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What’s your mindset? Abundance vs. Scarcity Thinking

July 11, 2018   |   Financial Life Planning

Life is a collection of millions of choices that we make daily. While these choices vary in magnitude, they can often be traced back to a source. One source that plays a significant role in the choices that we make is our mindset. A mindset has many different facets, but one of the main components is whether you have an abundance or a scarcity mentality.

The Abundance Mindset

An abundance mindset envisions endless possibilities and sets lofty goals. It’s one that believes the best is yet to come, and that ideas, resources, and love are unlimited. It creates a zeal and passion for life that is contagious. It’s also a mindset that is honoring to God. We see this mindset being taught by God throughout scripture, such as the following passages:

  • John 10:10 “The thief comes only to steal and kill and destroy. I came that they may have life and have it abundantly.” (NASB)
  • 1 Timothy 6:17  “ Teach those who are rich in this world not to be proud and not to trust in their money, which is so unreliable. Their trust should be in God, who richly gives us all we need for our enjoyment.” (NLT)
  • 2 Corinthians 9:6-8 “The point is this: whoever sows sparingly will also reap sparingly, and whoever sows bountifully will also reap bountifully. Each one must give as he has decided in his heart, not reluctantly or under compulsion, for God loves a cheerful giver. And God is able to make all grace abound to you, so that having all sufficiency in all things at all times, you may abound in every good work.” (ESV)

We can’t help but develop an abundance mindset as we steadily increase in our personal understanding that our God is limitless, He is for us, and He cannot be contained.

The Scarcity Mindset

In contrast, a scarcity mindset sees limitation and shortage at every turn. It’s a mindset that is easy to gravitate towards, but one that needs to be guarded against. A scarcity mindset contributes to an unfulfilled life, one that constantly is concerned about having enough, and others having too much. We’re warned about this in the Sermon on the Mount where Jesus teaches about how we are not to be anxious (Matthew 6:25-34, ESV). Scarcity thinkers tend to seek after materialistic achievements such as money, recognition, or power, instead of focusing on life-giving practices such as collaboration, generosity, and being open to change.

Fostering an Abundance Mindset

One way that can be helpful in thinking through which mindset you have is by reflecting on how you view different parts of your life. Do you share opportunities, ideas, your time, and resources? Or are you more apt to keep those things to yourself? Do you find it easy to celebrate when a neighbor, friend, or family member when they receive a promotion? Or do you tend to feel a bit of resentment and that you are more deserving of a promotion? Regardless of which mindset you feel that you are currently more aligned with, developing a stronger abundance mindset is a wise use of time. John C. Maxwell published an article about six ways to develop and model an abundance mindset. Here are his six suggestions for encouraging an abundance mindset:

  1. Offer words of appreciation
  2. Choose to see opportunity
  3. Remind yourself that there is more than enough
  4. Carefully select the company you keep
  5. Spend time in reflection
  6. Give more of what you want

Click here to read Maxwell’s complete article.

Viewing the Stock Market with an Abundance Mindset

Having an abundance mindset dovetails with our investment principle #9: “Base your faith and contentment in something other than investment accounts.” It plays a role in making you a better investor both when the market is up, and when it is down. An abundance mindset can help neutralize fear and greed. The fundamental belief that there is enough to go around helps us combat these two enemies of long term success. An abundance mentality helps avoid irrational decisions, such as taking unnecessary risk by betting on a friend’s hot stock tip or abandoning our investment strategy by moving to cash during a down market.

We see this mindset as a helpful lens for viewing the US Stock Market activity as measured by Vanguard Total Stock Market ETF (VTI).  So far in 2018, it has been a bit of a bumpy ride. US Stocks are up about 4% for the year. Given the volatile January and February we experienced, and the extensive media coverage of rising interest rates and threats of a global trade war, it’s easy to miss the fact that the US stock market continues to march ahead, adding to a stellar year of returns in 2017.

(source: Morningstar.com as of 07.09.2018)

An abundance mindset helps us keep a healthy perspective to endure, and may we say even enjoy, the ride of the market. It is also helpful to keep in mind that while US Stocks are the most common sector to reference when discussing “the market”, the stock portions of our LifeGuide InSight portfolios are invested in international and emerging markets as well.

So, which are you? Do you lean more towards scarcity or abundant thinking? Which one of Maxwell’s six suggestions can you adopt today to reinforce an abundance mindset in yourself and those around you?

Enjoy the rest of your summer!

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