Markets go up and down, but one fact holds true: your money scripts– the unconscious beliefs you hold about money– will determine your financial health. So what’s the formula for achieving financial success? While we can learn much by studying the methods of people who have achieved wealth, many successful people would have difficulty telling you exactly what they did that made the difference. They just worked long hours, kept trying, didn’t give up, seized opportunities when they presented themselves, and made it big. Everyone is different, and it can be very difficult to replicate someone else’s specific method of achieving success.
Although the “secret” to achieving wealth can’t be distilled into a tidy one-size-fits-all formula, the truth is that people who are wealthy think and act very differently than those that are not. In fact, there are discernible patterns of beliefs and behaviors about money that are associated with wealth, and there are patterns that are associated with poverty and financial chaos.
While conducting research for my latest book, Wired for Wealth: Change the Money Mindsets that Keep You Trapped and Unleash Your Wealth Potential, I surveyed the beliefs and behaviors of 422 people from all walks of life, income categories, and levels of net worth. Participants ranged in age from 18 to 80 and had yearly incomes ranging from $10,000 a year to $1 million a year. The survey revealed some striking differences between the beliefs of the wealthy and of those who struggle financially. Here are some of the findings:
In the survey, those who rated themselves as having a lack of financial success were more likely to endorse certain money scripts. Since these beliefs were associated with less income and net worth, we call them “poor scripts.”
* Poor script # 1: “Your self-worth equals your net worth.” This belief was associated with poor investment decisions, overspending, and lower income. When we erroneously equate the acquisition of material things with our value as human beings, we set ourselves up for destructive financial patterns.
* Poor script # 2: “It’s okay to keep secrets from your partner around money.” This belief was associated with compulsive overspending, giving money to others at the detriment to our own financial health, and avoiding thinking about one’s own finances.
* Poor script # 3: “More money will make you happier.” This belief persists despite the fact that research shows there is no correlation between money and happiness above a household income of $50,000 per year. This belief was associated with workaholism- sacrificing family and health for the pursuit of money- miserliness, and ironically, lower income and lower net worth. The belief that more money or more stuff will make you happier is a common misperception in America, and one of the reasons behind the current economic crisis. We set arbitrary “more money” or “more stuff” targets, believing that those magical numbers and material items will bring us meaning, peace, happiness, security, or whatever else we feel is missing in our lives. The problem is that when the target is met, the corresponding payoff never quite seems to show up.
My research also found several money scripts strongly associated with higher income and higher net worth, called “wealth scripts.” Here are a couple of the more important ones:
* Wealth script # 1: “It is important to save for a rainy day.” We all know that saving is good, right? Of the seventy-two money scripts included in the survey, the belief that it is important to save for the future was the key difference between those who were wealthy and those who were not. After all, wealth is not about how much money you make, it is about how much money you save. Those who endorsed this belief as being less important struggled with overspending, higher credit card debt, and gambling problems.
* Wealth script # 2: “Giving money to others is something people should do.” To be honest, I was surprised that this belief was so strongly associated with wealth. However, it makes sense from a spiritual level. In order to receive, we must give. Yet this money script has a dark side: this belief is also associated with higher debt. Before you can give money to others, it must be yours to give!
The good news is that you can change your money mindsets, and if your pattern of thinking about money is associated with destructive financial behaviors, financial stress, and poverty, you can change that pattern to one that is associated with wealth. What we “think” we “do.” What we say to ourselves becomes our reality. Identifying our money scripts and challenging and changing the ones that are limiting our ability to attract abundance into our lives is an important step in creating wealth. With the right money mindset, we can begin to change our financial trajectory. Regardless of your starting point or your current financial situation, you can quite literally rewire your brain for wealth.