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Learn how to adopt a wealth mindset to accelerate your journey to financial independence. I am convinced that nearly everybody has the capability of achieving financial independence and early retirement (FIRE). Many people have doubted this; after all, who can afford to save up 100,000s of pounds.
But anyone can join the fast track to financial independence and learn how to adopt a wealth mindset. This is directly applicable to everyone, no matter where you are in your life, as long as you are not severely disabled or nearing retiring age.
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What is financial independence and early retirement (FIRE)?
Being financially independent means you make enough passive income that you never need to work for another second in your life. You can thus retire in your 30s or 40s and spend your time doing what you like. You do not need a million to achieve FIRE but you will likely need to save up money for a while.
Read more about FIRE.
What is a wealth mindset?
A wealth mindset is the separator between the rich and the poor. People with a wealth mindset know how to use their money efficiently and make the most of it, irrespective of their starting point in life.
How to adopt a wealth mindset for financial independence
1. Change your thought process
If you are staring at the screen right now thinking you cannot achieve FIRE, you are right. You need to change your thought process first by adopting the mindset you need to achieve FIRE.
Instead of “it is impossible” try thinking “it may be possible”. Instead of “I cannot do this” think “I can try doing this”. If you start with this mentality, then over time the “maybe” and “try” will turn into “definitely“ and “will do” on their own.
The first secret of how to adopt a wealth mindset is to challenge your current attitude.
2. Get informed about personal finance
Reading and becoming immersed in the topic is an important step when learning how to adopt a wealth mindset. When you do this, you will realise that there are plenty of ways to increase your income and reduce your spending.
Often, information is available for free through blogs or books from the library. I have created a list of nine financial independence books that will change your life. In addition, I highly recommend reading Tim Hale’s Smarter Investing: Simpler Decisions for Better Results.
3. Surround yourself with the wealth mindset
Learn from others how to adopt a wealth mindset
A powerful method is to surround yourself with the right people. Even if you are not as wealthy or successful as them, just by spending time with them, you will naturally adopt a wealth mindset. This includes listening to their podcasts or reading their posts, in case you do not have rich friends lined up.
This approach is really effective because by nature, humans want to fit in. Back in the old days, being excluded from a social group meant death. A single human could not defend himself against bears, wolves, lions or whatever else was roaming around. Hence, humans quickly adapted not to stand out within their social group, as to not increase the risk of exclusion.
4. Write about your JOURNEY to adopt a wealth mindset
Taking this whole “surrounding yourself” thing one step further, blogging about money, financial independence or how to adopt a wealth mindset is a great idea for two (and possibly more) reasons:
People are interested in your perspective
There already are a ton of blogs out there, but it is the perspective that matters. Documenting your journey will be the inspiration somebody else needs to start.
Blogging is a powerful motivator
Having a proven record of your achievements will help you stay motivated through your journey. You have an accountability partner in your readership and a reason to keep going if you feel down.
Blogging also has numerous other advantages, such as earning a passive income each month and developing your communication skills. Learn how to set up your own blog in under 15 minutes.
5. Leave your comfort zone to adopt a wealth mindset
I always imagine my comfort zone as my bed. It is nice and warm and nobody will bother you. If someone does, you can kick them out of your bedroom. Leaving my comfort zone, on the other hand, feels like venturing through the Arctic. It is cold and who knows whether there are food and shelter.
Master life outside your comfort zone
If you try hard enough, even the Arctic can become your new comfort zone. Perhaps you befriend the locals, build yourself a little hut and learn how to hunt. Looking back at your bedroom, would it not feel cramped and limited compared to the wide Arctic?
Leaving your comfort zone will enable you to see your past limitations, your weaknesses but also your strength more objectively. You will gain confidence from having achieved something that felt unachievable before.
Beat your fears to build a wealth mindset
What is holding you back? Fear. You fear to take the risk because there is no 100% success rate. This, again, is a natural reaction shaped by evolution. Even if your living situation is suboptimal, you are likely to just accept it and over time it becomes the new normal. You may not even notice that your life could be so much better. And if you do, you feel the risk is not worth trying to change your situation.
This is because your most important needs, food, and shelter, are secure, so your brain is not alarmed. In the distant past, this behaviour was advantageous as you were more likely to survive this way.
Realise that your life is not in danger
Let us face it: when was the last time you had to make a decision on which your survival depended? For most people, including me, the answer will be “never”. Changing our lives nowadays is much less risky, but our brains still live in the past. People often talk about “rewiring your brain” and this is what you should do.
How to adopt a wealth mindset for financial independence summary
If you are looking to adopt a wealth mindset, you can start by taking the following steps:
- Change your thought process
- Get informed about financial independence
- Surround yourself with the wealth mindset
- Write about your journey to adopt a wealth mindset
- Leave your comfort zone
Learning how to adopt a wealth mindset is a journey and getting there may take some time. Especially in the beginning, it is easy to fall back into old habits so you need to constantly remind yourself of your goal.
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Jennifer
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We are really focusing on our finances at the moment and have been organising pensions, savings for the kids and ensuring any debt is paid off by my birthday in August. Posts like these have definitely helped us and this is an area I would really love to learn more about.
I’m not very good at taking risks with money. My husband is, but some haven’t worked out so I’m especially wary now. It’s always so tricky to know what is best.
A good idea would be to put a small amount, say £100 into an index tracker and observe how it changes. I am very risk averse with money too but after observing continuous growth in my index fund, I feel confident investing more into it
We have a real focus on our finance at the moment so this post was especially helpful. I find having a plan and a goal really important.
I love this post, very informative, I definitely have to start by changing my mindset about money as it is something simple but very important.
Leaving my comfort zone is a struggle but something I really need to try to do myself. Fingers crossed I can work on this better in 2020 🙂
This really makes me what to read more about how I can become more financially aware and proactive. At the moment, I tend to go month to month not really planning for the future.
This has come at a right time . Definitely needed. Have sat down this morning and cleared my head and now have a great plan for the finances this year
I’ve recently started focusing more on my personal finances and i’t’s been a real eye opener. Expanding my knowledge has really helped me to understand more.
I am trying to push myself more into this mindset as I really want us to be financially independent in our lives x
A very interesting read, but as I currently have 7 children to support, the chances of me saving and being able to take risks is quite difficult, plus I have seen first hand from my in laws what happens when you take a risk and it doesn’t pay off, although they still have lots of wealth, they also lost a great deal!
I really could do with getting into this mindset. I’m reading a lot more about financial independence recently so hope this can help me.
This si a very interesting read, my husband and I are both risk adverse, which does’t really lend itself well to investment and making good money sadly. Mich x
I was the same at the start. The key moment was when I invested £500 into an index tracker. I kept watching it thinking that sooner or later the money would be lost but to my amazement, not much happened. It just slowly grew. That’s when I also grew more confident