How Mindset Determines Your Financial Future

When I went through law school, I worked as a tutor in the Academic Research Center, which focused on providing access to the legal profession for diverse and nontraditional students. One of the things we looked at was what kept certain groups down while other groups thrived. More often than not, success was about empowerment—success hinges on empowering people who are traditionally disenfranchised from entering the legal profession, and the program has been an amazing success for decades.

Over the years, I’ve found that economic success actually mirrors what I found to be the case in the Academic Research Center. Based on what I have personally seen, a group could be located in a depressed region with a bad government and somehow still be successful generationally. They would consistently pull themselves up out of whatever difficult situation they might have been in. Meanwhile, another group might be given every opportunity to succeed, or at least the same opportunity as a successful group, yet remain in generational poverty.

The X-Factor Difference

So, what is the difference between those who succeed and those who don’t–regardless of their environment? The answer can be somewhat complex in that it has to take into account that success requires people to collaborate with others to take advantage of available resources as they navigate the challenges they encounter. In other words, the individuals who succeed almost always find ways to leverage their way out of whatever situation they find themselves in. However, no matter what study you read, the same trends repeat over and over and ultimately boil down to one thing—what I call the checkup from the neck up.

The power our minds have on our reality is tremendous. The research and thoughts of Amy J.C. Cuddy, Ph.D, for example, have explored the strength our minds and bodies have in the outcome of situations we place ourselves in. Years ago, Dr. Cuddy introduced the concept of “power posing” in one of the most viewed TED talks in history. The idea behind her lecture was this: how you hold yourself physically, impacts what you believe about yourself and what others believe about you—which ultimately influences your reality.

It’s likely you heard something like, “you can do whatever you put your mind to,” at some point in your formative years—either directly or indirectly. Turns out there is truth to this when it comes to success. It comes down to mindset and a sense of power and self-worth. Unsuccessful people didn’t necessarily have a lack of resources. Rather, people with a certain mindset lacked resourcefulness. They didn’t believe that they could actually create their own destiny. So, the ultimate trait that separates groups who are almost constantly successful over time is their belief system. I’m going to explain how that works.

Do You Believe You Are in Control?

There is a significant mindset difference between those who have wealth and those who do not have wealth called locus of control. This is the belief that you actually have the ability to control your own outcomes. People with an external locus of control act in response to external circumstances. They have a mindset that whatever happens to them in life is a result of factors out of their control. People with an internal locus of control tend to believe that their life results are a result of their own attitude and abilities. They believe they have agency over their financial outcomes. This can be a powerful self-fulfilling prophecy. If you believe you have no control, chances are that you are not going to be successful. But here’s the good news. If you believe you do have control, the odds are much greater that you will be successful.

The people who are economically successful—and especially those families with multigenerational success—have taken the time to learn how to work successfully with money. I want you to know that you can control your money. You don’t have to let other people and external circumstances control you.