- Don't let yourself fall victim to a poverty mindset. Keep reading to learn what a poverty mindset is and how you can overcome it for longterm success.
Most businesspeople know their mindsets play major roles in their successes. They may not realize, however, that perceptions of money and wealth could also influence their decisions, whether in the scope of their enterprises or personal lives. Some people have a poverty or poor mindset, while others uphold an abundance or rich mindset. Here’s a look at how to tell the difference, plus tips for breaking free from a poor mentality.
What Is Poverty Mindset, and How Could It Hinder a Business?
The first thing to clarify regarding the poverty mindset definition is that it’s not about how much money a person has in their bank accounts. It’s entirely due to thoughts and perceptions, which, in turn, shape someone’s decisions and beliefs.
Someone with a poverty mindset sees a surplus in resources as an opportunity for increased consumption, and they often center their efforts on making immediate positive changes. In contrast, a person with a rich mentality focuses on using the excess to create momentum that causes future gains.
Similarly, the rich vs. poor mentality causes a difference in priorities. The rich mindset prizes options that keep paying off long after the initial investment. Someone with a poverty mentality, though, primarily seeks investments that speedily reward them but may not continue generating profits over longer periods.
Those are just some of the many characteristics of these two mental frameworks, and there will be more covered later. Even knowing the basics should get someone thinking about these mindsets and what they mean for business growth. Since someone with a rich mindset stays committed over time, they’re more likely to persist through temporary downturns. In contrast, someone with a poverty mindset may give up easily.
The poverty mindset may also discourage someone from forming enduring relationships or attending events that facilitate networking. Thus, such a person could have more difficulty finding other business professionals to rely upon for help getting out of tough situations.
A Persistent Lack of Wealth Over Generations Could Exacerbate the Poverty Mindset
Another characteristic associated with the poverty mindset is the belief that the way things are now is how they’ll remain. It’s easy to understand why thinking that way could make it difficult for a person to rise above their current circumstances. Generational poverty occurs when being poor seems to run in a person’s family, and it might make someone more likely to have a poverty mentality.
The exponential growth of generational poverty means three families could create more than 700 other households throughout five generations. Some analysts see the poverty mindset and generational poverty as intrinsically linked. However, they think the way forward starts with altering the brain with repetitive and alternative messaging.
For example, if the attitude in a person’s household, as well as the content they see in the media, repeatedly reflects things like self-confidence and planning, that individual may be better equipped to beat the poverty mindset. That could prove true even if they grew up poor, as their parents’ and grandparents’ generations did before them.
If a poverty mindset partially originates because of a lack of generational wealth, that situation could carry over into a person’s company by making them feel overly fearful any success achieved might disappear without warning. They may also think good things are not for them because of their past circumstances.
Investments Are Both Personal and Business-Related
Some people who write about the rich mentality vs. poor mentality also describe the first type as a “millionaire mindset.” They explore how especially rich people behave compared to those who don’t have such abundant financial resources. One difference relates to views on investing, which wealthy people often do. Those with a poor mindset may not — but they could.
Business investments that go against the poverty mindset could include ongoing team training and a multiyear effort to drive sales through increased spending on technology. Breaking free of the poor mentality also means spending time on personal enrichment. For example, one relevant statistic is that billionaire Warren Buffett read at least 100 investing books before turning 20.
Thus, a person who wants to display the rich mentality rather than the poor one must continually consider how their actions could pay off — even if not immediately. They realize many investments take time to reach their full potential but are often worth the wait.
A person demonstrating the poverty mindset may have difficulty agreeing to any long-term investment. This doesn’t mean they are lazy, but the tendency to balk at investments that may not become fruitful for months or years connects to perceptions of money. Several of the characteristics of the poverty mindset relate to fear. Thus, being scared of undesirable possibilities curbs the desire for investments — personal or company-related.
Someone showing the poor mentality is often afraid of risk-taking, especially if doing so involves finances. The ongoing preoccupation with money causes a person to be frightened of not having enough and unwilling to use money in ways that could help their businesses grow. Moreover, they often fall into a pattern of small thinking rather than embracing big dreams. That trait, too, can impact a person’s willingness to use resources to help their company prosper.
Changing the Poverty Mindset
Once people know the poverty mindset definition, they often understandably screen themselves for the traits discussed above, as well as some of the other aspects with this way of thinking. The good news is that anyone can use persistence and dedication to shift out of the poverty mindset and start thinking about money and wealth differently.
A straightforward starting point is to spend more time around people who have positive and uplifting views about finances. Doing that enables an easier recognition of the contrast between rich mentality vs. poor mentality. Those struggling with a poor mentality can also ask those close to them to listen for negative sentiments about money and gently remind them to broaden their perception.
Another option, recommended by economist Anne Beaulieu, is to think of money as a tool to experience something. Next, a person should call to mind limiting beliefs that further their unhealthy opinions about money and their origins. For example, maybe a businessperson’s father told them, “Money doesn’t grow on trees” to encourage saving cash as a youngster. Perhaps that familiar phrase now gives the individual a tendency to hoard rather than spend to advance a company.
A person can also investigate whether an outside influence — such as a financial adviser or a mental health counselor — could aid them in improving their thought processes about money. Hearing feedback from someone not caught up in the situation every day could allow that individual to finally grasp how their poor mindset restricts the company’s prospects.
Getting Over the Poverty Mentality Is a Worthwhile Aim
Conditioning causes people to reflect on their past experiences and use them to shape their future expectations. Thus, a businessperson who primarily knows or fears impoverished circumstances may take months or years to start showcasing the rich mentality most often. However, making progress could let the professional reap the rewards for the rest of their life while seeing the company thrive due to their efforts.