Let the dialogue begin! Starting immediately, this blog is open to comments.
Here are the responses from one of the three winners from the last blog’s contest. The writer is Marc from the Southern California area. Congratulations, Marc, on your gift of the one-hour Psychology of Money Intro CD.
Marc’s Story
1) Think of an example in which Prosperity Thinking manifested a successful self-fulfilling prophecy with your money or work.
“I have always believed in myself and my ability to manifest financial success (Prosperity Thinking). After teaching for seven years, my friends took me skiing, and I was hooked. The only challenge was that I couldn’t afford to ski very often on my salary. Fortunately, I learned that if I could get fifteen students to go with me, I could ski for free. I found it so easy to get the students at my school to go on my trips. I actually was able to develop this as a small business on the side. For the next ten years while teaching, I kept getting more and more students to ski. It became a highly enjoyable side business for me, combining pleasure with money.”
“Gradually, I branched out from ski trips to other venues. I thought it could be worth the risk of giving up my stable, relatively well paying career because of my passion to develop the travel business. After doing some soul searching, my passion and deep belief in myself (Prosperity Thinking) won out.”
2) Think of an example in which Poverty Thinking manifested a negative self-fulfilling prophecy with your money or work.
“Before reading your blog I could not think of any Poverty Thinking I had about my new career. I became successful right away and my trips were so popular that I added several new locations.”
“However, I now realize I did have Poverty Thinking that manifested a negative self-fulfilling prophecy and caused me to make a lot less money than I could have. In my business, I have a net cost and can mark up what I think is reasonable for my profit. Due to the financial fear I felt about the uncertainty of replacing my teaching income (Poverty Thinking), I minimized my mark-up. Despite being told by my customers “How can you charge so little for your trips,” I worried about people thinking my prices were too expensive. It took a number of years for me to overcome this type of thinking and to raise my prices.”
“The results: Since my overhead for each person was the same, my new prices translated into a dollar of profits for each dollar of increased mark-up. Since my original profit margin was so low, this resulted in increasing my net profits for the same number of customers by 50% the next year! These additional profits gave me more confidence (Prosperity Thinking) so I expanded my trip offerings and increased my profits faster in the following years.”
3) Briefly describe what you learned about money and/or about yourself from these examples.
“Despite my strong belief in myself, my Poverty Thinking in this one area caused me to charge too little for my trips. I could have made a lot more money if I had enough Prosperity Thinking to raise my prices sooner. Also, from doing the exercise, I now realize that my delay in raising my prices resulted in growing my business more slowly. Now, I can see how much one area of Poverty Thinking can reduce financial success.”
Even though Marc’s travel business has been very successful, his comments showed he understood how his Prosperity Thinking and Poverty Thinking produced different self-fulfilling prophecies that influenced his financial success… for richer or poorer, for better or worse.
What are your experiences with Prosperity and Poverty Thinking?
What interesting stories do you have to share?
Beginning next week, the coming series of blogs will be about Psychology of Money’s six psychological money traps that can undermine your goals. These blogs will give you a variety of tools to navigate the traps successfully so you can enhance your financial, relationship and life success.
We call these traps the RAPIDS. For those of you who don’t want to wait a full week before learning about them, you can get a sneak preview by watching Dr. Gottfurcht’s keynote speech on the YouTube video called Mackenzie University Part 2. They can also be accessed at our web site, www.psychologyofmoney.com
James W. Gottfurcht, Ph.D.
Zoreh Gottfurcht
I’m happy that you’re now inviting public comments on your blog and I’m honored to respond. I learned so much from watching this week’s video. It is truly fascinating to observe you teach other therapists. As I was watching I felt like a fly on the wall eavesdropping on a brilliant conversation between master and student. The one thing that always resonates with me regarding your Psychology of Money philosophy is the way you dissect Prosperity vs. Poverty Thinking. As I observe my self in the matter I notice that I flip from positive to poverty thinking all the time depending on the situation. In certain financial or investment challenges that come up I often fall back on the innocence of that unsure kid that dwells deep inside me and I begin to make immature choices and decisions. Other times I feel fully confident and make choices out of strength and surety. It’s only after reading your books, blogs and website that I am now continually aware of exactly who I’m being at any given time (the kid or the man) and have the tools to make the appropriate correction. Thank you so much Dr. Gottfurcht for the work you’re doing to help people peel away the emotions from an often very emotional topic, like money.
I loved reading Mark’s story because it was such an inspiring example of prosperity thinking. The poverty thinking really illustrated that sometimes such thought patterns are very subtle and not so glaring in our daily lives, but still need to be addressed. It seems to me if you had overt clues and subtle clues to poverty thinking, it might be an interesting and helpful area to explore.
I agree with Andrea that Poverty Thinking can be difficult to ferret out. For me, this type of thinking is typically hidden in one of my blind spots. It’s unusual when I can identify it by myself. What I find that works is to discuss my financial frustrations with someone I trust, like my wife, a close friend, or a psychologist. Another thing that has helped me was taking one of Dr. Gottfurcht’s workshops at UCLA Extension. We did exercises in groups of two or three and provided each other feedback. Again, it came back to someone else being able to see something inside of me better than I could.
I’d be interested to hear what Dr. Gottfurcht has to say about the clues to Poverty Thinking. The first clue for me is usually frustration. Something is not working. I’m not getting what I want or expect. The more overt clue is when I see a repetition of unmet expectations. At that point, the thinking and analyzing begin. This is where I think a series of leading questions or list of traps would be helpful.
My comments represent a different side of the coin from the blog post that Marc provided. Marc mentioned how his Poverty Thinking of not charging other people enough for his services cost him profits while my comments are about not paying other people enough for their services cost me extra.
Prosperity Thinking:
There was an apartment building in Burbank that I wanted to buy, but it already had an offer on it near the asking price. I was allowed to attend the initial inspection by the selling broker with the new buyer. The new buyer did not show up and I was able to submit an offer.
With a partner, we were able to buy the building, and it needed substantial remodeling work.
Poverty Thinking:
Instead of hiring a regular construction company, we used an unlicensed contractor to save money. While the work was excellent, it took 6 months longer than planned which deferred the rental income we could have been collecting.
What I learned:
Paying a little bit more for professional work would have allowed me to make more money sooner.
Dr. Gottfurcht -
I love how you focus as much (if not more) on poverty thinking) as you do on prosperity thinking.
Just as an architect would first want to take care of the foundation before putting on the roof: in a similar fashion, I agree whole heartedly with you that we should deal with poverty thinking before prematurely getting distracted and focusing on poverty thinking.
On a similar theme, thanks for your article on “suicide” and on what a man is “worth.” While we all know that we come in with nothing and leave with nothing – apparently somewhere “in the middle” we get stuck.
Once again, BRAVO!!!!
Al Secunda/Author
“The 15 Second Principle”