me happy.  Money pays the bills and allows me to buy things.  I am not overly materialist and don’t want for much.  Material possessions generally do not make me happy.

Accomplishment

There are a few things in life that make me truly happy.  The first is when I accomplish a goal.  Even though I am focused on early retirement, I do get a great feeling when I accomplish a goal at work.  It is not based on the praise from others.  It comes from that internal sense of accomplishment.  The same feeling of satisfaction can be found when I accomplish a home improvement project, complete a workout, finish a book, or make an improvement to my blog.  For example, I am happy that you took the time to read this post.

Laughter

I also find joy in the simple things in life.  Laughter makes me happy.  I take my work and my goals seriously, however, I do not take myself seriously.  I have been humbled enough times to say that my ego is right-sized.  A therapist friend of mine recently told me that a good sign of emotional intelligence is to have a good sense of humor and the ability to laugh.  I find it therapeutic to laugh at myself as well as to laugh at the absurdities of life.  I am also happy when other people laugh.

Nature

Spending time in the outdoors makes me happy.  I love going to the local park with my wife and our dog.  It feels great to breathe in the fresh air while hiking the trails and to take in the wildlife.  One of my favorite hobbies is spending an afternoon in my kayak bass fishing.  There are few things more exciting than catching a bass on a topwater lure.

Service

The closest that I have ever come to experiencing true happiness is when I am being of service to others.  In my experience, if you want to find pure joy, go and volunteer at your local soup kitchen.  The fear of stock market volatility quickly vanishes when you tune into the needs of those who truly have nothing.

Helping people who are less fortunate than myself gives me gratitude that lasts for weeks.  It puts my problems into perspective.  These people are not thinking about finding investments with the lowest expense ratios or finding ways to pay fewer taxes on capital gains.  These folks are literally wondering where their next meal is coming from.

My wife and I try to volunteer a few times per year.  We try to not tell anyone about it.  We Just simply show up at the food kitchen on a Saturday morning and volunteer for a few hours.  Nobody needs to know how wonderful we are.  I feel that if I talk about it, it becomes more about me than about the act of giving back.  That just reduces the degree of happiness that I find in this type of volunteering.

If you are intimidated by the thought of helping the homeless, don’t get discouraged.  There are many ways to volunteer.  It does not have to be a formal process.  Take a ride to your nearest park and bring a trash bag and gardening gloves with you.  Spend one-hour walking around the park and picking up litter.

I have found that many people in the financial independence community have discovered the joy of helping others.  A good example of this occurs at the Chautauqua Financial Independence Conference.  I have read that it is common for a day of community service to be added to these events to go along with the lectures and discussions about financial independence.

Conclusion

Can money buy happiness? I honestly don’t know for sure.  The research shows that it can up to a point for some people.  For others, it seems like happiness is based on having more.  I also don’t know if people should be basing their happiness on how much money they have.  I have found that having money is better than not having money if the rest of your life is in order.  If you have enough of it, you have more options as to how you choose to live.  That will afford you the ability to focus your time and energy on what you are passionate about.  If the concept of being free makes you happy, money is a means to that end.

 

Financial Unmanageability Transcends Money

When it comes to finding ways to better manage your finances, there are unlimited resources.  There are many great books, blogs, forums, websites, and apps.  There is not a shortage of information, tools, or even professional services.  If a person wants to make improvements when it comes to spending less, paying down debt, saving more of their earnings, or learning to invest, they could find out how to do it in a matter of minutes by doing a few simple online searches.

If the solution to finding ways to improve your financial situation is so readily available, why are so many people struggling?  Yes, we can blame the marketers for always trying to sell the newest gadget.  That excuse, however, only carries so much weight.  Consumers are more educated than ever and many tune ads out.

What if the problem is more pervasive?  What if the problem is beyond simple behavior modification? What if the problem is based on unmanageability?  Yes, the inability to have mastery over your life.

If the problem is based in unmanageability, there is not a blog or app to solve the problem.  If your life is truly unmanageable, trying to get a better handle on your financial shortcomings is just treating a symptom.  To gain control of your life, it will take a little more than spending less and saving more.

Denial

Nobody truly wants to admit their life is unmanageable.  Just like nobody wants to admit they drink, spend, eat, or gamble too much.  It is natural for many people to think, I don’t have an issue with my finances and then go spend more money.  It is common behavior for people who have addiction problems or a spiritual malady to deny what the problem is.  The thought process is like a broken record that skips the same verse over and over.  I do not have a problem with my finances – go spend more money.

Resentment

To resent is to keep going back to a negative feeling.  Instead of feeling and processing those bad or negative feelings, you spend money.  Resentment is not always based on harboring ill feeling towards someone who you believe wronged you in some way.  Resentment can also be rooted in harboring ill feelings towards someone who did exactly what you expected them to do.  The problem was that you were still not satisfied.  They were unable to fill that void that exists within you.  To find temporary relief, you continue to spend and try to fill that void with an external fix.  Unfortunately, it does not last.  After you exhale out and feel relief, you almost immediately inhale the resentment back in.

It is All About You

When you live an unmanageable life, there will always be a conflict with self.  It is all about you.  You cannot be of real use to others.  Sure, you might be physically present in their life, but are you truly living in the moment?  Or are you just physically there, but mentally bound to your troubles?  When your self-centered thoughts and feelings are the focus of your existence, it is difficult to make meaningful connections with others.

Anxiety 

You are not a bad person.  You might even do nice things for others.  You believe that you are thoughtful and caring.  You spend money on the people you care about and on those who you want to care about you. Externally that all might be true, but aren’t you just doing all those things to find more relief and to feel better about your current state of unmanageability?

