Have YOU BEEN Programmed to Fail?

The beliefs you hold and the preconditioning you have been exposed to may be stopping you from becoming a successful investor.

When my wife and I started our investment journey one extremely valuable exercise we did was to understand our investing mindset and explore what preconditioning we had been exposed to that might limit our willingness to invest. It became clear that the beliefs we hold and the way we make decisions was sabotaging us from becoming a successful investor.

For example, does the following sound familiar?

As a child I often heard my parents say, "they must be doing well as they've got another new car". Also, "you must do well at school so you can get a good job and have a good life". I was given pocket money for doing chores and I was encouraged to save my money for the things I wanted. Then, at school I was trained for a career as an employee. I was taught maths and some accounting, but not how to invest. When I left school and got a good job, money started coming in, so I started spending it. Nicer cars were often purchased, money was spent on various "hobbies" - I just had to have the latest gadgets and “toys”. Of course, I borrowed heavily to purchase our first home and then stayed heavily mortgaged to upgrade to better houses. Over time my tastes and wants became more and more expensive, plus I just had to “keep up with the Joneses”. I had become a great employee and the perfect consumer.

Your mindset suffers from preconditioning

Why wasn't I taught the principles of investing at school? Why was my career choice directed at being an employee rather than an employer? Why have I fallen for all of the marketing hype and spent my hard earned money on the latest “this and that”?

I realised that the environment you were raised in as a child, including the education system, the views of your parents, friends, family, work colleagues and peers, influences the way we perceive money, spending, saving and investing. To become a successful investor I needed to explore these influences, understand my current beliefs and set out to instill new beliefs, creating an investing mindset to drive me along the path to succeed.

What beliefs and preconceived ideas do you have? Please take some time to explore and challenge your current thinking and determine the changes you need to make going forward to develop an investing mindset. How much importance do you place on material things? Why is it so important to have the latest gadget or car? How would your life be impacted if you didn't have these things? Is it time to make some changes?

Here's an example to challenge your thinking:

Investing Mindset Idea: "Your Finances are a Business"

Here’s an idea: Run your personal and family finances as a business! Your personal business will have goals and a mission statement. Your business will have a plan with clear objectives and time-frames. As a business owner and director you will set the values and culture of your business that will guide your business decisions. All of the same qualities of a successful investor and wealth builder!

Constraining expenditure and reducing liabilities are key to business success. They are also key to your personal finance success. Similarly, maximising profits, minimising capital erosion and careful investment in assets drives business growth , which works for your personal finances too and will allow you to build wealth. Adopting a business mindset for your personal and family finances really helps you focus on achieving your goals.

Food for thought?

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