Selective Abundance
In a previous post, I touched on one of the personal finance rules that I personally live by, abundance is greater than scarcity. I found a chart by Aaron Endré that does a great job of contrasting these two mindsets.
While it’s easy to look at the right side of the chart above and be inspired, I’ve found it is much harder, in practice, to train yourself to think this way. In a world where, according to a recent survey by BankRate,
only 40% of Americans said they could cover a $1,000 emergency with savings
it’s easy to understand why scarcity thinking is front and center.
when your thinking is grounded in scarcity, you will never have enough money, time, happiness…anything.
I’m no stranger to scarcity thinking. Growing up, my family would often want to go out to eat as a treat, and that inevitably required checking the bank account balance or waiting until payday to be able to do so. Living paycheck to paycheck is often permeated by a scarcity mindset, and thinking abundantly can feel wholly unnatural. The problem is, when your thinking is grounded in scarcity, you will never have enough money, time, happiness…anything.
The good news is that making the shift from a mindset of scarcity to a mindset of abundance is something that anyone can do. For me, the shift started when I started a lawn mowing empire (I use the term empire loosely, but this kid cut a lot of grass!) at the age of 12. I started to realize that my capacity to achieve was only limited by my own ability. While the mowing empire was the start, it’s been a journey that’s taken years, and I still find myself getting stuck in a scarcity mindset at times.
The good news is that making the shift from a mindset of scarcity to a mindset of abundance is something that anyone can do.
Everyone will have their own catalyst moment that starts them on their personal journey to abundance thinking, so I won’t waste time diving deep into the building of my lawn care empire, however, I do think it helps to have real, relatable examples when making such a fundamental shift in thinking. Read on for how I’ve employed abundance thinking in my life.
Traveling Around Asia
A few years into my career after undergrad, I earned an opportunity to do an exchange program at work which allowed me to spend two months in Singapore. Unfortunately, with student loans and a relatively low salary at the time, my wife (Melissa) and I had very little in savings.
One of the benefits of the exchange program was that, due to the difference in workload, I would be able to routinely work Monday-Thursday instead of Monday-Friday. We desperately wanted to travel and explore the surrounding area on the weekends, as traveling to that area of the world from the US requires both a lot of time and a lot of money. However, from Singapore, the flights were super cheap and the hotels in the area were very affordable. The only problem is we had no money saved.
Wealth is more than the sum of dollars and cents in your various accounts. You cannot put a value on your experiences, but you can always make more money
Not everyone will agree with what I say next, and that’s okay. We decided to take out a travel rewards credit card with a 0% interest introductory period so that we could travel. I’m not going to pretend that it wasn’t a risky decision. It was. We racked up thousands of dollars of credit card debt traveling around Southeast Asia (although we did spend frugally). And I would make the same decision every time for many reasons:
- We would have spent tens of thousands if we had tried to do the traveling from the US at a later point in our lives. And who knows if we would have even been able to.
- We visited Malaysia, Borneo, Thailand, Vietnam, and Indonesia and we have stories that will last a lifetime.
- We knew that while we did not have the money at the time, there was a very high likelihood that we could pay off the travel in the near future.
- Wealth is more than the sum of dollars and cents in your various accounts. You cannot put a value on your experiences, but you can always make more money.
My message with this story isn’t to use credit cards when you don’t have money, rather, it’s to know what is important to you and go get it, even if it means taking on short term risk. There will always be time to recover from a measured financial risk, but some experiences are unique opportunities that will only present themselves once.
Moving to Park City
After a few years of living in Chicago after I finished my MBA, one thing manifested very clearly. We belong in the mountains.
Although we always thought we’d end up somewhere near the mountains eventually, this realization happened at a fairly inconvenient time. I was settled into my job in Chicago, Melissa had built up a good book of clients at the private practice where she worked, and she was pregnant with our first child. Yet, we knew we needed to be in the mountains to be happy.
Though we lived in Salt Lake City before, we often found ourselves venturing up to Park City. So when we moved back, we strongly wanted to move to Park City to be in the mountains instead of in the valley. There were a few problems, namely, Park City was about twice the cost for the same house and there were limited job prospects for both of us as it is a resort town.
The safe choice would have been to move to Salt Lake, spend less on a house, have Melissa join a private practice in the valley and drive the forty minutes to Park City on the weekends. I might have made that decision in the past, when scarcity drove my choices. However, we took the plunge and we live in Park City, surrounded by mountains, with trails literally out our back door. Our house is smaller and we don’t drive a luxury car like most of our neighbors, but the value of being footsteps to biking and hiking trails is worth far more to us than having a large house or luxury car.
So what’s the point?
If you believe deep down that you know where you are supposed to be, go there. The rest will fall into place eventually.
Our move wouldn’t have been possible if our thinking had been grounded in scarcity. As shown in the graphic at the beginning of the article, an abundance mindset allowed us do the following:
- The pie is growing (vs. the pie is shrinking): Melissa was reluctant to leave a great job at a private practice in Illinois. But instead of letting the fear of a lack of established opportunities dissuade her, she decided she would open and grow her own private practice so that we could make our dream of living in Park City a reality
- Think big and embrace risk: It would have been easy to look at the cost of living in Park City and write it off as impossible. However, instead of being discouraged, we went through a thorough evaluation of what we needed to be happy and found that while living in Park City was expensive, there were many trade offs we could make that would make it completely doable (one car — a less expensive one than we could have afforded if we lived elsewhere, refinancing of several student loans, the starting of alternative income streams, the elimination of extra expenses, etc.). Without a healthy tolerance for risk and an openness to change, we never would have gotten to the tradeoff point to see if we could make living in Park City a reality.
- Believe the best is yet to come: History is FULL of successful people who were in the right place at the right time. What we don’t hear about is the people who could have been in the right place at the right time but didn’t act on the opportunities that were presented to them — and I promise you, there are probably dozens or hundreds of the latter for every one of the former. If you believe deep down that you know where you are supposed to be, go there. The rest will fall into place eventually. For us, that place is Park City.
While I haven’t offered much in the way of “when x happens, do y” in this post, that is by design. I promise there will be more of that in the future. However, like life, personal finance is deeply personal. And in this area, as in many others in my life, I sincerely believe in thoughtful guiding principles, but am an even stronger believer in following your intuition. Sometimes things just feel right. The first step is being in tune with yourself so that you are able to understand what your heart is telling you. The second step is having an abundant mindset so that once you realize what your intuition is telling you, you have the courage to go after it.
Like life, personal finance is deeply personal.