Do you live in fear?  Do you spend more than you earn and panic when the bills arrive?  Do you lay awake at night and worry that you will never be able to get out from under all the debt you are in?  Do you see retirement as a possible option for others, but something that you would never be able to afford?  Do you obsess over your finances in one thought, but follow it up with more spending that pushes you further away from having healthy finances?  Do you feel hopeless?

Is this fear leading to other health concerns?  Is it leading to weight gain or panic attacks?  Have you gone to see your doctor because you feel overwhelmed?  Did your doctor put you on meds to take the edge off and to help you cope?

There is a Solution

Yes, getting your finances in order is great, but you first need to get your mind right.  I am not a therapist.  I am just a guy with a personal finance blog.  If you are honesty suffering from the symptoms that I listed above, you should seek outside help.  Find out if your health insurance covers visits to a psychologist without a referral from your primary care doctor.  If not, ask your doctor for a referral to one that they recommend.  You might have to pay a low co-pay, but it will be worth it.

There are also 12-step programs.  As I stated earlier, your spending might be just a symptom of a larger issue.  There are 12-step programs for spending, gambling, drinking, and just about any other type of obsessive disease.  It is up to you to dig deeper and decide if you think a 12-step solution would be a good fit for you.

Conclusion

Don’t beat yourself up.  Don’t wallow in guilt, shame, remorse, or any other negative feeling.  The past is the past.  It is time to move on.  Pick up the pieces.  You are not a bad person.  You might have made poor decisions and you might suffer from the disease of addiction.  After you put your own house back in order, you can make amends to those you feel you might have harmed including yourself.

There is hope.  There is also help available.  It is now up to you to find the right help that will be a catalyst for positive change.

Once you get your mind right, great things will start to happen in your life.  Not only will your financial situation improve, but every area of your life will get better.  How could it not, you will be moving away from the problem and in the solution.

You will be able to better accept people and situations as they are.  You will be able to let go of the past. You will better assimilate into the mainstream of life.  You will become more useful to the people around you.  You will finally find the peace that you have been searching for all along.

As a bonus, you should be able to better budget and save money.  Your whole life will become more manageable.  Having a few more bucks in the bank will just make life more enjoyable.

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Joining a Board of Directors

Have you ever thought about joining a board of directors for an organization that you are interested in serving?  I recently was invited to join the board of directors for a local non-profit organization.  It was flattering to be invited.  Of course, I jumped at this opportunity to be of service.

My wife has always been involved in community and church service.  Slowly, her good nature has rubbed off on me.  Over the past few years, I have volunteered to help the clients at the local chapter of The ARC to prepare for job interviews.  It is such a rewarding experience.  When I finish with a lesion, I feel that I receive back more in gratitude than they receive in development.

By joining this board, I see it as an opportunity to give back more to the community.  The board that I joined is for The Mature Workers Program that is part of the National Council on Aging.  It was a good fit for me since I work in HR for a not-for-profit healthcare organization.

There are many benefits of joining a board of directors:

Career

Joining a board of directors is a smart move for your career.  It looks great on your LinkedIn profile.  It shows that you are service orientated.  By being on a board of directors, it reflects that you are a well-respected individual by people of influence.  It shows that you see the big picture.  When a potential employer sees that you volunteer as an advisor, they interrupt it as that you want to contribute to something that is bigger than yourself.  Those are all great characteristics that might not normally stand out on a standard chronological resume.

People of Influence

Many boards attract people of influence.  It is common for boards to be made up of lawyers, executives, community leaders, business owners, and other financially independent people who are passionate about an organization or cause.  It is an opportunity to meet and interact with these folks.  It is a chance to partner with them and work to improve the organization that you now help to oversee.  It is a networking opportunity that is not readily available to everyone.  By closely interacting with these individuals, there is the potential to develop close relationships with them because you share a common bond.  Work to foster those relationships.  You never know how or when those connections can be helpful in the future.

Community Pride

Do you care about the area where you live, an organization, or a cause?  By joining a board of directors, you are able to have input.  Today, everyone has an opinion, but by being on a board of directors, you have an option that matters.  It is an opportunity to become a community leader and to develop an abundance mindset.  Even if it is on a small level, it is still a trusted role.  It is a position where people care what you have to say.  Everyone might not agree with you, but you still have a voice and a vote when it comes to the management of the organization that you serve.  It is truly a position of respect.

Leadership Skills

Being on a board of directors will help to develop you into a leader.  You will have to review and approve of budgets.  You will have input when it comes to shaping policy.  You will be presented with the goals of the organization and how management is working to reach these goals.  As the member of a board of directors, you are responsible to lead and to present input that shapes the best practices of the organization.  Your negotiation skills will be sharpened.  You will learn true team building skills as you work with other board members to shape the future direction of the organization.

How to Join

In most cases, you must be invited or elected to join a board of directors.  There are organizations, however, that are looking for people to join.  First, do research on organizations that you are interested in.  Try to identify organizations that have a mission, vision, and values that you feel strongly about.  Do some deeper digging and find out if you have any connections to the organization.  Use LinkedIn to identify possible connections.  Share your interest in the organization and look for ways to volunteer.  After you learn if the organization is a fit, make a formal request to join the board or to be nominated if the selection is based on an election.

Conclusion

The organization that I am now on the board of directors for wants to increase the number of clients that they serve.  They have an adequate marketing budget.  They run television ads, radio ads, and attend most community events where people over the age of 55 might attend.

