What’s keeping you from building wealth? Why do some people manage millions with ease while others struggle to save a few hundred dollars?
Your relationship with money goes deeper than your bank account balance. It’s rooted in your mindset, beliefs, and what experts call your “financial setpoint”—the amount of money you subconsciously believe you can handle.
Continue reading to explore why the poor stay poor and the rich stay rich.
Why the Poor Stay Poor and the Rich Stay Rich
In Secrets of the Millionaire Mind, T. Harv Eker suggests that the accumulated beliefs in your money mindset include a conclusion about the amount of money you trust yourself to manage effectively (we’ll refer to this as your “financial setpoint”). Your money mindset programs you to think and behave in specific ways that conform to your financial setpoint—even if you manage to earn or save money past your financial setpoint, you won’t be able to hold onto it for long. This is because your money mindset operates from the belief that you can’t handle the challenges that come with managing more money.
Eker explains that financial setpoints are why the poor stay poor and the rich stay rich. Different people can comfortably manage different amounts of money depending on their financial setpoint. Some people only feel comfortable managing small amounts of money, while others can comfortably manage millions of dollars.
Why Your Money Mindset Might Limit Your Financial Setpoint
According to Eker, if you struggle to earn or accumulate more money, it’s because you internalized disempowering beliefs that limit your financial setpoint.
In Psycho-Cybernetics, Maxwell Maltz provides psychological insight into why your money mindset might create a financial setpoint and counteract your attempts to surpass it. You developed limiting beliefs as a way to protect yourself from emotionally uncomfortable situations—the way you identified with the uncomfortable situation led you to feel unwanted negative emotions. You reacted by forming a conclusion about what led to this discomfort, and you made the decision to avoid similar situations and protect yourself from future discomfort. Your mind stored this decision as a belief. Even though you’re not conscious of this belief, it continues to impact your thoughts, feelings, and behaviors.
Example: Your parents worked hard for their money and rarely spent any money on themselves. Every time they had excess money, family members would ask for handouts. Your parents always gave their money to those who asked. Observing this, you resented your parents for working so hard and prioritizing the needs of others. You also resented all of the people who took advantage of your parents. These feelings of resentment led you to associate having money with being taken advantage of, and you decided that you would never let yourself get treated that way. This turned into a belief and created your financial setpoint: If you have over $X you’ll get taken advantage of, so it’s safer to never have more than that amount.
How Disempowering Beliefs Prevent You From Surpassing Your Financial Setpoint
We’ve just explained why you might have developed disempowering beliefs that limit your financial setpoint. Now, let’s explore three ways such beliefs prevent you from surpassing that limit and achieving financial success.
1) They make you feel like a victim: Eker argues that disempowering beliefs foster a victim mentality that prevents people from accepting complete responsibility for their financial situation. Because they don’t take responsibility for their finances, they overlook how their decisions and behaviors contribute to their situation. This lack of self-awareness traps them in an uncomfortable financial position because it inhibits them from learning from their mistakes and seizing potential opportunities. Over time, this impasse erodes their self-confidence, convincing them that they can’t improve their situation because they’re not good enough to earn or manage more money.
2) They make you rationalize your lack of money: Rachel Rodgers (We Should All Be Millionaires) makes a similar point that disempowering beliefs make people think that they can’t make or manage more money. She adds that they justify this belief by convincing themselves that money isn’t important to them, that making money requires a grueling grind, or that they’re simply not skilled with money. These justifications prevent them from making changes or trying new strategies to manage their wealth.
3) They make you feel guilty for wanting money: In You Are a Badass at Making Money, Jen Sincero says that disempowering beliefs about money make people think that money is bad, or that they must do bad things to have a lot of money. These thoughts make them feel immoral or guilty for having or wanting more money. As a result, they feel conflicted about pursuing wealth, which leads them to hesitate and miss out on financial opportunities.
