Updated: Aug 5, 2019
Reason 3: You haven’t invested enough in yourself
This is not only about money. This is bigger than that.
If you want to get good at anything it requires a certain level of skill/knowledge and the right mindset.
A commonly held belief in sports is that of an athlete’s performance 10% is skill, but 90% is mental.
Why do superstars in the NBA, the best basketball league in the world, end up not performing well and fizzling out?
Is it skill level?
Probably not. They are among the top 500 hundred players IN THE WORLD!
It’s not skills.
It’s mental. It’s emotional.
They put in all the years and dedication to develop the skills so they could reach the NBA.
They have all the skills that they need to compete at the highest levels, so what stops them?
Their own emotions and mental state.
We see players go in slumps and then come out of it.
An NBA season is non-linear, much like our lives. Ups and downs.
Some players sign the big dollar contract, and immediately lose the drive to compete and win.
They get comfortable and lose their edge. Skills stay in-tact, but their own mindset defeated them.
Some start missing shots and then they lose confidence and think “maybe I can’t do this anymore. I’ve lost it…”
Have they suddenly lost their skills? No, but they have lost the mental game.
This is often the same with us
Sometimes we have all the skills/knowledge that we need to be successful, but it is our mindset that is hurting us and causes us to fall.
Other times, we don’t have the skills. Those we must acquire.
That is where the investment comes in. We must invest time and money to develop the skills/knowledge.
We MUST have both parts: skill and mindset.
What does this have to do with Money?
Everything. Or, at least 90%.
You see, Daniel Kahneman won the Nobel Prize in Economic Sciences in 2002 for his groundbreaking discovery that close to 90% of financial decisions are not made with reason, but with emotion.
That is a lot.
No wonder we sometimes make lousy decisions with our money, we didn’t base our decisions on logic or reason, it was based in emotion.
This is why financial scams work.
This is why advertising works.
This is why in the stock market many people sell low and buy high.
This is why we spend money we don’t have in order to experience the happy emotions of a tropical vacation, or driving the latest model of our favorite car.
This is why we feel like we aren’t getting anywhere by putting in that 5% of our paycheck into our 401k, so we stop.
These are not logical decisions, they are emotional.
How do we make progress with money then?
We must have the skills and the mindset to manage our money effectively.
To do that you have to invest in yourself. Dedicate time and money to mastering the skills and knowledge.
Think about your favorite hobby.
Would you consider yourself kind of an expert at that thing?
What did you have to do to get to that point where you know so much about that thing.
Whatever it is I’m guessing that you dedicated significant amounts of time and money to immerse yourself in it.
Now, you need to invest significant amounts of time into gaining the skills and mindset to manage your financial situation.
How do I know this? Because I was once like you.
My major in college was Middle Eastern Studies/ Arabic. It was a very intensive program culminating in a study abroad in Amman, Jordan.
After that study abroad I felt I was right on track for my goal of working for the State Department and traveling the globe with my family.
I had worked for that goal for years.
I also had serious financial goals and dreams that I wanted to achieve with my family. It was in this last semester of college that I had a serious epiphany:
“Wealthy people become wealthy because they figure out how money works. If I don’t learn how money works, I will never create the type of life that I want for my family”
That completely changed the game for me. My mindset shifted dramatically.