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How My Money Mindset Changed Four Times and Helped Me Succeed

This article was written by in Wealth and Affluence. 4 comments.

Any self-help guru would agree that how you think about money shapes your behavior with money. If you want to improve your financial situation, whether to get out of debt or to reach financial independence, your relationship with money is the first thing that must change.

If you believe you will never be able to climb out of poverty, it’s going to be much more difficult to achieve that goal. Of course, there is much more than goes into reaching your financial goals than just thinking about money differently. One can’t wish oneself out of debt, even by wishing intensely. The proper mindset is just the first step, but offers no guarantee of success.

Additionally, changing a mindset that’s been around for decades — or generations, even — doesn’t just change overnight. It’s a lot simpler to consider a changed mindset the key to achieving financial goals than it is to actually believe that everything you’ve been taught about money is wrong.

My current financial situation bears little resemblance to my life ten, fifteen, and twenty years ago. I’ve progressed through five different phases of my life — so far — as delineated by my approach to money. Each time I changed my mindset, my life improved and my financial situation became more stable, but it’s unclear which came first.

As I look back, I can identify these five phases.

Money mindset phase one: ignorance. As a kid and young adult, money played almost no role in my life decisions. I decided to study music education because I was passionate about teaching music, and I decided to go into nonprofit because I wanted to help even more young people in the arts. I never met any resistance from my parents, but I also didn’t think about whether a career in nonprofit was something I could handle without making incredible sacrifices.

Before long, living on my own after college, my finances were in shambles. But I ignored all my problems, including speeding tickets I couldn’t afford to pay. My life snowballed out of control, and even though I had started to realize I was in serious financial trouble with an increasing load of debt, my life culminated in losing my apartment, my job, my car, and my girlfriend all within the span of about a month.

Money mindset phase two: saving money and getting out of debt are worthy goals. This rock bottom led to my first major mindset change. Moving back in with my dad for a few months, I needed to get myself going in the right direction.

  • I left the world of education and nonprofit and found myself a temp job at a financial firm, accessible by public transportation, and began earning more money than in the nonprofit.
  • I began reading more about living below your means on the Motley Fool discussion boards.
  • I created a basic outline for a budget and started tracking my finances every day.
  • I started Consumerism Commentary to anonymous publish my financial progress and to keep myself accountable for my financial decisions.

I was finally saving for my future, investing for retirement, and focusing on better goals for myself. The mindset during this period was about making smart financial decisions and figuring out how to slowly build wealth over the long-term.

During this time, I also started focusing more on finding other ways to earn money. With a long history on the internet and having learned how to design and publish websites in 1994, I found ways to supplement my day-job income.

This would have been fine. Had I stayed in this position and mindset, I probably would be able to live comfortably, even if I would never have a sizable nest-egg, and even if I would never be able to live off my investments alone.

Money mindset phase three: I can build something of value. When I started Consumerism Commentary, I had all ready been blogging and operating websites for years. I had never considered the idea that websites could make money or be viable businesses on their own. The thought of being a “full-time blogger” would have seemed ridiculous at the time.

Before long, it became clear that there was a possibility of building a business out of all the time I was spending writing. Advertisers were interested in reaching the audience I had built, and these companies willing to pay for the privilege. Slowly, I started dabbling with advertising, while always maintaining some kind of ethical guidelines, so I wouldn’t feel too dirty at a time when very few people were earning money.

As the business progressed, I could see that there was a possibility that I wouldn’t have to rely on working forever in order to afford my living expenses. The business kept growing, and not only did I have cash flow, almost all of which was saved in bank and investing accounts, but I was building an asset that might have value to someone else, as well.

At no time throughout my life has money actually been a driving force behind how I live my life. I didn’t start writing online because I wanted to get rich. I didn’t want to sell my business (which I did in 2011) because I had dollar signs in my eyes. Being wealthy has never been a goal for me — but I’ve always liked the idea of never having to worry about whether I can afford something that I’d like to do.

Money mindset phase four: hold onto your assets. I’ve had a few bad experiences as a result of success. And part of this fourth phase still sticks with me today. During this period, as my cash flow from business revenue grew and I sold the business, I was concerned my assets could either disappear suddenly or they could dry up over time.

I did very little to change my lifestyle, and I was during this phase still trying to save as much as possible for the future. While I could have afforded it, I had no interest in buying fancy things or traveling the world. This is a scarcity mindset, but at this point in my life, I should have been past this.

I’m still not fully beyond money mindset phase four.

Money mindset phase five: abundancy. Through a combination of luck and hard work for over a decade, I’m currently in a financial situation that I never thought would apply to me. Until this year, I’ve been reluctant to touch my investments, and at times I still think I’d rather work for a paycheck than dip into my nest egg to pay for my living expenses.

At some point, I just have to start enjoying my success rather than worrying about whether I’ve written enough articles for Consumerism Commentary each month. But this is hard for me. There is more I want to do, both here and with new projects. I want to keep working. I want to build another company. I’m not ready to retire, so I need to keep going in some form.

A friend of mine who married an heir of at least part of a significant family fortune in New Jersey, someone I’d known since starting at that temp job after I lost my nonprofit job, has been trying to get me to live fully in this fifth phase, but I’m just not there yet.

And perhaps one of the reasons I can’t do this is that I am still concerned about cash flow. Invested mostly in stock market index funds and bond index funds, my cash flow is much less significant than it was while I was building my business, even if it is much less risky.

I need to think about how I can set something up to create a stronger cash flow from my investments — and that’s the type of thinking that often leads people to real estate investments. I doubt I could ever create another website that generated as much revenue as this one did.

So real estate is something I’ll be keeping in mind, but I don’t know if I have the right mindset for it.

Published or updated February 12, 2015. If you enjoyed this article, subscribe to the RSS feed or receive daily emails. Follow @ConsumerismComm on Twitter and visit our Facebook page for more updates.

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About the author

Luke Landes is the founder of Consumerism Commentary. He has been blogging and writing for the internet since 1995 and has been building online communities since 1991. Find out more about Luke Landes and follow him on Twitter. View all articles by .

{ 4 comments… read them below or add one }

avatar 1 Anonymous

Good stuff Luke. Appreciate your continued sharing of your financial experiences.
Personally I’m at the phase of trying to convert from a growth orientated investment portfolio to more focused on cash flow and capital preservation. Stock market doesn’t seem so great for that. Real estate was the way I achieved well over 1M+ net worth, but fairly low cashflow (in my market). I currently bought into some private equity funds, as well as experimenting with originating mortgages. And now considering transitioning more out of the stock market into these asset classes..
I’ve found that getting to a decent net worth has a different skillset than generating good cashflow/return on capital.

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avatar 2 Luke Landes


Thanks for the interesting insight. What is involved with originating mortgages? Are you using your own assets for lending, or are you a third-party between a funding source/bank/investors and a borrower?

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avatar 3 Anonymous

I’m using my own cash.. Sold a property and seller financed. Now using more cash to lend to a fix and flipper. 10-12% return for fairly low risk and effort. But do risk non-payment of course.

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avatar 4 Anonymous

Thanks for breaking this down, Luke! I’m between steps 2 and 3 – working my way out of debt, but knowing that I can build something of value. Eventually, I’ll finish pouring my heart onto paper about my rock bottom experience and post it on my blog for all to see. It’s scary to think about (which is probably why you rarely see those awful times being fully detailed haha), so I appreciate your synopsis of that tough time.

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