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.
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:
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.
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.
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:
Click here to read Maxwell’s complete article.
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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