At Foresight Wealth Management, we have worked with hundreds of clients over the years. But when we break it down, we can generally separate people into two buckets—those who have an abundance mindset and those who have a scarcity mindset. People who experience a scarcity mindset believe that they never have enough. Interestingly, I’ve observed time and time again that this mindset isn’t related to how much someone earns. In fact, I’ve had clients who had millions—or even tens of millions—of dollars, and they were misers. They didn’t have a charitable bone in their body, and they couldn’t bring themselves to spend a dime. On the flip side, I’ve known people with very little money who believed that they had more than enough and always found ways to give to others.
Having an abundance mindset can lead to countless benefits, including a greater sense of security. So, how can we achieve it? Here are my top tips.
1. Spend less than you make.
This might seem obvious. But debt impacts us on much more than just a financial level—it also affects our mental and emotional well-being. Not surprisingly, studies have shown that debt causes anxiety, depression, and stress. And when people go into debt, that’s often when a scarcity mindset kicks in. There is a fear of not having enough money to pay for the necessities, let alone to pay off credit cards, car loans, or other forms of debt.
One proven strategy for getting out of debt is the “snowball” approach where you make minimum payments toward all your debts except for the smallest one—instead paying as much as possible toward that debt. Once the smallest debt is paid off, use the same strategy toward the next smallest debt and so forth. Commit any extra income to paying off debt and carefully consider whether something is a need or a want. I find that most people are much better off than they realize.
2. Maximize your tax planning.
Do you understand how taxes will affect your retirement? One effective way that people can improve their sense of financial security and abundance mindset is with smart tax planning. Even if you have a plan in place, it’s always a good idea to get a second opinion to make sure that you’re maximizing all tax benefits.
Taxes can be confusing, and little mistakes can be very costly down the road. At Foresight Wealth Management, our advisors understand the complexities of developing a tax-efficient retirement plan. We can provide a thorough analysis of all possible deductions and explore different options for tax savings. By managing your taxes before and after retirement, we can stretch more income out of your retirement accounts.
3. Take advantage of compound interest.
Money never sleeps—it’s either working for you or against you. That’s why compound interest is often referred to as the eighth wonder of the world.
Do you have a chunk of savings tucked away in a checking or savings account? In today’s environment where inflation is rampant, money that is sitting in such accounts—even if it’s earning 1 or 2 percent—is really losing money. And keeping large amounts of cash is even worse. There are several investments that offer a very competitive rate of return. By simply shifting to different types of investments and repositioning your assets, you can often generate significantly more income.
Another way that people leave money on the table is by failing to take advantage of corporate 401k accounts. I recommend that people invest at least the same percentage of their paycheck that their employer is willing to match. Once that threshold is met, it may make sense to invest more in the 401k or to invest somewhere else instead. Since a 401k is a long-term investment, it is wise to also invest in other ways that allow you to access your money more quickly and without penalty. We at Foresight Wealth Management can help you to determine what is right for you and your specific set of circumstances.
4. Protect your investments.
Do you have adequate insurance to provide for your family? What if you or your spouse passed away or became disabled? Would your loved ones be able pay the mortgage and continue living their current lifestyle? Adequate life insurance and disability insurance are essential parts of any financial strategy.
Another way to protect investments is through diversification. Do you have all your eggs in one basket? If that basket were to crash and burn, where would that leave you? It’s important to spread risk across several types of investments. That way, if one investment is underperforming, you can feel confident that another investment is likely doing well. This type of blended strategy helps to establish financial and emotional security. And when people feel secure, they enjoy peace of mind and an increased abundance mindset.
5. Practice gratitude.
We can often become robotic in the way we live our lives, rushing from one thing to the next with our blinders on. We forget to pause, take a breath, and recognize all the things in our lives that we can be grateful for. I am certainly guilty of this. But practicing gratitude can change our entire outlook.
Allow me to share a personal example. I have a son who was born with a cleft lip and palate. When I first saw him, I remember feeling so sorry for him—and for myself. But when I walked into the waiting room at the craniofacial/cleft palate clinic at Primary Children’s Hospital, I looked at all the other children in that room and started crying. I had an overwhelming sense of gratitude that my son only had this challenge to overcome. My scarcity mindset around my son shifted from that of victim to one of gratitude and abundance, and I realized how blessed we truly were.
Gratitude and abundance are contagious—there’s an undeniable energy around them. And when we focus on what we are grateful for, that sense of gratitude and abundance will only continue to grow.
6. Be generous.
Whatever your religious or spiritual beliefs, we can all agree that the money and possessions that we acquire in this lifetime are not coming with us when we die. So, why not enjoy the journey and create some priceless memories with our loved ones along the way? This is something I’m working hard to do with my own family. In fact, my four boys recently told me that one of their favorite things about me was that I made the effort to regularly create experiences for us to enjoy together.
You might consider loosening the purse strings not just for family but for strangers as well. If you’re like me, you are often approached about donating to one worthy cause or another. It can be overwhelming. But I’ve created a rule for myself: Even if I don’t feel like giving, I lean in and do it anyway. I’ve found that when I give to others, it always comes back to me at least tenfold—often in unexpected ways.
Now, I’m extending the invitation to you. If you aren’t a person who normally makes charitable donations, I encourage you to give a little. If you’re a person who gives a lot, then give until it stings. Try it and see what happens. My prediction is that you will feel happier for making the sacrifice to help someone less fortunate, and you will be more aware of the abundance in your life.
Creating an abundance mindset takes time and effort. I’d love to help you and your family find the peace that comes from experiencing financial abundance, so please call me at 801-462-2200 or visit foresightwealth.com to learn more.
► You’ll also like: Is Your Estate in Order?
Information presented should not be viewed as personalized investment advice. Always consult your financial professional regarding your specific situation. All investment strategies have the potential for profit or loss. Expressions of opinion reflect the judgment of the presenter and are subject to change depending on each client’s situation. Advisory services are offered through Foresight Wealth Management, LLC, a Registered Investment Advisor with the SEC. Foresight Wealth Management, LLC, only transacts business in states where it is properly registered or is excluded or exempted from registration requirements. SEC registration does not constitute an endorsement of the firm by the Commission and does not imply that the advisor has achieved a particular level of skill or ability.
