Scarcity vs Abundance Mindset – Which Do You Have?
The Scarcity vs Abundance Mindset
I recently attended Mark and Tamiel Kenney’s Think Multifamily Fire Summit event in Dallas and was able to connect with some really great, forward thinking people.
As a side note, it was also fun watching LSU play Texas with a bunch of rowdy Texas fans (including The Real Estate Physician), especially since us Tiger fans came out on top. 🙂
During the event, Mark discussed several factors that were involved with anyone that was interested in investing in real estate.
I was surprised that the #1 factor had to do with our mindset. Basically, we have to BELIEVE that we can do something before we even start the process. Interesting.
There’s not a week that goes by where I don’t stress the importance of having the correct “mindset” with my kids.
Usually they’re stressed out about something that is out of their control such as something another kid has said about them. I tell them, “Don’t worry about what you can’t control. It’s out of your hands. But what you can do is control how you RESPOND to the situation.”
Think about it. You use your mindset daily when you’re dealing with stress, learning different ways to become MORE successful in life and even when deciding on if a certain situation you’re in is bringing you happiness.
Regarding happiness, it starts from the inside-out but most think it’s the other way around. They think it’s what life brings them but it’s more about our mindset on how to handle it.
This reminds me of the story of Paul while he was in prison. Think about it. Here’s a guy that’s locked up and chained to a cell because he chose to follow Jesus.
Despite what seemed like a series of setbacks, the sufferings Paul faced actually advanced the gospel—and for this reason, Paul was joyful.
Would you feel joy or happiness in prison? I know I wouldn’t but yet Paul did simply because he had the correct mindset.
Understanding and practicing this principle is life-changing.
So where did all of this scarcity vs abundance mindset stuff come from anyway?
Let’s find out….
Scarcity vs Abundance Mindset – Stephen Covey
We can thank the late Stephen Covey for coining the terms the “scarcity mindset/mentality” and the “abundance mindset/mentality” in his book, The 7 Habits of Highly Effective People.
In it, he states that most of us have one of two mindsets; they either see life through the lens of scarcity or abundance.
He also explains that when you live in a world of scarcity, you’re constantly competing for available resources, even when they are abundantly available.
Let’s take a closer look at both of these mindsets and see how they can affect us.
The Scarcity Mindset
Here’s Covey’s take on the scarcity mindset:
“Most people are deeply scripted in what I call the Scarcity Mentality. They see life as having only so much, as though there were only one pie out there. And if someone were to get a big piece of the pie, it would mean less for everybody else.”
“The Scarcity Mentality is the zero-sum paradigm of life. People with a Scarcity Mentality have a very difficult time sharing recognition and credit, power or profit – even with those who help in the production. They also have a very hard time being genuinely happy for the success of other people.”
A perfect example of this type of mentality is with one of my employees. I’ve been trying to get her to invest in our practice’s retirement plan for over ten years but she refuses due to her fear of losing money. She’s afraid of the stock market and would rather keep her money in a safe instead.
When you have this type of mentality, all decision-making is based on the false notion that there isn’t anything else coming your way. Or that there’s no more money out there to be made other than what’s already in their paycheck.
Principle of Influence
When there’s less of something, we want it more. People tend to have a harder time dealing with the thought of losing something over the prospect of gaining something. This concept is also known as “loss aversion.”
Scarcity and Wealth
One of the biggest factors that can affect those with a scarcity mindset involves wealth. I’ll admit, I used to have this type of mentality partly from how we were raised.
Growing up, we were always being told, “that’s too expensive” or “we can’t afford that.”
Maybe those words eventually sank in so we believed that we were always going to be lacking in the money category.
Several years after making a decent income, this mindset kept me focused only on keeping what I had and NOT on any new opportunities available.
I believe that this “fear” was holding me back which kept me from becoming an entrepreneur in my early 30’s. I was reluctant to go out and take chances on something that I wanted to pursue because I felt that investing a small amount of money could increase my fear even more. Especially if I lost it as I may have needed it for an unexpected bill.