At my first meeting, I suggested that they allocate some of the marketing money towards social media and brought up the idea of creating a blog.  The suggestion went over well.  It is going to be added as a topic for debate and to be voted upon at a future board meeting.

I have truly enjoyed my short experience serving as a board member.  It feels good to be able to give back.  It has been a privilege to volunteer my time.  I am looking forward to future board meetings and for the opportunity to be of service.

Have you ever served on a board of directors?

If yes, please share your experience.

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What Stage of Financial Change Are You In?

If you choose to pursue financial independence and an early retirement, you will need to reject many of the popular, preconceived mindsets and behaviors that you’ve been taught about your relationship with money.

Over the past two decades, the average age at retirement has been increasing. Studies predict the average age of retirement for Millennials may reach 75 due to the growing costs of rent and prevalence of student loan debt.

The good news?

You don’t need to follow the same financial path as your peers (no matter what generation you were born in).

The “bad” news?

To reach retirement earlier than your peers, you will need to handle your money in a different way as well.

Pursuing financial independence will require self-education, practice, and persistence. You may or may not have the support of your friends, co-workers, and even family members… but you will need to make financial changes in your own life regardless of their own money habits.

In this post, you’ll learn more about the five stages behind every major life change, how these stages apply to your personal finances, and how you can use this model to stay committed on your journey toward financial independence.

The 5 Stages of Financial Change

In the academic world, the stages of change are more formally recognized as the “transtheoretical model of behavior change.”

This model was first proposed by psychology professors in 1977. The model is often applied to health-related changes, such as quitting smoking, starting a new exercise or diet plan, and managing anxiety and depression.

Here are the five stages:

    1. Precontemplation (not ready to change)
    2. Contemplation (considering change)
    3. Preparation (getting ready for the change)
    4. Action (making the change)
    5. Maintenance (reinforcing the change)

While you typically progress sequentially through the first four stages, it’s possible to “backslide” and revert to an earlier stage if maintenance is unsuccessful (breaking your diet during the holidays, for example).

This model not only applies to physical behavior changes but can also be applied to belief changes or decision-making as well.

Let’s take at how you may journey throughout these stages as you make significant changes in your financial habits.

Precontemplation

During the precontemplation stage, an individual is not seriously considering making a change. In fact, they may not realize that a change is necessary at all.

In the context of a health-related issue, a person in the precontemplation stage may assume they are totally healthy – perhaps unaware that their high cholesterol or blood sugar may already have them on a trajectory for a heart attack or diabetes down the road.

If you have just started your professional career, you may find yourself in the precontemplation stage of your retirement planning.

Perhaps you are contributing a small percentage of your 401k toward retirement each month. What you may not realize is that contributing just 5% of your salary is going to place you squarely in the “retire at 75” club.

To move out of the precontemplation stage may require a “financial epiphany.” This could be saving up to buy a house, preparing to have a child, or earning a salary for the first time. At this point, you’ll realize it’s time to make peace with your financial past so you can reach your goals.

Contemplation

The same year that psychology professors created the “model of behavior change,” film director Woody Allen was attributed in the New York Times for his popular quote, “Showing up is 80 percent of life.”

Just by “showing up” to read this post, you may have already progressed out of precontemplation into the next stage of behavior change: contemplation (surprise!).

During the contemplation stage, an individual is aware of their problematic behavior but are still weighing the pros and cons of change: Can I make time to exercise without hurting my career? Will my friends support me in my decision to quit smoking or drinking?

In a stage of financial contemplation, an individual may be considering their financial goals and the associated trade-offs.

  • Should we be focused on saving up a down payment for a home or paying down student loans instead?
  • Is it worth the inconvenience of downsizing our home or moving in with roommates to save additional money?
  • Can we commit to meal prepping for a few hours each Sunday night to reduce spending on lunch during the work week?

Preparation

An individual in the preparation stage has determined the pros of change outweigh the cons. At this stage, they may start performing research, creating a plan, or making small steps toward their improved for behavior.

If you are someone who wants to lose weight, your preparation might be purchasing a healthy cookbook, grocery shopping for nutritious foods, or signing up for a gym membership.

Many times, it’s tempting to skip from the contemplation stage directly into action (which we’ll discuss below). It’s important to spend time in the preparation stage to lay a framework for success.

You may have to remove barriers from your financial goals as well. This could involve learning more about debt payoff strategies, calculating your net worth to understand your current situation, or building a solid budget that organizes your finances.

Action

In this stage, individuals begin to actively change their behavior. This decision is often one of the shortest stages of change – most of the effort is either exerted in (1) building motivation during the contemplation the stage, or (2) maintaining and reinforcing change.

If quitting smoking is your health-related behavioral change, then the action stage would be the first few weeks of cessation. The behavior change requires consistent, active effort to make. You may be using aggressive strategies like substituting a new behavior in its place, rewarding yourself for the proper behavior, and avoiding any scenarios that trigger the old behavior.

There are many ways to take action and improve your personal finances. You may start scheduling recurring payments on your debt, setting aside an additional portion of your income with direct deposit, or creating a budget to keep yourself living within your means.

Maintenance

In a successful behavioral change, the maintenance stage will have the longest duration. The goal of the maintenance stage is to reinforce the new behavior to minimize the chances of a relapse. With time, the new behavior will become second nature.

It is not uncommon for individuals to relapse back to a previous stage. A successful behavior change will depend on how an individual responds to this situation:

Do you prepare yourself to eat healthily by going grocery shopping and planning your upcoming meals – or do you tell yourself that you’ll try again next New Year’s?

