Once upon a time there was an OPTiMiST he went about his day with a smile on his face and the wind in his back. He was off to see his friend the PeSSiMiST. Mr PeSSiMiSTwas having his usual grumble about his day and life in general, why doesn't anything work and I am stuck with this life? Just listen to the news a meteor is going to hit the earth any time now Doomed, Doomed I say!
Naturally Mr OPTiMiST shrugged his shoulders (whatever next he thought) - and moved onto his joke of the day to cheer up the poor old chap unfortunately to no avail.
Then along came Mr ReaLiST he was going about his business, walking past the local lottery machine shaking his head on his way to deposit some savings at the bank...Hi guys see you in the pub after work for a beer.
Who are We?
We can all probably place ourselves in each of these classifications depending on our circumstances and mood.Perhaps whole countries could be generalized in one of the classifications - in the UK we always complain about the weather and always look at the other side of the coin. Not everything is rosy but it ain't bad. So we are probably more of a plan for tomorrow realist bunch.... Whenever I have worked in America I consider them as optimistic go-getters, very driven and optimistic about almost everything. These are generalisations for sure and completely off the mark depending on your point of view.
Exploiting the moment
These traits can be the financial independence worst adversary or even weakness. The world is setup to prey on these traits so that you squander your money.
The optimistic young adult starting out in the real world looking for an identity is quickly lured into the world of Sex. You must buy this brand of clothes, listen to this music drive that car. While you are at it buy this perfume / deodorant it is all you need to have scantly clad members of the opposite sex running after you. Feeling more optimistic about your chances?
On the flip side we have the DOOMERS! BEWARE THE DOOMERS! The end of the world is neigh, load up on food, guns and ammo - you can't eat it but you can use it and trade it. A trade in death - nice..... Hunker down, save cash under their pillow don't speculate don't get rich.
What about those weird realists - stuck in the middle - middle class? A nerd - you must have this games console, this most awesome powerful PC. A striver - buy these books to make you rich attend this course and buy these stocks. Save for your pension work hard until you retire at 70. Spend the rest and get the biggest mortgage possible. Bahh Humbug!
Now after recognising some of the weakness and what does the #financialindependence #downshifter do?
What should I be?
In THE.CoNTeNDeR'S opinion being an OPTiMiST can leave you open to taking too many risks all the time. A PeSSiMiST can affect his own health and miss great opportunities because he won't take risks, but one day he will be right and say I told you so! This leads to the ReaLiST, stuck in the middle perhaps DOOMED, DOOMED I SAY to middle class mediocrity.
Just looking at the above you really want to be a bit of all of the above - admittedly some more than others!
Developing a Financial Independence Mindset
So what is the right mindset to develop? As this blog is about financial Independence and Seeking happiness the editor will take the liberty of looking at a mindset suited to these noble goals.
The.OpTiMiST traits
- Can do attitude and go getting approach are wonderful traits. Being proactive in assessing what you want and what it will take to get there is the first step to financial independence anything else is just leaving it to luck.
- Developing a plan of action to achieve your goals - I AM GOING TO BE FI IN 7 YEARS!!!!
- I can get a higher paying job and I can reduce my spending
- Understanding there are real risks in life but they can be protected against. Putting in place some realism on inflation rates and investment returns. What if the income is lost do you have a new way of making some money in the future?
- Recognising you will must spend less than your income and have an emergency pot of money that you can replenish if there are urgent costs such as a storm damaged roof.
- What if sh** happens? This is where is is good to first frame it
- The Earth is going to be wiped out by an asteroid - you personally cannot do anything about it move on, man.
- Alternatively I am going to become ill and use up all of my savings so I must carry on working. While a real possibility assuming you will get is is a guess at best. Just consider would you get ill because you keep a stressful job - what a paradox.
- Worrying about do I have enough money - we have no real idea of FuTuRe investment returns and inflation.
- What The.PeSSiMiST in us tells us
- Don't burn any bridges you never know when they could be useful again
- Don't expect to be bailed out by the government
- Don't assume you will have a windfall
- Keep some insurance such as fuel and food to hand and multiple types of savings
Peace, prosperity and happiness
THE.CONTENDER
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