This is not the place I want myself or kids to be in.
Other Scarcity Thoughts
- They must hoard resources because there’s only a certain amount to go around.
- Have an extreme fear of change.
- Will only help others ONLY if they receive something in return.
- Tend to not share information with others as they feel it will only help their competition.
- They fear risk which keeps them from progressing to bigger and better opportunities in life.
As you can probably tell, those with this type of mindset are all about serving their interests ONLY no matter the cost.
Here’s Stephen Covey’s take on the abundance mindset:
“The Abundance Mentality, on the other hand, flows out of a deep inner sense of personal worth and security. It is the paradigm that there is plenty out there and enough to spare for everybody. It results in sharing of prestige, of recognition, of profits, of decision making. It opens possibilities, options, alternatives, and creativity.“
How many times have you heard someone say, “Man I can’t wait to get X. And when I do, I’m going to be so much happier.” This is another example of someone with a scarcity vs abundance mindset.
On the other hand, those with an abundance mentality are able to focus more on the long-term. They realize that just because you don’t have something NOW doesn’t mean you can’t get it later.
For example, someone who doesn’t have a million dollars NOW, doesn’t mean they can’t have it later. They realize the opportunities are unlimited and to always keep an open mind.
In general, those with this type of mentality are generally happier people. Helping others is seen as the way to get ahead, not only for themselves but for their peers as well. It’s not ONLY about themselves.
The Doctor Mindset
I think most of us aren’t set up to go through life with an abundance mindset. Especially those of us that go to medical/dental school. Competition can be fierce.
Think back to your undergrad years and all of the stress involved of applying to medical/dental school. Remember those days? One of the criteria that I looked for when applying to all of the different dental schools was both cost of the program and how many students applied and how many get accepted.
At the time, the LSU School of Dentistry was only accepting 55 students and close to 1,000 applications were received the year I applied.
I knew, even during high school, that there were only going to be so many spots available in dental school. Being in the cutthroat world we live in, I knew I had to do my best to try to beat others that were also applying. It is what it is….
Come to think of it, this maybe another reason why I had a scarcity mindset. During most of my schooling years, I knew that I was always competing for a limited number of positions both during dental school and then my residency. Being in abundance wasn’t on my radar at the time.
As someone that had a scarcity mentality in the past, I found it hard to ever imagine myself as being financially free. After learning about investing and what it takes to get out of debt, there’s really no excuse for anyone (no matter their profession) not being able to reach financial freedom.
If you’re right out of training, some of the things that maybe on your mind are:
- High student loan debt
- Not making as much as you thought you’d initially make
- You MUST buy a house
As doctors, I feel that we make enough money to overcome all of these obstacles and more. Why? Take a look at our income vs the rest of the country:
- Median household income in the U.S. is $65,000
- Average physician income is close to $300,000
- Average dentist income is roughly $225,000
Typically both medical and dental specialists make more than their general practice colleagues which is even more reason that we should be able to reach financial independence….but we must change the scarcity mentality.
If you want to reach financial freedom, it’s much easier to do it while learning and sharing ideas with others. The scarcity mindset is all about oneself and doesn’t like to collaborate.
I remember when I first started this blog, I thought I could do all of the writing, promoting, interviewing, etc without help from others. Boy was I wrong. I had to remember that collaboration was the key. It’s also the key to becoming financially free as “the rising tide lifts all boats.” In the end, everyone wins.
By having an abundant mindset, it helps you stay more open to different ideas and opportunities available to help you down the road to success. When I first started investing, I was only focused on investing in index funds only. Had I not kept an open mind, I would have never began to invest in passive real estate.
How To Shift From A Scarcity Mindset To An Abundant Mindset
If you’re still with me, then hopefully you now realize how much more prosperous having an abundance mindset will cause you to be.
Here’s 5 ways you can shift to an abundant mindset:
1) Practice gratitude and generosity
“It is more blessed to give than to receive.” (Acts 20:35)
Oprah Winfrey once said, “If you look at what you have in life, you’ll always have more. If you look at what you don’t have in life, you’ll never have enough.”
