Last Updated on 2021-09-23
Before we dive into the “Fixed Mindset vs Growth Mindset” topic, let’s check out this little story about values and paradox.
A rich businessman visited a small island for a vacation and he hired a fisherman to be his tour guide. After a few days of getting along, the businessman said to the fisherman:
“Why don’t you buy a new fishing boat so that you can catch more fish and make more money?”
The fisherman said, “What then?”
Businessman: “You can buy second and third fishing boats and have your own fleet if you save the money that you earn.”
“and then?” said the fisherman.
Businessman: “You have the capital to start a fish canning factory and sell the products all over the world.”
“and then?” said the fisherman.
Businessman: “Just like me, you can spend a leisurely vacation on this island once a while every year and enjoy your life.”
The fisherman replied to the Businessman :
“But, I’ve already spent my holidays on this island every day to enjoy my life?” After speaking, both of them were silent.
Finally, the businessman left a word:
“Maybe you think you can always spend your holidays on this island, but this kind of life is only a small part of me.”
How Much Money You Need To Be Happy
It is very true that you don’t have to possess a huge amount of wealth to be happy.
A wonderful date with your girlfriend/boyfriend can make you happy. Nice afternoon tea with friends and family can make you happy. A little chat/gossiping with your colleagues in the tea room can make you happy. It’s not rocket science to make ourselves happy.
Some people think that –
“I don’t need too much money and I’m doing just fine. Comfy and cozy.”
“Why do I have to bust my ass off?”
“Is it really worth spending so much time working and miss out on the moments I should enjoy?”
Just like the fisherman who thinks he has achieved the ideal life he wanted.
But this kind of life is only a small part of me.-The Businessman
It leads us to think differently. Meaning the life of the fisherman looks very satisfying but actually, he doesn’t have “OPTIONS”.
His income completely depends on the catch, once he stops working, then 0 income.
He doesn’t have any savings, it’s extremely difficult for him to leave the island.
He won’t be able to buy a new car or a new fishing boat.
He can’t provide for his kids to receive a better education.
If the environment changes, he might face a decrease in the catch and it would be hard to maintain the current lifestyle he had.
To be honest and cruel, the fisherman doesn’t have any strength to deal with the “RISKS” in his ideal cozy lifestyle.
How To Change And Have More Options
So how do we escape from the situation like the fisherman? How to change it and make us have more options and fewer risks?
To do that, let’s take a look at what scientists have told us. ( by the extensive research of Stanford psychologist Carol Dweck )
A Fixed Mindset :
The perspective of a Fixed Mindset is that intelligence and talent are attributes you are born with; they are fixed and permanent. There is no room for mistakes in any situation because mistakes are evidence of failure that prove you’re not really smart or talented after all. If you were, you would not have to work at it- whatever it is; having to make an effort is evidence of deficiency. And because each performance is seen to be an eternal measure of your ability, failure feels dangerous; it defines you forever.
You can see how fear of failure springs from the Fixed Mindset and leads, in turn, to procrastination. When things get hard, people with a Fixed Mindset retreat and lose interest. They don’t want to do anything that might prove their inadequacy – or, we would add, their unworthiness. Procrastination protects people from taking a risk that might result in failure, which from a Fixed Mindset perspective would be a life sentence of inadequacy.
A Growth Mindset :
The central belief in this mindset is that abilities can be developed; with hard work and effort, you can get smarter and better over time. In a Growth Mindset, effort is what makes you smart or good at something; it is what “ignites ability and turns it into accomplishment.” From this perspective, you don’t have to be good at something immediately. In fact, it’s more interesting to do things you’re not good at, because that’s a way to stretch yourself and to learn. People with a Growth Mindset don’t just seek challenges; they thrive on them. Failures may hurt or disappoint, but they don’t define a person. In fact, failure becomes a reason to redouble effort and work harder, rather than to give up, retreat, and … procrastinate.
Adopting the Growth Mindset is one way to undo the self-worth equation. Not only performance not reflect your value as a person, but performance is no longer a central concern! What matters is what you learn, what you feel excited about, and how you’ve improved, while outcome moves to the background. The definition of “ability” is no longer a fixed entity; it is something that can change and develop. There’s no longer anything to prove. As Dweck asks so compellingly, “Is success about learning – or proving you’re smart?”
A Fixed Mindset And A Growth Mindset Content Originated From The Book “Procrastination: Why You Do It, What to Do About It Now”
The Businessman already told us how to do it. Have a Growth Mindset, keep open-minded and willing to make changes, to learn, to put in the effort. And create passive income streams for ourselves in the long term.
Now let’s get back to the start and ask ourselves this question –
“If I’m doing just fine, should I put in the effort and work really hard to pursue my Financial Independence?”
There are times that we wanted to change but because the current status is not bad, we didn’t take any action. Should we fight hard, or should we stay stable? In fact, it only depends on how many choices and options we want to have.
Just BE HONEST with yourself.
How Much Money You Need To Retire/FIRE
Everybody has their own desired lifestyle. Only you know how much money you need every month to have a happy retirement life. According to the FIRE(Financial Independence Retire Early) movement, 4% is the magic annual ROI number.
One of my friends, he’s making 50,000 USD annually in New York and he’ll have after-tax 39,286 USD left to spend.
39,286 / 12 = 3,273 ⏩ This is his current living standard. Even NOT to consider inflation at all.
If he wants to have 3,273 USD at his disposal every month after retirement, then he gotta have AT LEAST an accumulated capital of 982,150 USD with the 4% rule.