It would seem that employing an investment mentality – one that leads to only wise and prudent decision making – would be commonplace. But, the opposite can sometimes be true. Indeed, here are 5 key toxic investment mentalities to know and avoid at all costs:
The nomadic mentality reflects a kind of vagabond spirit that controls people. Just as nomads do not have a fixed location, people with a nomadic mentality move from job to job, place to place, business to business and investment to investment without focus or consistency. They lack the staying power and resolve to realize term-based results. Nomadic investors pilfer monetary resources from one vehicle to quickly move on to the next.
To always consume without producing is a grave investment error. Many people spend their entire lives consuming everything they can without any investment provisions or savings to secure their financial future. The result of such unrestrained spending is often shame, family strife, financial hardship and even poverty. All too often, those that consume more than they produce find themselves at the bottom rung of the economic ladder.
Victim or Entitlement Mentality
This is the mindset of always feeling victimized, marginalized or that someone owes you something. Giving excuses and shifting blame for losses are trademarks of this investment attitude. Ultimately, no one can make us fail without our permission, so whatever we allow or permit to happen is the result an investor must take ownership of – and learn a lesson from. Those with this mentality often find themselves languishing in the same place without making real progress relative to asset proliferation.
Civil Service, Salary, or Wage Mentality
Many don’t realize their full investment potential because they live their entire life expecting their employer benefits, the government, or their salary to make them rich and wealthy. None of these are a source of wealth—they are merely a resource. It is important to move from a salary mentality to an income mentality. Salary, as a result of labor, is fixed and set by someone else. Income, however, can vary over time, is not determined by anyone else, and can come to you even when you do not “work” for it. Income can reflect your true worth, value and abilities. With a salary, you work for the money. With income, the money works for you.
Prosperity or Materials Mentality
While there is nothing inherently wrong with prosperity, sometimes this investment goal is nothing more than materialism and ego-driven self-centeredness. If your only reason for wanting to be rich and wealthy is so that you can acquire material possessions and establish comfort for yourself alone, then your mindset is fallible. Successful investors must move from prosperity-mindedness to posterity-mindedness such that your wealth will not only positively affect you and your family’s generation, but also serve as a legacy and support for future generations.
In order to develop an effectual investment mentality that best helps you achieve financial goals and become truly wealthy, it’s important to self-assess and recognize if you have any of these adverse mindsets. If so, “detoxify” and make a concerted effort to shift mental gears to establish a more productive perspective on wealth building. Only then will you have the right frame of mind to acquire real wealth and value in your life, and the lives of those around you.