Here’s What’s Standing Between You and Financial FreedomBy Jesse Giordano, CFP® | January 18, 2019
What does financial freedom mean to you? Your knee-jerk response may be a dollar amount. (I’ll be financially free when my net worth hits $X.) For others, the answer is directly tied to material wealth or status. (I’ll be financially free when I buy this house/car/fill-in-the-blank).
But I urge you to dig a little deeper, beyond numbers and material riches. What does it really mean to live a life that’s rooted in financial freedom? It all depends on what being free means to you, on the deepest level.
Over the many years I’ve spent as an advisor, my clients have taught me time and time again that how much money we have isn’t nearly as important as what that money brings into our lives. In other words, money is a resource that can free us up to live a life of happiness and purpose. When you take the time to examine your deepest desires, this idea likely rings true.
So why isn’t everyone living a financially free life? Even with crystal-clear desires and goals, there’s one make-or-break detail on which financial freedom is built—your money mindset. In simple terms, we’re talking about the lens through which we view and relate to money. Feeling like there’s never enough cultivates a mindset of scarcity and fear. An abundant mindset, on the other hand, feels altogether different. This is of critical importance because our mindset drives our financial behavior, and our financial behavior is what grows (or depletes) our wealth.
Navigating life with a scarcity mindset is a fear-driven way to live. Nowhere is this more evident than investing. Those with a never-enough mindset are much more likely to be reactive to market ups and downs. The market, by definition, is a volatile place, but research consistently shows that investors who second guess their choices and emotionally react routinely reap smaller returns than those who stay the course. Instead of basing their decisions on rational thought and data-backed projections, they make moves based on feelings of certainty—or, more accurately, what they perceive to be certain. (If I don’t pull out now, I’m certain I’ll lose everything.)
But here’s the thing about feelings of certainty: nine times out of ten, they’re generated by unreliable sources; 24-hour news cycles, culture, television, social media… but our intuitive mind has a hard time discerning the difference, resulting in “gut feelings” that actually lead to more scarcity. Look back on your financial life; instances of financial planning and investing. With the benefit of hindsight on your side, can you identify times in the past when you’ve overestimated or underestimated risk? Or made financial decisions that were rooted in illusions that were simply being peddled as truths?
The takeaway here is that unless you change your mindset, you’ll only continue experiencing more of the same. Living from a place of abundance and security is the only way to make a shift in the right direction. Why? Simply put, what we focus on is what grows, which is why changing your money mindset is no small thing. This is how you plant the seeds of financial freedom and abundance so that you can finally begin living a life of purpose. That’s a tall order for someone who’s going it alone, which is why working with an advisor is so empowering. A behavioral finance professional can help you pinpoint self-limiting thoughts and default behaviors, and ultimately help you make more sound financial decisions.
At Opal Wealth Advisors, we sit down with each and every client to identify their unique goals and develop personalized financial strategies to move the needle in a real way. We map out a plan together, reevaluate our mindset, then stay the course. Changing your financial reality has everything to do with changing the way in which you relate to money.
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