Wealth Building
Freedom from Stereotypes and Misconceptions
Most of us grew up in an environment with pervasive misconceptions about money. Families tend to treat children as separate, different and in other ways that make the topic of finances difficult, even though money plays an essential role in adult life. There is also a common belief in our culture that girls and women, in particular, don’t have to worry about money as much as their brothers and fathers do. Young girls are encouraged to marry someone with money from the outset in books, tv ads and shows, movies and recess conversations. Barbara Stanny Huson debunks this myth in her outstanding book, Prince Charming Isn’t Coming.
The truth is that believing that someone or something outside of you will save or rescue you can only lead to stress, anxiety and financial challenges. Being financially illiterate is a weakness that can spiral into many troubling decisions as an adult. Unfortunately, most traditional financial institutions and education cater to men. The good news is that the societal belief system around finances is changing, especially for women. The first steps are to take responsibility for your financial life, look for opportunities to educate yourself and surround yourself with people whose relationship with money you respect.
Financial Development
Problems with money aren’t necessarily about money. It’s usually about something much deeper, like an unmet need or a power issue. Let’s identify the stages of wealth:
Survival
Stability
Affluence
Everyone falls somewhere on the spectrum. You’ll find that many people you know, including most Americans, are in survival mode. This phase is typified by chronic debt, impulsive spending, low credit scores and living paycheck to paycheck. People in survival mode usually have ambivalence about money. They frequently claim not to like money and thus, don’t like people that have money.
Individuals in survival mode are almost always underearners, which means they’re earning less than they need or want. Even people making six figures can be in this category if they are coming up short on a regular basis. You’ll find many women underearners because they tend to give their skills and knowledge away for free or bargain prices. Their time and abilities are worth so much more, but they lack the self-esteem to promote it.
In addition, women are more susceptible to codependency: prioritizing the needs of others before their own. They can even help strangers in need first, before themselves. Lastly, women don’t want to be uncomfortable. Life is hard enough. However, building wealth requires a willingness to go outside of your comfort zone and explore your financial options.
To get to the next stage, financial stability, you need a profit motive. Investopedia defines profit motive as “an individual's drive to undertake activities that will yield net economic gain. Because of the profit motive, people are induced to invent, innovate, and take risks that they may not otherwise pursue.” Rather than just getting by or letting someone do it for them, people in this phase start to build and sustain multiple levels of savings and experience flexibility with their money.
When you start integrating true affluence into your daily existence, net profit is no longer the focus. Income is still meaningful and part of the process, but in this stage, money is no longer a distraction or a source of stress. Affluence isn’t only about achieving large bank account balances or an expansive investment portfolio. Wealth is about bridging the gap between your lifestyle and how much money you have. Being wealthy means that you have more than enough to meet your needs, and your money grows faster than inflation. Money becomes a tool, an ally, that helps you live your best life.
Interestingly, there are people with millions in the bank who still feel like they’re in survival mode. This can be a result of “big T” or “little t” trauma, current or past financial enmeshment (enabling or dependence) or a myriad of other money disorders.
Money Mindset
Women generally respond to finances differently than men. Where men see the market as a challenge, women see it more as a threat. For many women, it’s fear that holds us back, and we can’t process the information. For example, when people start talking about the stock market, I literally become temporarily deaf and my hearing goes out. When I attempt to read something financial, my eyes glaze over and I just can’t concentrate long enough to finish an article. Forget internalizing or integrating the information. I’ve since learned my reactions are a trauma response and it’s something I have to continuously work on. Being aware creates an opening for overcoming blocks around money. Money consciousness expedites the learning curve and deactivates the patterned response holding you back from realizing your full financial potential.
Our mindset and related behavior are typically based on our brain’s default mode or past experiences. We need to change the way we’re thinking so we can modify our activities. Mindfulness is one way to harness our natural power and reach our goals. There are three steps to begin rewiring your brain:
Recognize: Observe the negative thought and separate yourself from it.
Reframe: See the thought from a new angle. Change your interpretation of the situation from fear to opportunity.
Respond: Take a different action.
A New Perspective
Building wealth is simple when you have a foundation of knowledge, integrity and inspiration as well as a support network. I know one of the best decisions I ever made was telling the truth to one of my friends about money. One day, I decided to be vulnerable about how much I was earning, how much I really wanted to be earning and what my questions were. She was the first official member of my financial support team and it exponentially deepened our friendship. I’ve made many mistakes along the way, but I’ve learned a lot and always try to find new ways to expand and improve things in my financial life. Many women who dare to learn about finances find the courage to continue discussing, pursuing and sharing it. We are the lucky ones.