Psychologists have found that it’s next to impossible to feel sad or have fear and be grateful simultaneously. Literally any self-help/improvement book teaches that being appreciative and gracious is one of the best methods to improve one’s overall well-being.
The picture is of a Sudanese girl who collapsed on her way to get food with a lurking vulture in the background. If this image doesn’t make you appreciate every meal you receive than I don’t know what would.
This is one area of our life that we stress daily when praying with our kids, “give thanks for everything you have, no matter how small or meaningless they seem.”
2) Hang out with abundant-minded people
Good friends bring out the best in you. “As iron sharpens iron, so a man sharpens the countenance of his friend” (Proverbs 27:17)
Have you ever noticed your attitude and outlook on life when you’re around others that also have an abundant mindset? These are the “glass is half-full” and not “glass is half-empty people.”
Either join or create a community with these types of people in order to continue to better yourself.
3) Share with others
The late Zig Ziglar once said, “You will get all you want in life, if you help enough other people get what they want.”
Remember, those with a scarcity mindset are less reluctant to share with others for fear of missing out. They think that since everything is limited (money), then sharing information will hurt them in the long run.
This couldn’t be any further from the truth. Working with and sharing with others makes you feel good about yourself as one of the basic needs we have as humans is that of community – being connected with others.
Something else you’ll notice that goes along with Zig’s quote is that when you share regularly, people are very willing to share right back with you. When you give others what they want, they will in return, give you what you want as well. I’m not just talking about material things such as money or possessions. This is also sharing of your time and knowledge that you have that can help people around you.
Just this morning I had a call with a dentist from Iowa that was interested in possibly passively investing in some of our real estate deals. After hearing his situation, I felt it best that he focus on cleaning up some of his debt before he consider real estate. He appreciated that I’d be open and honest with him and he was also appreciative that I shared my time and knowledge with him.
I remember all of the other people in my life that took the time to do the same for me so opportunities like this enable me to do the same.
4) Look for the “good” in losses
I can almost guarantee that everyone that is reading this right now has had some type of loss or set back in the past.
As the great philosopher Rocky Balboa told his son, “It’s NOT how hard you hit, but how hard you can get hit and keep moving forward.”
When life knocks you down, the scarcity mindset kicks in telling you that life ain’t fair and everyone else is better/luckier than you.
These so-called better or luckier people have had the same set backs as everyone else. I wouldn’t be where I am today if it weren’t for all of the losses I’ve had. When you hit a rough patch, look for the positives that are coming out of the situation.
When one door closes, many others open.
5) Stop comparing yourselves to the “Joneses”
When you have a scarcity mentality, you tend to compare yourself to others and attempt to keep up with the Joneses.
I heard Dave Ramsey once tell a caller to stop trying to keep up with the Joneses because they’re broke too!
With an abundance mindset, what matters most is how you compare to yourself. You should try to do the best you can each day.
I routinely ask my kids after their ball games how they think they played. As long as they felt that they did their best, I’m happy and they should be too.
There’s ALWAYS going to be someone that’s faster, stronger, better looking (maybe:) ) smarter and wealthier than ourselves. If you don’t believe me, take a look at what people are posting on social media.
Many only put the positives going on in their life such as the luxury vacations they’re on or their job promotions. Most are going to avoid the bad and the ugly. If you think these people only experience ups in life and never any downs, then you’re going to naturally feel inadequate. It’s not a fair comparison.
We have to remain focused on doing our best and that should be good enough.
As doctors, it’s only natural to think about things with a scarcity mentality as we’ve always been focus on things that we felt have been limited.
But when we switch to having an abundance mindset, we’ll not only get to obtain everything we want in life, but we’ll also help others get what they’re aiming for too. It’s a perfect win-win situation.
“And God is able to bless you abundantly, so that in all things at all times, having all that you need, you will abound in every good work.” – 2 Corinthians 9:8