Financial independence is a long-term objective that requires maintenance as well. You may have to dip into your emergency fund to cover an unexpected expense. You might splurge and make an impulse purchase that falls outside your budget.

It’s important to avoid letting one setback justify additional bad behavior. Even if you aren’t perfect with your money, you can find ways to improve your finances each and every day.

How can you maintain your positive personal finance habits to minimize the impact of a setback?

  • Continue learning new financial principles with personal finance blogs and books
  • Surround yourself with like-minded individuals who share your goals and values
  • Be publicly accountable for your goals by sharing them with family and friends
  • Automate your behaviors with recurring transfers, payments, and direct deposits

Conclusion

To do something spectacular with your personal finances, you will need to adopt different beliefs and behaviors about money that may be different than your peers.

You can make this financial change easier by understanding the how the “stages of change” model applies to you and your personal finances, assessing your current status in the model, and finding ways to reinforce the right behaviors until our reach your goal.

No matter how long you’ve been focused on your personal finances – whether you’re just contemplating your goals or maintaining your progress – there are strategies you can use to make good financial behavior easier.

How do you stay committed to maintaining the positive financial changes in your life? 

Author Bio:

Aaron is a lifelong entrepreneur and internet marketer who started Personal Finance for Beginners to share experiences and insights from his own financial journey as he pays down student loan debt, sticks to a deliberate budget, and saves and invests for the future. You can find him at Personal Finance for Beginners or on Twitter @PFforBeginners.

Know Your Competition

We start competing the moment we are born.  Competition is everywhere.  Completion is natural.  It is the cycle of life.  Eat or be eaten.  We must compete every day.  Only the strong survive.

When I was a boy, our dog had a litter of puppies.  They too were competing from their earliest days.  They would compete to get to the bottom of their basket to stay warm.  The puppies would compete with their brothers and sisters to get closer to mom to eat.  When I would watch and care for this litter, it did not take long to establish who the alpha of the litter was.  He always ate first and would not roll over when playing with the other pups.  How could such a young and tiny dog have established such will?

You might not see yourself as an alpha or even a competitive person.  If you are working on reaching financial independence, odds are you are more completive than you might think.  I would guess that you are very competitive.

Before I really gave it much thought, I never saw myself as a competitive person.  For the most part, I am a laid-back guy.  Growing up, I played baseball but was not very good.  The only football that I have ever enjoyed playing was when I played Madden.  The chess club or the debating team were also not for me.  I always saw myself as a Type B personality.

The first time that I realized how competitive I truly was when I read about capitalism.  I realized that I was competitive when I read that capitalism as an economic system where trade and industry are controlled by private owners who compete for profit.  I have been competing for a buck since I started earning a paycheck.

Even though I have only won a few trophies and awards in my life, I am hyper-competitive.  My whole adult life has been focused on competing.  I am not referring to being in competition with my neighbors.  What they have is not my concern.  The type of competition I am referring to is competition with myself and society to reach my goal.

I set a lofty goal.  My goal was to become financially independent.  For anyone to reach financial independence, there will be a great deal of competition.  On the road to that level of success, a person will have to face off against and defeat internal and external competing forces.

Postponing gratification is a form of competition.  The ability to save money is always at odds with the desire to spend money.  It is like there is an angel on one shoulder saying to save as much as possible.  On the other shoulder, there is the temptation to spend and waste money.  Temptation says if you want to be happy, buy that new car, house, or boat. You can afford it and you deserve it.

It is easy to give in to temptation.  Who wants to work hard and sacrifice to get ahead?  How can anyone sacrifice for decades to become financially independent?

Spending and having a good time is much easier than saving and investing for the future.  Internal competition is fierce.  At times, It is an internal fist fight.  It certainly felt that way for me.  As the saying goes, it is harder to conquer yourself than to conquer a city.  in order to conquer self, a person needs to develop emotional intelligence.

While it might be harder to conquer yourself, the external competition is also not exactly easy.  Most resources are limited.  Everyone is fighting to get ahead.

If you own a business, you are competing with other businesses and market forces to be successful.  Even if it is a side gig, there is still competition.  To survive, a business owner must provide the best products or services at the lowest price.

While it might appear that being an employee is easier than being an entrepreneur.  Being an employee is far from being easy.  An employee must compete to land a job.  There is competition to keep the position.  There is competition with peers to advance in the organization.  If your boss is a jerk, dealing with them brings on a level of competition.

The competition does not end after you earn the money.  There are competing forces who want to take your money.  Marketers are out to sell you stuff that you do not need.  They don’t care if you land in debt.  They are just competing to sell you something and to take your money.

You might have to compete at home to keep your money.  You might have your emotions under control, but your family has their own needs and desires that need to be considered.  It is not easy to keep a family on a budget.  It takes creativity to keep a family satisfied and not bored.

They might be the most difficult completion that you have to face.  You should not play a zero-sum game at home unless you want to have your family resent you.  It is wise to approach this level of competition with good faith and to negotiate.

Competition truly is all around us.  We face competition daily.  It does not mean that you are not competitive just because you were not the captain of the basketball team in high school.  For some people, it takes longer for their competitive drive to develop.

If you have decided that you want to be successful in this world, that thought alone requires a competitive nature.  If you are taking the required steps to get ahead in life, you are more competitive than you give yourself credit for.  If you are working on reaching financial independence by paying off debt, saving, sacrificing, and investing, you are extremely competitive.

Do you see yourself as being competitive?

Please share in the comment section below.

