Changing a few words can make you richer.
- Redefining the concept of a budget can help you build wealth.
- The word “budget” implies that you have to cut or limit your spending. Instead, you want to define it as allocating money for future purchases and goals.
- There are psychological differences between those who have wealth and those who do not.
What causes the stock market to fluctuate wildly? interest rate? federal budget? Company revenue? While these play an important role, market psychology or investor sentiment is one of the most important factors driving stock market moves. Emotions such as fear and greed have a major impact on the market on a daily basis.
Just like how psychology affects the movements of the stock market, psychology plays an important role in how we build and view our wealth. Psychologist and author Dr. Tracy Thomas has been mentoring celebrities, CEOs, professional athletes and other high performers for the past 12 years. According to Thomas, reframing our language can help us build wealth.
Redefine the concepts of saving and budgeting
Thomas said she doesn’t use the word “savings.” Why? She said the word means “taking away from what you really want to do at the moment. It’s not very attractive or glamorous.”
What word should you use? Instead of “saving” money, tell yourself that you are “building wealth” or “building wealth.” Rethinking and using the “language of wealth” can have a bigger impact, Thomas said.
She also suggested redefining “budget” as “allocation”. Budgeting means having to cut something out of your life or limit yourself. Instead, you want to define it as allocating money for future purchases and goals. Thomas said of her clients: “They don’t have a ‘budget’ for their money – it’s a scarcity mentality. They’re allocating or investing their resources. They’re allocating resources to some of their monthly entertainment; They’re investing in their wardrobes; they’re investing in their future lake house.”
How Language Affects Net Worth
Subtle language changes help facilitate financial decisions. Dr. James Grubman, a neuropsychologist and financial expert with more than 20 years of experience, points out that there are psychological differences between those who have wealth and those who do not. “What I’ve seen,” Grumman said, “is that the people who move from thinking about money in terms of income to thinking about money in terms of assets are the people who have successfully adapted and maintained their wealth.”
The words “income” and “asset” are very different. Income is a traffic word that means the flow and flow of money from one person to another. Asset, on the other hand, is a root word. It is concrete and material. The idea of spending assets triggers a stronger sense of loss than the idea of spending income. In addition, refactoring helps people better understand the source of income from assets.
Jane Cinsero, Author you’re a money-making badass, offers similar advice on how language affects how we think about money. Here are the common terms she says can hold people back and the terms they should use.
- “I think” is another way of saying “I lack”
- “I hope” is another way of saying “I have no control”
- “I need” is another way of saying “I lack”
- “I can not” Self-explanatory
- “I hope” imply that it may or may not happen
- “I should” hint that maybe you won’t or don’t want to
What language should we switch to? sincero suggests we replace them with:
- “I have”
- “I create”
- “I’m very grateful”
- “I like”
- “I can”
- “I choose”
These subtle changes in language and words may seem small, but they can make a big difference over time. It can help shift from a scarcity mindset to an abundance mindset. These psychological tips can help you save more money and change the way we think about wealth.
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