The power of ‘mindset’ is a beautiful thing.
Your attitude and frame of mind guide every decision you make, including those related to your job, business, and bank account. And Ramit agrees. In his article, “Don’t be broke: 5 wealth mindsets for a Rich Life,” he advises to focus on what you can control, adopt a growth mindset, let go of spending guilt, earn more on the side, and that the big wins are more important.
Today, let’s pull one of those and get deep: adopt a growth mindset.
Here, we look at the difference between a fixed mindset vs. a growth mindset to fully understand how a growth mindset will help you live your best life … your Rich Life.
The fixed mindset
Simply put, the fixed mindset is the belief that intelligence and creativity are fixed traits set in stone at birth that cannot be changed. With this mindset, individuals are generally consumed — or even obsessed — with placing themselves in two distinct situations:
(1) Demonstrating success
Those with a fixed mindset need to constantly be rewarded for their intelligence, experience, or even personality. They will seek out jobs, experiences, and situations where they will not only know they will succeed but they will also receive a physical, tangible reward for their success.
(2) Avoiding failure
On the flip side, those with a fixed mindset will do what it takes to avoid risk and failure. This includes telling themselves to avoid applying for certain jobs, asking for a promotion, or starting a business, for fear that any of these aspirations probably weren’t meant to be in the first place.
Those with a fixed mindset believe there is not much they can do to change themselves or the world, so why shoot for the stars when they have no chance of ever becoming an astronaut?
Those with the fixed mindset tend to…
- Wish to come off as smart
- Avoid challenges and risks
- Refuse to confront obstacles
- Consider effort a waste of time because everything is pre-determined
- Ignore criticism, even if it’s constructive
- Feel threatened by successful people
The growth mindset
The growth mindset is the opposite: the belief that some intelligence and creativity might be present at birth but over time can be cultivated and augmented.
Those with the growth mindset have no hangups or inadequacies about their IQ. They believe that they will naturally grow and change through experience, and that failure is not truly a failure, but simply an opportunity to learn.
Those with this “open mind” have replaced the hunger for approval with the hunger for learning. They see life as a laboratory for experiencing, testing, and growing. Unlike those with the fixed mindset, those with the growth mindset actively seek out risks and new, unfamiliar situations because these challenges will ultimately help them become better — more effective, patient, open-minded — individuals. New challenges mean chances to fulfill one’s potential, which leads to success.
Those with the growth mindset tend to…
- Wish to constantly be learning
- Seek out challenges and embrace them
- Face obstacles head-on
- Consider effort a path to mastery
- Feel that criticism is a way to learn and improve
- Derive inspiration from the success of other people
People with a growth mindset take risks
The growth mindset works well for those in business for the simple reason that obtaining employment, getting promoted, finding customers, building products, or hiring the right employees or partners all require creativity — the “thinking outside the box” cliche that I shouldn’t use here, but I am going to anyway.
While there’s certainly nothing wrong with working hard, delivering outstanding results, and pleasing your manager, co-workers, and customers in the context of a regular, 9-to-5 full-time job, doing or asking for more — money, responsibilities — requires assuming a certain level of risk.
Those with the growth mindset have already been challenging themselves for quite some time. They have made attempts at new ventures or new environments, and the results may not have been favorable. Of course, these would not be counted as failures, they instead would be classified as learning experiences.
Steps to develop a growth mindset
Forget the hard thought that a fixed or growth mindset is set from birth. Experts agree that everyone is actually a mixture of fixed and growth mindsets. Further, this mixture evolves with experience but assumes some risk. How can you make the transition?
- Destroy your invisible scripts – Invisible scripts are the inner truths we hold that control our lives and frequently hold us back from a Rich Life. Ramit has identified the most common invisible scripts and can show you how to destroy them.
- Create new habits by being brutally honest with yourself – Ramit calls this taking an “honesty bath,” and it requires looking at your strengths, weaknesses, and past behaviors to recognize areas of self-improvement.
- Learn that it’s OK to fail – Those with a fixed mindset avoid potential rejection and failure at all costs. However, to help you accept more of this in your life, Ramit has a 3-step process for dealing with rejection. The first step is called, “Let rejection excite you.”
- Spend on books or experiences that help you grow – You can’t figure it out all by yourself. Don’t deprive yourself of books and courses to help you adopt a growth mindset. Never question spending on what’s important to you and no limit on spending on health or education are #4 and #7, respectively, of Ramit’s 10 Money Rules.
- Give yourself time to evolve – Accept that it will take time to evolve. Patience is not a common trait in those with a fixed mindset, but you will benefit from more of it as you transition.
How a growth mindset will help you live your Rich Life
In the 5 steps to change your finances, Ramit’s #1 is to change your mindset.
Changing your thinking, adjusting your attitude, learning new skills, modifying your spending habits — these are all mini-mindsets if you will. Take the time to pick and choose wisely, stop and measure what’s working and what’s not, and you will be on your way to success.