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An Abundance Mindset

An abundance mindset is the opposite of a scarcity mindset.  A scarcity mindset is one where a person is consumed by fear, desperation, and self-centeredness due to the obsession with not having enough resources to live and thrive.  An abundance mindset is a mindset where a person feels that there are enough resources and opportunities for everyone to succeed and live a fulfilling life.

There are many things in life that we do not have control over.  We do not get to pick our parents, how we were raised, or what resources were available to us as children including nurturing, food, medicine or education.  As adults, however, we do have the power to make the decision as to how we think and react towards every situation.

Our ability to think and how we view situations is a powerful tool.  It is critical to developing a healthy perspective if we want to be successful in life.  Just as negativity attracts negativity, positivity attracts positivity.

I am not referring to a Pollyanna mindset.  Nor am I referring to faking your positivity to the extent where it is transparent and the people around you just label you a phony.  I am referred to a hopeful mindset.  A mindset that will allow you to be happy, help people, and expand your horizons.  The best mindset to have to achieve all of those goals is to develop an abundance mindset.

Honesty

Honesty is a resource that we cannot have too much of.  Many people think of honesty as not telling lies or taking something that does not belong to them.  Yes, you should always be truthful and not steal.  In this context, I am referring to gut-level honesty.  This is the type of honesty that will allow you to be true to yourself and not fall victim to a scarcity mindset.

Do you have self-respect and value who you are as an individual?  Do you accept your current lot in life as a starting point for what’s next?  Do you have personal, professional, and financial goals that you are currently working on?  A person who can answer yes to those questions is highly likely to have an abundance mindset.

Fear

There is positive fear that tells you to look both ways before walking across a busy intersection.  There are also negative fears.  Scarcity is a negative fear.  Scarcity is negative because it consumes you and holds you back from taking the calculated risks that are needed to succeed.

A person who has an abundance mindset is sure to feel fear along the way.  To overcome that fear, they take hold of the steering wheel.  They do not let their emotions hold them back.  They pick up the ball and run with it.  They might fail.  They might fail more than once.  They might never succeed, but it will not be due to the lack of not trying because fear held them back.

Esteem

Many people in society have a scarcity mindset.  They live in fear to some extent.  They are afraid to take risks because they might lose their positions, money, or some other sense of security.

People who have an abundance mindset have high self-esteem.  They have to have healthy self-esteem because they are aware that they are different from other people.  Nobody generally likes feeling different from their fellows.   It does not, however, seem to bother these people who have an abundance mindset because they embrace their difference by moving forward towards their next success.  They do so while those with a scarcity mindset sit back and wallow in fear or envoy.

Comfort

Those who have an abundance mindset often appear cool.  They display grace under pressure.  They wear life like a loose fitting garment.  They are comfortable in their own skin.

There is a reason for their aura.  Don’t confuse it with being blasé.  They are in competition, but not with other people.   They generally see people more as conduits than threats. They are in competition, but it is based on winning by executing a plan.  They do not harbor negative feelings towards their competition.

If it is a competition between two people and they do not win, they humbly congratulate the victor.  They do not fall prey to resentment.   A person who has an abundance mindset is grateful for the challenge and for the opportunity. They feel that there are other opportunities for everybody to succeed and move on to the next challenge.  They have a growth mindset and will diligently prepare to do better when the next opportunity presents itself.

Big Picture

People who have an abundance mindset do not settle.  They think big.  They focus on the long-term.  That is why they are successful investors.  Where a person might cower at the thought of volatility, a person who has an abundance mindset does not fall victim to shortsightedness. They have above average emotional intelligence.  They know that change is constant and embrace it.  When others are selling low, they are looking to buy value.

Conclusion

It is rare to find people who have an abundance mindset.  Unlike unicorns, they do exist.  There might not be any in your inner-circle, but I can tell you where to find them.  They can be easily found online.  They gather on blogs and on forums.  There is a whole community of these folks who are working on achieving financial independence by embracing an abundance mindset as well as empowering others to do the same by sharing their stories.

These folks come from many different walks of life and can be found at different stages of the journey. Some are just starting out in their careers and working on eliminating debt.  Some are millionaires by mid-career.  Others are multi-millionaires and retired while they were still young enough to live out all of their dreams.  If you want to meet some of these folks, check out my Resources Page.  I hope you get to meet some of them and take advantage of what they freely have to offer you.

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The Scarcity Mindset

Even though you are doing your best to actively manage your finances, do you ever think that you might not have enough money to pay all of your bills, enjoy life, and save for a meaningful retirement?  Do you feel lonely, isolated, or even terminally unique?  Do you make financial decisions out of fear?  Does the thought of early retirement and drawing down your assets make you feel like panicking?  Do you project about the future and only see things getting worse?  If you do, you might have a Scarcity Mindset.

Living in Fear

If you have ever studied Economics, you learned that Economics is the study of limited resources.  The Scarcity Mindset is rooted in the fear of not having enough.  The scarcity mindset manifests itself in extreme self-centeredness.  It is based on an obsession with not having enough resources to meet both your needs and your wants.  No matter what course of action a person takes who has a Scarcity Mindset, the glass always appears to be half-empty.

Why do people have a Scarcity Mindset

People who have a Scarcity Mindset are focused on loss aversion.  Many people who have this mindset were once underprivileged or are currently struggling financially.  Everyone has limited cognitive space in their brain.  People who have the scarcity mindset have unmet needs.  These unmet needs cause the brain to focus on these deficits instead of focusing on the tasks that are at hand.  It is not based on a lack of intelligence, but a constant interruption in the flow of thoughts.

