As Marcus Aurelius rightly observed: “Our life is what our thoughts make it”. What we think and what beliefs we have directly affect our emotions and actions. Beliefs are the opinions, perceptions and judgments we share and believe to be true. Beliefs about finances can support high earnings and good financial management or sabotage the achievement of financial security.
What beliefs are self-destructive?
During the financial coaching sessions I conducted, I repeatedly found that clients unknowingly hindered the achievement of their professional and financial goals, because they had harmful beliefs.
I will present 4 popular beliefs and explain why they can be a hindrance.
- “Money makes people selfish and materialistic”. Such an assumption is characteristic of the type of psychological financial identity referred to as “the money monk”. As I explained in the article Money personality and its impact on how you handle and feel about money, the money monk is a person who, either consciously or subconsciously, associates money with something bad or immoral. They usually focus on meeting just the basic needs and do little to increase their earnings. They usually prefer to limit their needs than to actively act to improve their financial situation.
I have helped clients who were subconsciously sabotaging getting higher earnings. They lowered their financial expectations during interviews or didn’t even try to apply for well-paid jobs. Some chose low-paid jobs from the beginning or didn’t seek a raise for years. I’ve even come across people who – once they had a real chance of significantly increasing their income – unknowingly took actions that kept moving that prospect further away. This is because they had a deeply rooted belief that money changes people for the worse. And because they didn’t want to become immoral, they failed to take advantage of professional or financial opportunities that arose.
Some wealthy people really are unscrupulous egoists. They use others or judge only through the prism of money. However, similar attitudes can also be found in some of the poor... It is not money alone that causes a person to become vicious or not very sympathetic. If someone has changed their values and behaviour as soon as they started to be better off, it means that deep down they were already like that... And the money only made it easier for them to show their true self, since they no longer had to pretend to be kind.
- “Only by working very hard do people get rich”. Much more inspiring and also closer to the truth is the English saying: work smarter, not harder. Slaving away from morning to night does not guarantee success. Millions of people do this, but still earn little. Worse – they lose their health and are too tired to do something creative or develop competencies in areas that are more highly valued in the market. On the other hand, many people have achieved success because they came up with a great business idea or took up tasks that were high-margin or highly remunerated. This did not always mean working more than a dozen hours a day. It is true that we have to put a lot of effort into every success. However, it is a trap to think that if you are not dead tired when you return from work, then apparently you hadn’t tried hard enough... It is also wrong to believe that hard work will eventually be rewarded... We all know hard-working people whose bosses, unfortunately, do not appreciate them, or “canny” people who do not do much, but are great at promoting themselves in the eyes of superiors and earn inadequate amounts in relation to the actual tasks performed.
- “Money doesn’t bring happiness”. It is sometimes the case that someone interprets this saying in such an extreme way that they will think that it is not worthwhile to seek financial resources, as this will not help them achieve well-being. So they won’t look for opportunities to earn more, or they will squander money instead of managing it wisely. You can’t buy love, friendship, health, or happiness. But the fact of the matter is that if we have a sensible approach to money and don’t fall into selfishness, toxic materialism or stinginess, money can help us a lot in being happy. For example: we can pay for an operation or rehabilitation that saves our health or that of a loved one, leave a toxic job, or ensure proper nutrition and rest. I described this in more detail in the article How to spend money to be truly happy?
- “Other people’s work won’t make you rich” – meanwhile, if you want to run a business, you can’t do everything yourself. This is not only inefficient in organisational and cost terms, but also physically unfeasible in the long run. Even if you were able to learn everything from accounting to marketing, you will earn more if you focus on what you are best at and what is crucial to your business. And you’ll outsource the rest to employees or third party contractors such as an accountant. By growing a business or being a passive shareholder, you obviously get rich from the work of others. If you act ethically, treat people with respect and compensate them accordingly, there is nothing wrong with that.
There are many more beliefs that can hinder the achievement of goals, including financial goals, and even the enjoyment of success and prosperity. Some beliefs are familiar to us. Others, unfortunately, we are not aware of, so it is all the more difficult to work on them. The greatest impact comes from beliefs that run in the family, because as children we absorb everything like a sponge and are not able to critically analyse beliefs, habits or actions until a certain age.
During a financial coaching session, an important element is to take a look at beliefs that hinder or support your efforts. It is worthwhile for you to make a list of both types of beliefs and think about how they affect your emotions and actions. Maybe it’s time for a change?
For tips on How to overcome self-limiting beliefs see my earlier article.