How to shift your mindset when planning your investment future
If I hadn’t learned from other people’s mistakes, I wouldn’t be where I am today. Here, I share with you the common mindset traps that people fall into, and how to avoid them. These are lessons that can either keep you financially stuck or help you move toward financial freedom.
Keep in mind that many of these lessons aren’t just relevant to people in their 20s; they apply to anyone under 40 trying to build wealth. If you’re over 40, don’t worry – it’s never too late to learn and adjust your financial strategies.
Lesson 1: Linear jobs are packed with competition
One of the biggest mindset traps people get stuck in is following the wrong career path, choosing jobs that are highly competitive and don’t offer much growth potential.
Linear jobs – the ones where everyone starts at the bottom and works their way up – are incredibly overcrowded and competitive. Think of jobs in admin or entry-level positions. These are jobs that don’t require specialized skills and could easily be replaced by someone else or even by AI.
At the bottom of the career ladder, loads of people are vying for the same jobs and promotions, and it’s easy to get stuck – which means you’ll struggle to increase your income over time. The higher you go, the fewer people can do the job, so employers are more likely to pay top dollar.
If you want to increase your wealth long-term, upskill and aim to move up to positions where you’re harder to replace. However, it’s important to remember that more money doesn’t always equal more happiness. So, keep your personal values in mind as you make career decisions.
Lesson 2: Hustle hard and relentlessly before 30
If you have big goals, you need to be willing to fight for them – and the earlier you start, the better.
Before you hit 30, you might be more willing to take risks, work long hours and live with less to achieve your dreams. As you get older, responsibilities such as family and mortgages tend to slow you down.
If you want to increase your wealth long-term, upskill and aim to move up to positions where you’re harder to replace.
If you’re in your 20s or 30s – or if you’re single or don’t have kids – now’s the time to push hard. Whether it’s building a business, working extra hours or investing in property, this is when you can make the most progress.
Lesson 3: Trust your own path over others’ opinions
Your friends and family may not be able to give you the best financial advice. While they care about you and want to keep you safe, their advice often comes from their own experiences and fears.
For example, if your parents had a bad experience with property investment, they might discourage you from buying real estate. But just because they had one bad experience doesn’t mean it’s the right advice for you. This is why it’s crucial to surround yourself with people who are where you want to be financially.
These are lessons that can either keep you financially stuck or help you move toward financial freedom.
While following the advice of family and friends without question is a mindset trap to avoid, you shouldn’t dismiss the advice completely. The people closest to you share their opinion with the best of intentions, coming from a place of love and care.
So, when they question your decision behind a particular investment (that happens to be a property), you need to welcome the opinion and use it to further strengthen your investing plans and thesis.
Lesson 4: Money is important
Let’s be real, money is important. It might not buy happiness, but it certainly helps reduce stress and opens up opportunities. If you make money a priority early on and set up systems to manage it, you’ll spend less time worrying about it later.
Financial stress is one of the biggest causes of anxiety, and if you don’t make money a priority, you could find yourself trapped in a cycle of worry and frustration. The key is to get it right early and then tweak your approach as your life evolves.
The lesson here is to be patient and keep your eyes on the bigger picture.
Related to this, living beyond your means is a significant mindset trap. If you’re spending more than you’re earning and relying on credit cards or loans to maintain a lifestyle you can’t actually afford, you’re setting yourself up for long-term pain. It’s like digging a hole that only gets deeper over time.
Not having a clear plan for your money is another trap. Without a budget, it’s easy to lose track of where your money is going, which can lead to unnecessary expenses and missed opportunities to save or invest.
Lesson 5: Life changes slowly – until you hit a setback
Life often changes gradually, and we don’t notice it until we hit a setback. We tend to overestimate what we can achieve in the short-term but underestimate what we can accomplish in the long run.
For example, you might set a goal to save US$100,000 in a year and only hit US$40,000. But over five years, with good investments, that US$40,000 could grow far beyond your initial expectations.
The lesson here is to be patient and keep your eyes on the bigger picture. Don’t be discouraged if you don’t hit your short-term goals; long-term success often exceeds your expectations.