FIRE

How’s Your Mindset?

HAY GUYS – how are you? Ready for another post? Of course you are!

Before I get in stuck in have to say I received plenty of public and private messages for the last post about FIRE. Looks like it’s a topic which strikes a chord with many people.

Hats off to Banesan for pointing out that in order to retire early you can just move to a developing country, in fact it’s what a lot of people who have achieved FIRE do. The USD or AUD goes a long way in those places.

Ooo also before I forget, I’ll sneak in a big thank you for everyone who’s read and supported me in this blog so far – you guys are awesome!

Now, someone asked me why I put mindset as number one in terms of my list to achieve my financial goals:

      1. Mindset
      2. Research
      3. Action
      4. Review
      5. Repeat
    growth-mindset-review
    The stairs were too crowded so I took the lift.

    Quite simply mindset is something we all have. We make thousands of decisions every day – big, small, tiny and irrelevant. It’s how we approach these decisions which determine the outcome of our lives.

    When you are a baby your mindset is ironclad, you just do what you wanted when you wanted.

    Need to do a number two in public? I’m going to do it – hope you have a nappy waiting. Can’t get what I want? Fuck that, here let me scream until I get it.

    When you are a bit older, you can still get away with a lot of things – say the wrong thing in public? Excuse me, I’m only a kid.

    Then as we become older still, we start to form opinions and learn what is “right” and what is “wrong”, which behaviour is “good” and which is “bad”. It’s all about growing up and integrating with society.

    As we become functioning adults our mindset is more or less formed.

    “No I can’t eat cheese, it tastes amazing but makes me flatulent, so no thanks”.

    We don’t need to be told what is right and what is wrong, we just know.

    Cheese 1
    Weapons of Mass Destruction.

    Part of this mindset is our attitude towards investing, finances and money. We learn this early on through experiences and memories.

    Some favour investing in property, some favour investing in shares, some favour investing in both, some none, some just don’t invest – whatever, it’s all to do with our experiences and what we were told growing up.

    Myself personally, my mindset towards investing has changed significantly.

    Growing up as a kid we never really had any spare cash.

    That’s why to this day I still insist on switching off the powerpoints when we leave the house, or switch off the lights when I leave the room – drives MrsFrugalSamurai-to-be crazy.

    Cropped-Switching-off-lights
    That’s right freaky Lizard Humanoid… my what sharp teeth you have… maybe keep the lights on instead eh…

    Growing up in this environment you harvest a scarcity mentality – you are always counting your pennies and pinching your wallet.

    This means that you don’t invest any of your money. You save it instead. You look at potential investment opportunities through all the negatives, what can go wrong, what may go wrong, what will go wrong.

    Soon enough you develop this attitude towards other areas of life.

    A scarcity mentality also means the decisions you make are selfish ones.

    “I won’t help you because helping you might mean you achieve greater things than me, then there’d be less glory for me to win, less food for me to eat, less women for me to mate with, oh badear – woe is me should I help you!”

    It also means you make decisions with a finite outlook.

    “Look, I only have so much wood left, I can’t make a fire – a fire would use wood, what’s that? We can all be warm then? Fuck that! I’d rather keep the wood!”

    dscn0056
    My wood brings all the ladies to the yard.

    But as I went through university and started working, I was fortunate enough to meet and befriend people who engaged in the opposite way of thinking – the abundant mindset.

    You are the average of the 5 people closest to you as the saying goes and I’m glad that they were.

    These people showed me the way through sharing their knowledge. They understood that what makes them better individuals was not to judge and critique and shun others who asked for help but to help with whatever they wanted.

    They realised that to be a taker you have to be a giver first.

    “I’ll use my wood to light this fire for us, so we can be well rested and warm. Tomorrow we will go out and conquer the world. We shall take what is ours TheFrugalSamurai”

    And you know what, the original negativity and can’t do attitude was slowly replaced with a sense of can-do.

    That was the first step on my financial journey, learning to change my mindset.

    inception_keyart
    This movie is about a guy who didn’t want to share his wood but then ended up sharing his wood.

    Despite changing my mindset, I still made some rash and foolish decisions because I didn’t pay attention to number 2 on that list – research.

    Stay tuned for the post on that one!

    P.S. Proud the Australian soccer team are heading to the FIFA World Cup next year – go Socceroos!

    What do you think? Did you enjoy this post? Please help me out if you enjoyed this and click on the little “follow” button at the bottom right and be a follower! Thank you greatly!

3 Comments

  • Innocent Bystander

    Top of the morning to you FS!

    Now when it comes to the sharing knowledge, I think there is still a certain level of bias involved even when it comes to sharing knowledge. For example, a room full of people, they all have varying degree of investment portfolio but the bottom line is they all want to make money so fundamentally they are all like minded people. Some may be heavily invested in “X” whilst others are betting on “X” to crash – this could be a result of individual’s research, experience or pure bias. Two schools of thoughts, some are gonna be right and unfortunately some are gonna be wrong. So in order to be a “giver”, you probably need to find the right audience as well [insert a picture of a guy playing the piano to a yoke of oxen].

    Back to abundant vs. scarcity debate – for most parts abundant mindset wins hands down (no one wants to be told such and such is impossible to achieve). However, it’s also prone to some false visualisation and expectation (biting off more than you can chew) so it is really important to avoid those boobie traps along the way.

    • The Frugal Samurai

      Of course a balanced approach works best, however what you find is you have a certain bias towards one side versus the other (abundance v scarcity), just hope people realise that like you rightly pointed out, an abundance mindset works best for the most part.

Let me know what you think!

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