Fixed Mindset Vs Growth Mindset

Fixed mindset vs Growth mindset, why your mindset matters when you are building an investment portfolio.

Hey, have you ever met a real plonker, and then been surprised that they are really wealthy? Many people think that intelligence is the key to growing wealth. Sure some extremely clever people have made millions or billions of dollars. But the reality is mindset has a lot more to do with wealth building than intelligence.

"Mindset" is defined as "the established set of attitudes held by someone." The mindset of an individual will determine their success in all avenues of life. A positive, open mindset that promotes learning and evolving will give you a higher chance of success. A negative, close-minded mindset that refuses to allow change can dwindle your chances of success. It is all about your attitude.

Property investment follows tried and true rules. You would have heard them -location, location, location, you make your money when you buy, not when you sell, rule of 72 etc. There are truths that many people bank on, but there are also unknowns and risks. The interests may go up, the market may go down, tax rules may change.

People who have a fixed mindset look at their unknowns or variables and decide that they know what's best and do not take the opportunity to invest.

People with a growth mindset will seek answers from experts to understand these variables and what they can do to take advantage of them.

Let's have a quick look at the difference of thinking

Fixed = Intelligence you have or don't have.

The world is constant and doesn’t change much
(you decided who you were as a teenager, and haven’t really evolved beyond that).

With a Fixed Mindset we tend to:

  • Avoid taking on new challenges
    “ I don’t have the time or the money”
  • Quit or give up easily
    “I want to learn how to invest in property, i read a few books, but they took up too much time"
  • Be highly self-critical
    “ I am not good with money”
  • Disregard feedback or criticism
    “ Yeah, well I have always done it this way, it works for me”
  • Resenting the success of others
    “ Jon is such a dingus, why does he get to buy a new BMW?"
  • Makeup stories why they were lucky instead of seeing them successful
    “ Things always work out for Janice, it seems like she can’t do anything wrong, he life is so easy”
  • Criticize and judge others
    “ Jon, is such a try-hard, he is always working out and eating the right food, why couldn’t he just relax and chill like the rest of us?” 
  • Argue for our limitations.
    “ Oh, someone like me doesn’t have investment property”

These little stories we tell ourselves keep us in our place. We need to remember it is our ego protecting us. Maybe the version of ourselves worked or at least was perceived as working, so our ego says - “right, let's stay here. Let’s lock our mindset into this position”. And for a while it does work, but everything in the universe expands and so our world starts to expand, and if our mindset is locked, it becomes tired and stressed trying to hold back. You will have come across people who have a fixed mindset, the older they get the more resentful and bitter they sound when they describe the world.

People with growth mindsets are not perfect, but they do see the world more open and filled with more opportunities.

Growth mindset = intelligence is something you can develop

With a Growth mindset we tend to:

  • Embrace any challenge
    “ I have seen other people in similar situations do well through investment property, I will have to get out of my comfort zone and learn something new if I want to”
  • Never give up
    “I had to go through a few hours of paperwork, and making sure my finances were tidy, it was boring to do the work, but now I am saving $400 a week on my mortgage”
  • Practice self-compassion
    “I got a little bit scared, worried that I wasn’t good enough to do this, but I trusted myself, knew I am not perfect and found experts to help me, ”
  • See effort as a journey
    “Wow, I have really learned about myself when challenged, who knew I could push through like that”
  • Learn from criticism or feedback
    “Wow, Jon, I will try it your way, I might make things easier on myself, thanks for the feedback, you don’t know what you don’t know”
  • Be inspired by others' success
    “Oh, look Jon bought a third investment property, he must be chuffed to be building wealth like that. He is a bit of a plonker if he can do it, so can I, we earn about the same  money”
  • Understand why people are successful, not lucky.
    “Janice always gets what she wants, wonder how she makes her dreams come true?, I am going to see if she will explain to me her winning formula”
  • Help and nurture others
    “Oh I love that you have started saving for your first home, let me know if I can introduce you to my clever team that help me. Good on you!”
  • Believe in possibilities.
    “I never know what is around the corner, but I know something good will come my way”
A growth mindset isn’t as protective. Your ego is not as controlling.  There is a willingness to understand more. You allow yourself to be vulnerable and ask for help. People in a growth mindset can do things better, faster and are willing to learn.

When it comes to building wealth, a growth mindset doesn’t see barriers, it sees opportunities and you will find the right people to help answer questions, and put together sensible plans. People with a growth mindset are not afraid if plans change as they have the tools to adapt and see the change as a way to improve their skill set.

When we talk to clients, we know the people who are not going ahead with wealth building, because they already ‘know it all’ or they don't see themselves living a life larger than the one they have created. It is sad to see them trap themselves through their own limiting beliefs, but we are realistic and know we can’t help everyone. We also can tell the people who will flourish, as they are curious and excited about the world and are not afraid to learn.

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