Short-term thinking

The Scarcity Mindset causes one to focus on the short-term.  It draws attention to the urgent.  A sell-off in the stock market would cause a person who has a Scarcity Mindset to panic and sell low because the recent loss will wipe out their finances.  They lack the foresight to see the correction as a short-term blip on the radar.  People who are stuck in this mindset also think that current situations will never change or improve.

Mentally Draining

The consistent mental obsession with not having enough rapidly drains the brains battery.  The focus on scarcity is mentally exhausting.  The brains finite mental resources are always in a state of debating trade-offs.  For example, it is exhausting to debate if you will have enough money to cover future expenses.  It is a mental debate that can occupy a person’s whole day.  The Scarcity Mindset truly is a form of suffering.  Other decisions become clouded because of this mental fatigue.  Because of this lack of mental energy, people are more prone to make poor decisions since their mental debates can lead to irrational solutions.

Symptoms

The symptoms tied to having a Scarcity Mindset are easy to identify in your life.  Hoarding things because of the fear of running out is a major symptom of the Scarcity Mindset.  Complaining about your general living situations is another symptom because there is a lack of satisfaction in your life.  Living in chaos as the result of people pleasing, addiction, lack of production, or self-deprivation.

Barrier to Wealth

Having a Scarcity Mindset is a barrier to building wealth.  If your mind is consistently producing a negative message, it is difficult to make positive financial strides in your life.  To succeed as an investor, you need to be able to think long-term and can handle some degree of short-term market risk and uncertainty.  If you panic based on daily volatility, it will not be good for your investment returns and only add to your mental anguish.

How to Change the Scarcity Mindset

The Scarcity Mindset is all in your head.  It is not easy to break away from this mindset.  It is possible, however, if you are willing to work on changing your thought process.

  • Write a list of everything in life you are grateful for. This list should include everything including food, housing, health, friends, family, and work.  If it is a source of gratitude, add it to the list.  Review this list at least once per day and more often if you are feeling negative.
  • Don’t compare how you feel too how others are living. Don’t compare yourself to others on any level.  Don’t try to keep up with neighbors, friends, or siblings. Live your own life.
  • Build your self-esteem through positive actions. Take a class. Volunteer to help people who are in worse financial or physical shape than you are. Take on extra responsibilities at work.
  • Focus on the present moment. Don’t project into the future where there is fear.  Don’t rewind to the past to feel resentments.  Keep your mind focused on what is currently in front of you.  Refocus as many times as you need to during the day.
  • Look at setbacks as a learning experience. Repeating the same mistakes, but expecting different results is a sign of insanity.  When you make an error, learn from it.  Try a different approach when faced with a similar situation.
  • Build closer friendships. If you want to gain a friend, becoming a better friend.  People are not going to come looking for you.  It is up to you extend your hand and keep reaching out to others.
  • Avoid negativity. Avoid the political and financial media.  There are great things happening in the world.  You just will not find information about those things in the media because they do not sell.  Check out this blog’s Resources Page for unlimited positive blogs, forums, and podcasts.
  • Reduce clutter and add order to your life. Embrace minimalism.  If you own things that you no longer use, give them away.  Whatever those things might be, they might be more useful to others.  Some examples are old books, clothes, sporting goods, or electronics.

Conclusion

Don’t beat yourself up if you feel you have a Scarcity Mindset or some of the symptoms.  The good news is that you can change this mindset.  It will take time and effort, but you can do it.  If none of the above suggestions are helping, seek professional help from a therapist.  After you break away from the Scarcity Mindset, you can start working on developing an Abundance mindset.  That is when life starts to become more of an adventure than an obsessive based existence.

Do you feel that you have a Scarcity Mindset?

What are some of the steps that you have taken to change how you think?

 

2017: Year in Review

2017 is in the books.  2017 was a year to remember.  It was full of surprises.  You never know what is around the corner.  At the start of 2017, creating a blog was not on my list of things to do.  The Financial Journeyman blog is now almost 9 months old.  That is just the result of being present and taking advantage of what life has to offer.  I have even greater expectations for 2018.  Below are some of the major highlights from the past 12 months:

Career

2017 started off on a high note.  My boss called me the first week of January and told me that I was getting a promotion. With the promotion came an 11% raise and a $1,000 bonus for a project that I completed in the fall of 2016.  I was excited and did not know that this promotion was coming.

The only major change the occurred was that I now had one employee to manage.  I did not see it as a challenge.  My new employee Jill is a super smart and motivated Millennial who has overcome some major hurdles in her life.

Over the past 12-months, it has been a pleasure to help my assistant develop.  Jill is on the right path.  She is contributing to her 403B account, just completed a Graduate Leadership Training course at Binghamton University, and is consistently asking me to be a part of projects that I am working on.  It is my goal to help her transition into a management role in the future.

Meeting the Bogleheads

In February, I attended my first local chapter meeting of the Bogleheads in Philadelphia, Pa.  I have read the Boglehead’s two books and browsed the forum for many years.  To break-up the boredom of winter, I decided to attend a local chapter meeting.

It was great to meet and spend time with this group of people who are working to reach financial independence by following the teachings of Jack Bogle.  If you are interested in passive investing and using low-cost index funds, I suggest you visit Bogleheads.org and check out a local chapter meeting.  I am looking forward to attending the February meeting in Philadelphia.

The Financial Journeyman

On April 8th, The Financial Journeyman was created.  It has been quite an experience.  As a result of creating this blog, I have been able to interact with so many great people.  I am meeting new people every week.  The purpose of this blog was to share my journey toward financial independence with the world and to try to help others who are on a similar journey.  This blog has become so much more than I expected.  I look forward to what the new year has in store for this blog.

