Abundance Mindset

TLDR: Investment dollars are abstract; adodpt an abundance mindset.

I was listening to a Ted Talk where the presenter was expressing the importance of understanding money in a real sense. He argued that it is critically important for children to understand the 'true' value of money while recommending giving your children an allowance with real cash, providing them the opportunity to not see money as an abstract number on a screen, but a real commodity.

The whole time I was thinking, this is great, people need to understand the reality of spending money and how that will affect their lives in the long run. I was waiting for him to say BUT... It never came. Anyway, it's great, but! And this is a big BUT. Ironically, in my opinion, the only way to achieve real wealth is by seeing money as a almost completely abstract. This is because, to become rich you need to take healthy monetary risk. Often this is very difficult for people as when they see their portfolio in the red and bad news on TV, they immediately sell.

When every dollar is treated as if it is your next meal, you don't have the freedom to take healthy risk. This makes you too careful with money and prone to never allowing it to exist in a volatile form (like a stock). This is what separates the rich from the poor: The rich are willing to risk massive amounts of capital, see the return, and do it again. Usually because their investments will never affect their day to day lives they are willing to do this, but you can too. This is the mindset I have adopted whilst being pre-rich and have already seen extremely healthy returns as a result.

Let me give an analogy: when you talk to a hot girl, the less you care, the more successful you usually are; the more women you sleep with, the more women want to sleep with you. Similarly, the less concerned with market volatility you are, the better you usually do over the long term. It doesn't mean that being stupid and reckless whilst investing, or talking to a woman for that matter, will get you anywhere, but with a mindset of abundance, you usually get much further. Not being concerned with day to day, week to week, or quarter to quarter movements is what allows for real wealth creation. How does this translate to real life? It means, after you have food on the table and roof over your head, you can take large calculated risks with what's left (not financial advice).

The guy that thinks he needs a magical opening line and the whole conversation planned out with presupposed topics, jokes, etc. is the guy who is day trading his portfolio into the ground because he sees red and sells like the rest of the herd. Conversely, the cool, calm, confident man who has an attitude of abundance and self worth, is the guy who has conviction in his investment decisions, still knowing there is real risk. He does not check his portfolio frantically every minute, hour, or day, he has made thought out, long term investment decisions. This does not mean they will always work out! Just because he has thought about it deeply does not make him right. It is the fact that he has confidence in his own decision making that allows him to continue despite failure or set back. You only have to be right a very small number of times in life to get wealthy. More on this topic.

What does this look like for me? If I had to start tomorrow with $0 in my trading account (a 100% loss), firstly, my emotions nor daily routine would change even a little bit. I have intentionally designed my life around my ability to assume maximal financial risk. Secondly, I would take all the lessons I have learned and apply them to my next move.

I have a great laugh when I chat to my mates about my investment strategy. When we look at the chart where I can point out a time I was down over 6 figures, I say, "look, I can be down 6 figures and still have made money hahaha". This was a time where I was down over 45% on my TSLA position. At the end of the day, I am able to completely separate the money I use to live and the money I use to invest. If my investment portfolio declines by 80%, so be it. I have conviction in my investment decisions and understand that the stock market is just a group of people shouting different prices at each other for the same thing. If I can purchase more of the same thing for 80% less, I see that as a win, not a loss. The money in my trading account is completely abstract and has no bearing on my day to day life. I have a mindset of abundance and an extremely high conviction in my investment decisions so I do not worry about any of my stock positions.