What differentiates the wealthy from the not-so-wealthy? Besides the amount of money in their bank accounts, their money mindsets.
Over the past 4 years, I have studied the difference between those with money and those without it. Fundamentally, those with money have different mindsets and priorities than those without.
Mindset influences outcomes, so here are 5 money mindsets of wealthy women.
- Money matters.
- Initiate conversations about money.
- If you aren’t investing, you are losing money.
- Make your money work for you.
- Obstacles give you strength.
Please note I am not a licensed financial advisor. This information is for education purposes only. Every person has a unique financial situation. The best approach will be different for everyone. Accordingly, do your own due diligence before making any financial decision.
Money Mindset 1: Money matters.
I sometimes see people say, “Money doesn’t matter, life matters.”
I agree that life matters most; however, in this modern world, money skills are essential survival skills, like hunting and gathering back in the day.
Often people seem to have a misconception that if you care about money, you can’t also enjoy life.
Money isn’t everything but having money or wanting money isn’t bad. Money can make life easier.
I think of it like Monopoly. The game is fun, unless you’re the one who can’t afford to make it around the board.
Money makes life better. Having financial stability gives you peace of mind. Having money gives you options. Options give you greater control over your own life.
When we have control over our own life, we put our happiness in our own hands.
Money provides the means to live.
Wealthy women know and appreciate the real value of money.
Money Mindset 2: Initiative conversations about money.
No one has ever approached me and spilled, “Here’s how I made my first $100K.”
People likely won’t volunteer their knowledge about money. Money is a personal topic that society has conditioned us to believe is taboo to discuss.
By society I mean the rich elites (top .1%) who benefit greatly from the middle class staying in the dark about money. The rich profit from the general public’s lack of financial literacy. Why do you think it’s not usually taught in school?
That’s why initiating conversations about money with people you feel comfortable with is necessary for learning.
Every time you have one of those conversations, you may have more questions. As you hear people talk about money, they will say terms you’ve never heard of. They will reveal concepts that you will need to hear about 10 more times until it clicks.
A conversation with the right person will teach you more than you could learn from a Google search or a book because your discussion will lead you places you would never know to ask about.
If you don’t have someone to talk about it with, find people who share this information. You can find some valuable snippets online on TikTok/Reels/Shorts, but in short videos you usually can’t get all the relevant information.
Shameless plug for our TikTok and Instagram.
You can learn more about topics that interest you with books, podcasts, and YouTube.
Wealthy women find people they trust to talk about money with or find experts who share this information.
We also offer a free Wealthy Women club weekly newsletter that has been described, “Like the Wall Street Journal, but if it came from your friends’ groupchat.”
Join the club here.Money Mindset 3: If you aren’t investing, you are losing money.
Prices rise faster than the savings rate in your bank account can keep up.
In a typical year, prices rise 2-3%. Compare that to typical interest rates in a savings account .01%.
That means your money won’t buy as much in the future as it will today.
This inflation will steal your wealth. Investing provides the means to counteract this and build wealth instead. (Read more about how to stop losing your money and time here.)
Investing is like driving the freeway in Los Angeles. Not everyone who has money knows how to invest, just like not everyone who drives a car in L.A. will go on the freeway.
Sure you can avoid the freeway, just like you can avoid investing. But it will take you longer to get to your destination and there will be some places you just can’t get to.
It’s the same for you with your money goals. It likely will take you longer to achieve them and there are some, like retirement, that you may never achieve without investing.
Read the complete index fund investing guide for beginners here because Wealthy Women invest.
Money Mindset 4: Make your money work for you.
Money serves one purpose: to make your life better.
Money on its own is merely a piece of paper or a number in a bank account. The value comes from what you can exchange it for.
Ask yourself, “How does money make my life better?”
For me, it provides me with financial stability and peace of mind knowing I can pay my bills. Additionally, my aggressive investment contributions in my early twenties will equip me to retire at 62, even if I stopped investing now. My money is my freedom.
Side note: If you’ve wondered how people do these estimates and want to know when you can retire, here’s a calculator.
On a day to day basis, money makes my life better too. This week an airline assigned me a middle seat in the back row by the bathroom for a 4 hour flight. In the past, I would have begrudgingly dealt with it.
But this time I decided to pay an extra $50 for my preferred aisle seat over the wings because I knew I would feel most comfortable there.
I cringe a little as I confess this upgrade because a few years ago, I would never “waste” money like this. Now I recognize that the point of having money is making my life better. This is what better looks like for me.
Wealthy Women use their money to make life better.
How can you use your money to make your life better?
Money Mindset 5: Obstacles give you strength.
You can’t reach the next Angry Birds level until you clear all the obstacles in your current one.
Life is similar. Obstacles appear. Overcoming them gives you the strength to reach your next destination.
Overcoming the financial obstacles on my path gave me the strength and motivation to create the life I live today.
At the time, being unexpectedly financially responsible at 19 was one of the worst things that ever happened to me.
I didn’t know how I would pay my own rent or buy food.
I can’t even say I felt confidently everything would work out okay.
But I’ve never been one to give up. It took 3-4 years, but now I feel like I’ve made it. (Get more deets about my story here.)
Without those obstacles, I would not have the life I do today.
I love my life today. I love my job, my passion project helping other women reach financial freedom, my friends, and my hobbies. I created the life I want for myself.
I am grateful for the journey that has led me here, obstacles and all.
Conclusion
Your money mindset influences your outcomes. Do you already share any of these 5 money mindsets of wealthy women?
Money matters because it makes your life better when you put it to work for you. It’s not always easy, especially when people gatekeep financial information that could help you get ahead.
That’s why it’s important to initiate conversations about money with people you trust.
In particular, discuss investing because until you learn how to put your money to work for you through investments, you are losing money to inflation.
Even though obstacles come along with any journey, overcoming them will give you the strength needed for what’s ahead.
Want to continue strengthening your money mindset? Join our free Wealthy Women Club, all genders welcome. Expect to hear from Wealthy Women in a weekly newsletter because it’s true you become more like the people you surround yourself with.