Reaching $1,000,000 Net Worth

I was not sure if I was going to share this milestone.  After much thought, I have decided to share it because my blog is anonymous.  The purpose of sharing this milestone was to inspire others what is possible if you live below your means, limit debt, save as much as you can, and invest your money wisely.  It felt great to reach a $1,000,000 net worth at age 40.  I am grateful to have this financial foundation as my wife and I continue to work on our ultimate goal of early retirement.

10th Wedding Anniversary

In August, my wife and I celebrated 10 years of marriage.  It is crazy that 10 years went by so fast.  It has been a productive decade.  It has been the best decade of my life.  I feel blessed to have Lori as my wife.  She is my best friend.  There will always be ups and downs in life.  While I have experienced more ups, it is great to share all of it with my wife.  I truly believe the best is yet to come.

London & Paris

To celebrate our 10th wedding anniversary, we traveled to Europe for a week-long vacation.  It was our first trip to Europe. We had an amazing time visiting both London and Paris.  We got lucky with the most favorable exchange rates between the Dollar to Pound in recent history.  If you like to explore new cities and enjoy history, take a trip to London.  You will not regret it.  Just be prepared to spend some money because it is expensive.

Rockstar Finance

I have been a fan of J. Money for a few years.  When I created my blog, I had the goal of writing a post that would be good enough to be featured on Rockstarfinance.com.  It took me about 10 weeks to write and edit How the Mob Influenced My Asset Allocation.  It felt great to see my post shared there.  I now feel like a legitimate personal finance blogger.  I am proud of the “As Featured on Rock Star Finance” tag on my blog.

If that was not exciting enough, I had a second post Keep Your Hands Off My 401K featured as well.  My audience has grown tremendously as a result of the exposure that I received from Rockstar Finance.  The personal finance bloggers who hang out on the Rockstar Finance Forum are a great group of people who work to help everybody in the personal finance space succeed.

ESI Money

ESIMoney.com is one of my favorite personal finance blogs.  Some people build wealth by way of entrepreneurship and others do it by working for someone else.  ESI Money is focused on building wealth by climbing the corporate ladder.  That has been the approach that I have followed up to this point in my career.  Along with providing comprehensive investment advice, ESI Money has a cool motivational series that features interviews with millionaires.  I was featured as M25 in this series.  The interview received a great response.  In case you have not heard, John from ESI Money now owns Rockstar Finance.

New York Personal Finance Meet Up

I was not able to attend FinCon 2017.  I did, however, attend the next best event for personal finance bloggers.  That event was the New York Personal Finance meet Up.  The New York Personal Finance Meet Up was an informal meeting of more than 20 personal finance bloggers and internet entrepreneurs.  It was great to meet and chat with some of the financial independence bloggers who I often read.  It was also an opportunity to meet new people who are working, saving, and investing with the goal of reaching financial independence.

Keep Thrifty

The last highlight of the year was to be interviewed on Keep Thrifty.  Keepthrifty.com was one of the first personal finance blogs that I started to read after I created The Financial Journeyman.  Chris and Jaime write excellent content about paying down debt, saving, taking a mini-retirement, and raising a family.  It was a pleasure to work with Jaime to write and edit this interview.  She did a good job of getting me to share more about myself than I have in any previous post.  Please check out the interview if you would like to learn more about the beginning of my journey to financial independence.

Conclusion

2017 was a great year.  There were many pleasant surprises.  While I had high hopes for a productive year, I did not expect it to be as good as it ended up.  Moving forward, I am simply planning on continuing to do what has worked in the past and keep my eyes open for new opportunities.  My goals for the upcoming year are:

  • Continue to save at least 50% of our total gross income
  • Become proficient in Travel Hacking (Travel to Ireland for free)
  • Publish 5 blog posts per month
  • Continue to grow blog traffic
  • Attend FinCon 2018

Please keep an eye out for the fourth quarter blog performance metrics from The Financial Journeyman in early January 2018.

WARNING: The Holiday Party Can Kill Your Career

It is that time of year again.  The Holidays are upon us.  With the holidays, comes holiday office parties.  Companies like to have these events to celebrate this festive season with its employees.  These events are to be enjoyed, but you also should be on your best behavior.  I have witnessed holiday parties kill many careers.  The purpose of this post is to coach you on how to prepare for these seemingly harmless events and to avoid career-ending landmines.

An Interview

Treat your company holiday party like it is a job interview for a promotion and not a wedding.  It does not matter if you are a new employee or have been with the company for many years.  People are watching you.  HR is documenting poor behavior.

Do not treat this event like it is an evening out with your friends.  It is not happy hour.  It is a work event.  It is no different than your monthly staff meeting.

Prior to attending, find out who is going to be at the event.  Prepare in advance who you want to chat with.  It is the perfect opportunity to get on the radar of senior leadership.  Don’t mess it up.

Alcohol

Many holiday parties serve alcohol.  Do yourself a favor and do not drink.  If you must drink, limit yourself to one cocktail.  Even if there is an open bar, use caution.  This is not the place to demonstrate your tolerance for alcohol.  Even if your co-workers or boss is drinking, focus on yourself.

My suggestion is to Abstain from drinking for the evening.  This is about your career and future with the organization.  Alcohol is a social lubricant and you do not want to get too comfortable and look foolish in any way.  Your reputation is on the line.

The holiday party is only a few hours long.  You can manage to not drink that evening.  When the event is over, you are free to go to the bar with your friends and relax.

