Psychological Money Tricks – Ch. 4 of Conquer Financial Freedom


Psychological Money Tricks

Succeeding in life and financially can be mostly a psychological game. Sometimes the first step in achieving something is telling ourselves that it is possible with effort, planning, strategy and work. Here is the great news. I believe that a strong mind can be trained and developed over the years. It is like any muscle, when we exercise and stress it in the right way, it becomes stronger and more adaptive. Here are some of the top mental habits that one should master in order to build wealth and conquer financial freedom:

Delayed gratification & impulse control

 Exercising our delayed gratification muscle is a huge skill to build wealth over time. If someone has to have “everything” now, then that person will go out and put every fancy thing on a credit card and go into debt to fund a fantasy life. The fancy car, the designer clothes, the high end restaurants, the huge house, etc. This results in huge amounts of high interest debt. In other words a wealth building black hole. The black hole becomes so large that it is impossible to build wealth. The black hole takes all the resources and energy just to keep it fed, leaving no energy to build the critical mass of assets required for wealth. The good news about delayed gratification can be strengthened with practice and consciousness.

Manage Stress

There will always be some level of stress in life, it is the nature of life and survival. And some stress makes us stronger and more resilient. But there is a toxic and continual kind of stress that messes with our brain wiring and makes delayed gratification and self control harder. According to Dr. Gordon, “stress negatively affects brain function, especially the neural components of the reward system.” Without getting into a bunch of complicated biological information, basically when we are stressed the dopamine (feel good chemical in the brain) becomes more “valuable” to us. So the bottom line is do what you can to reduce toxic stress. Walks, nature, yoga, healthy foods, time with nurturing friends and family, a new job, etc.

Distract yourself with activities that do not cost money

What things can you fill your time with that do not involve spending money impulsively? Start with making a list, I do love the awesome power of lists! Working around the house, spending time with people that share your values, games, puzzles, low cost hobbies, working out and exercise.

Let your mind wander sometimes

Research suggests that people who let their mind wander reconnect with long term goals. Especially after concentrating for a long time, let your mind rest and wander a bit. Use your imagination and fantasize.

Be grateful for what you have

Focus focus focus on gratitude. Really look at and appreciate all the stuff you already have. At one time it was all shiny and new. Clean it up, organize it and you may be less inclined to go buy the new shiny thing. Research also suggests that having gratitude leads people to value future options even more.

Articulate your priorities and values

One thing we are trying to teach our children is about priorities. For example chores and work come before fun and entertainment. The healthy foods come before a small desert. If you prioritize building wealth over having a fancy car, new clothes and expensive meals, then you will move closer to the direction of building wealth.

Find a way to release some of the desire to instantly satisfy

Is there some other way of satisfying the urge. Perhaps you do have a desire to shop, then go to the thrift store. You will release the urge without blowing the budget.  Jerry’s favorite ice cream is called Halo Top and they make their entire marketing campaign around eating the entire pint of ice cream all while only consuming a few hundred calories.  So this minor indulgence plays an important role in managing feelings of stress and delayed gratification for the bigger and more important things.

Caring less about what others think of you

This trait is consistently cited as a common trait of self made millionaires. It does not mean being some social pariah. It does mean thinking for yourself and trying to use an independent mind. What is important here is to not give into some urge to create ostentatious displays of wealth to impress others or make them think of you in some way. Buying fancy things and baubles can some times be about sending a message. Self made millionaires seem less interested in sending a message and more interested in building wealth & security.  

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