The reason I started the MasteryOfMoney.com blog in the first place is I once heard everyone should be pursuing mastery in something. Since “money ranks right up there with oxygen on the need to have it scale”, why not pursue the mastery of money? (Quote credit to Zig Ziglar).
I’ve seen numbers as high as 60-70% of the general population live their lives with money concerns that could likely be eliminated with the right amount of information, study and practice.
So why don’t more people pursue the Mastery of Money?
As Carole Dweck points out in this MasteryOfMoney book review, it may be a function of their MINDSET.
In Mindset, The New Psychology of Success, Stanford University psychologist Carole Dweck breaks down the slight change needed to fulfill our potential as parents, business people, students, and significant others.
It boils down to whether we view the world through a growth mindset or a fixed mindset.
In the fixed mindset, there is a belief that talent and skill are things you’re born with and effort to build the skill results in looking foolish. After all, what good is putting forth a lot of effort if I’m no good at it anyway.
Consider it from a student’s perspective — if a young person believes they are not good at math, what is the use in struggling to become good in math. They aren’t. English is their subject.
From a business person’s perspective — I’ve never been good at Microsoft Excel, or giving performance reviews, or using project management software, so I avoid it at all costs.
The fixed mindset suggests that being ‘smart’ or ‘good’ is immediately proven. We either know someone is or isn’t based on their performance. People with the fixed mindset were asked in the book, “When do you feel smart?”. Their responses were:
“It’s when I don’t make any mistakes.”
“When I finish something fast and it’s perfect.”
“When something is easy for me, but other people can’t do it.”
All of the answers hint at mastery just being a part of them, not necessarily something they’re striving for or working towards.
The growth mindset, on the other hand, prompts other answers to the same question. When asked “When do you feel smart?” those with the growth mindset replied:
“When it’s really hard, and I try really hard, and I can do something I couldn’t do before.”
“When I work on something a long time and I start to figure it out.”
For those with the growth mindset, it’s less about perfection in the immediate term and more about learning over time. Or as Carole Dweck puts it “confronting a challenge and making progress.”
Praise Effort, Not Intellect
The most impactful piece of the book for me was Dweck’s description of how praise impacts the mindset we begin to embrace in life. As an example, she tells of young students who are praised for being “smart”, “brilliant”, and “amazing” for much of their young lives who then go on to college and fail miserably because they’re challenged for the first time in their lives. They begin to question their own validity because they’ve always been amazing, just ask their parents.
The praise, while well-intentioned, seems to backfire if the goal is to raise a child who learns to love to grow and develop.
In my own home, we used monikers like “amazing” quite regularly until this book was brought to my attention and promptly stopped telling our kids how amazing they were.
My insightful daughter recently asked me, “Dad, you used to tell us we were amazing and now you don’t, why is that?”
My response was, “I basically found out you’re all just slightly above average.” (Totally kidding.)
My actual response was, “I want to celebrate things like hard work, concentration, focus, and practice. It’s up to you to choose those things, and I appreciate it when you do.”
Praising intellect, according to Dweck, can give the improper illusion to some kids that they’re level of intellect is fixed. If they’re amazing at math and math becomes challenging, they may bail on ever getting better at math. Whereas praising effort may have them working harder because they know that hard work is rewarded.
My youngest son is a terrific basketball player. He literally has an IQ for the game that defies logic. And upon reading Mindset, I’ve been extremely cautious about the praise that I give him, keeping it in the areas of hard work, hustle, focus, teamwork and leadership. Never once have I told him he’s an amazing basketball player because I know there are kids in this country who would dribble circles around him. I’d rather he have a growth mindset about his skills and the game itself.
Mindset as it relates to MONEY
Because nearly everything I do has a bit of a money bent to it, I found the book to be incredibly relevant to most people’s relationship with money.
It’s not uncommon for me to hear people say, “I’ve never been good with money” or “she’s really the money person in our relationship, because I stink at it”.
Whether you struggle with money or you are in the pursuit of mastery of it, a growth mindset is essential. For it’s in the struggle and the challenge that learning and growth take place.
I think of all of the recent graduates and non-graduate student loan borrowers out there who have buried their heads in the sand about their debts. It’s a shame they spent the time and money on schooling yet never learned to love learning how money works.
After the screening of my documentary Broke, Busted & Disgusted at a film festival last year, a woman in her late 30’s or early 40’s stood up and said, “I’m in default and denial. I don’t care what happens but I’m not paying my loans. And now my soon-to-be 18 year old will be in the same boat.”
I approached the woman after the fact and tried to offer some suggestions on what she could do to remedy her situation and she couldn’t care less.
Hello, fixed mindset.
A review of Mindset by Carole Dweck