Dancing

If there is dancing, participate if you like.  It is fine to slow dance with your guest.  It is also acceptable to have fun.  Just do not overdo it.  It is not wise to show off your dancing abilities and to draw attention to yourself.  If the option is between dancing or not dancing, it is better to be a wallflower and not be noticed.

I once worked with a woman who was on the fast-track to becoming an Office Director and supervise 120 employees.  She was smart and talented.  Clients and employees liked her.  Her advancement track ended when she showed up at the holiday party wearing an inappropriate outfit, drank too much, and made the CEO’s wife dance with her.

Corporate employees were there from many different states.  Many took photos and videos of her dancing.  She was acting like nobody was watching.  Unfortunately for her, everyone was watching.  As unflattering as it sounds, she was given the nickname “The Dancing Bear”.  Her advancement up the corporate ladder ended.  She was passed over twice for two promotions.  Her career advancement stalled and she left the organization.

Your Guest

If you bring a guest, be sure that they are on their best behavior.  Warn them that this is your career and that they are not allowed to drink alcohol.  If they do not agree, it is better to not bring them.  Their behavior is a reflection of you and your decision-making skills.

At my previous employer, my Director, and her husband showed up late and intoxicated to the corporate holiday party.  While we were in the serving line at the buffet, her husband was loud, using vulgar language, and criticizing the quality of food.  My Director was unaware, but the owner of the company was four positions behind them in the serving line.  That following Monday, she was called by the Regional Director and was severely reprimanded.  She was later punished by being transferred to a poor performing region with the goal of making that office profitable.  She was unable to do so, was put on performance review, and ultimately separated from the company.

Sexual Harassment

This is a serious issue.  Even if your holiday party is held at a hotel or convention hall, the same work rules apply.  If you are in a management position, be aware of the sexual harassment employment laws.   Study what constitutes quid pro quo and hostile workforce sexual harassment.  Do not touch your co-works or make any comments that might be offensive.  Think before you say or do anything.  This also applies to people who are not in management positions.  There is zero tolerance for this type of lewd behavior in the modern workplace.

Conclusion

At my current employer, we have decided to do away with the traditional holiday party that was normally held on a Saturday evening in early December.  We now have a 2-hour party at the Corporate Office on the Friday before Christmas.  The event is catered, but we do not serve alcohol anymore.  Some people complain, but it is better this way.

I strongly suggest that you attend the holiday party.  It is a good move for your career.  If you are not there, it will be noticed.

If you do attend, make the most of the event.  Enjoy the dinner.  Be cordial, work the room, and mingle with everyone.  Use it as an opportunity to show off that you have class.  It is the perfect event to display that you are a good representative of the organization.

Have you ever witnessed someone ruin their career at an office event?

If you have, please share your experience in the comment section.

Become a Nurse

 

If you want a meaningful career that pays well and offers stability, consider becoming a nurse.  No matter if you are a traditional student or an adult learner who is planning on going back to college, becoming a nurse is an excellent career to consider.  Nursing is a growing field.  One great benefit of this field is that it allows you to earn while you learn.

Licensed Practical Nurse (LPN)

To become a Licensed Practical Nurse (LPN), most programs are only 18 months long.  These degrees can be obtained at a vocational school or community college.  In most states, after a nursing student finishes the Intro to Nursing or Nursing 101 class, they can sit for their states Certified Nursing Assistant (CNA) License.  This allows a nursing student to work as a CNA while they are still in nursing school.  Working as CNA will allow you to earn a wage that is higher than what other unskilled jobs pay.  It also allows you to gain experience and develop your bedside manner as a caregiver.

Once you become an LPN, there are many job opportunities.  Many hospitals don’t hire LPNs anymore. Never the less, there are many job opportunities in home health care, long-term care, school districts, and in primary care offices.  The average wage for an LPN is more than $22 per hour.

REGISTERED NURSE (RN)

While you are working as an LPN, it is a smart career move to become a Registered Nurse.  To become an RN, only an Associate’s Degree is required.  This degree can be earned at most community or Junior Colleges. Becoming an RN will give you the opportunity to work in a hospital.  There are a vast amount of different nursing positions including ICU, Med-Surge, ER, and Pediatrics.  The average wage for an RN is almost $32 per hour.

BACHELORS OF SKILLED NURSING (BSN)

If you are interested in a Bachelors Degree in Nursing (BSN), most hospitals will provide tuition reimbursement or assistance towards the degree.  Earning a BSN allows a nurse to advance into a specialist or management position.  With a BSN, a nurse can work as a Facility Educator, Case Manager, or become an Administrator. The average salary for those positions range from $72K to well over $100K.

MASTERS OF SKILLED NURSING (MSN)

There are also advanced degrees in nursing.  A nurse can go to graduate school for a Masters in Skilled Nursing (MSN) or even a Ph.D. program.  An advanced degree gives a nurse the credentials to teach at a university.  An advanced degree is also required to become a Nurse Anesthetist or a Nurse Practitioner.  Both of those positions have an average annual salary of over $104K.

CAREER OPTIONS

Another benefit of becoming a nurse is the stability and variety of career options that it offers.  Due to the aging Baby Boomer population, the demand for nurses is more than almost any other profession.  The demand is projected to grow by 16% annually up to 2024.  Also, if you are not interested in working in a hospital setting, you can work for a law office auditing files, the government conducting surveys of facilities, in healthcare marketing, or in the insurance industry.

It does, however, take a special person to become a nurse.  A person must have compassion for others. There is little room for error, so one must provide excellent care.  Also, you must be reliable because patients are counting on you.  If you feel that you meet those qualifications, consider becoming a nurse.  It is rewarding on many levels.