Financial Beliefs that are holding you back

"What you think, you become. What you feel, you attract. What you imagine, you create." ~ Buddha

Today, I want to address the financial beliefs that might be holding you back. I’ve compiled a subset of common beliefs that I’ve encountered in my coaching practice, though of course there will be many more.

The idea is not to dissect absolutely everything and anything in one single article. The idea is to show you how you can work with your own thinking, and potentially unblock it.

? Please, I invite you to share any beliefs that you feel might be limiting you (DM me your questions and I will be creating more content around the patterns that I see).

Here’s a coaching question for you:

?? What belief is holding you back right now?

Here are some limiting Money beliefs that can come up:

1. Rules are limiting me: you feel that rules imposed on you restrict your freedom. You believe that rules serve as limitations and that creates a feeling of frustration.

2. Math is boring: you struggle to engage with financial concepts because you find math uninteresting.

3. Discipline is hard: Maintaining discipline can be challenging for many, impacting their financial habits and decisions.

4. Investment is hard: There is often a lack of understanding about how to approach investing, making it seem difficult.

5. I don't want to wait for a perfect future state, I want to allow myself what I want right now! Indulging in the present rather than waiting for a future scenario where one can afford to spoil themselves.

6. I want that dream state, but I don’t know how to get there: You want a desirable future, but you are uncertain about the path to achieve it.

7. It’s too late to start investing: Some believe that starting to invest later in life is no longer worthwhile.

8. The debt is choking me: Feeling overwhelmed by debt can be a significant barrier to financial progress.

9. Money is evil: A belief that money is inherently bad or corrupt.

10. Money is non-spiritual: The notion that making a lot of money is somehow non-spiritual or contradicts personal values.

So, here I want to discuss some fundamentals and principles. We’ll be integrating new mental models into your financial intelligence system. We’ll also examine the existing elements and beliefs, and explore how we can frame them effectively.

Let's begin.

Fundamental Principle Number 1: Our behaviour is driven by emotions.

This is a must to understand if you want to create transformation in your life.

For most people, personal transformation is such a challenge because their emotions control their minds.

It doesn't have to be your life.

You can train your mind to control your emotions.

Understand this:

• emotions drive behaviour
• thoughts generate emotions
• if you want to change your behaviour, you need to change the core thoughts that create the emotional state (core beliefs).

Today, we’ll be discussing various programs and mental models that can either be installed or upgraded to facilitate this behaviour change.

1. Mental Model: You will create money once you truly want money.

This is a fundamental principle of reality creation.

You create something in your life when not having it is no longer an option for you—when it becomes non-negotiable.

This principle applies to every aspect of reality.

For example:

• You will achieve a fit body when being unfit is no longer an option for you.
• You will find a partner when being single is no longer an option for you.
• Likewise, you will become single when being in a toxic relationship is no longer acceptable.

In the same way, you will create money when not having it is no longer an option for you.

Note, that this process cannot be forced.

You can't adopt a belief like "I must want money" or "I have to have money" and hope to make it work. One needs to have a genuine desire for it. You cannot artificially evoke this desire; it must be authentic and deeply felt.

This is where coaching comes into play—as a coach, my job is to help you reconstruct these narratives and desires, ensuring that your intentions align with your fundamental beliefs and goals.

2. Reframing: "Rules are limiting me".

Let’s talk about those rules.

I understand that many people have a strong aversion to rules due to past experiences. These experiences might come from previous partners, family, or other influences like school or society.

It’s natural and completely understandable to resist external imposition.

However, it’s important to recognize that external imposition is different from internal imposition. Can you really call it "imposition" when it is internal? Maybe we can call it an internal setting.

Why don't we consider reframing the concept of rules?

Instead of calling them "rules," find a term that resonates with you. Here are some suggestions:

• Systems
• Traditions
• Guiding principles
• Rituals

Try adopting one of these terms for yourself.

For instance, call them “my financial rituals,” and observe if this changes your inner experience.

Close your eyes and see if you notice a shift.

Experiment. Consider using terms like “my personal financial philosophy” or “my codex” and see how your mind responds to that.

The key is to choose a term that doesn’t trigger a negative reaction but instead reduces the pressure and makes it feel more acceptable.

Try to understand the nature of your avoidance. Why are you running from rules? If you don’t address it, you’ll continue to avoid it.

By simply choosing another language to describe your experience you will change your experience, and eventually process your limiting belief by taking first small steps.

3: Get crystal clear on your vision.

One reason you might be ineffective in creating money is a lack of clarity about what exactly you are creating.

For instance, you might have a vague vision of owning a villa in Spain, enjoying espresso in the mornings on your beautiful veranda, and not working for anyone. You might desire money to come effortlessly through passive income.

(Note, even passive income still requires some investment of time - you will have to manage the financial systems that generate revenue).

A lack of specificity can be a major blocker in turning your vision into reality. To overcome this, you need to crystallize your vision, get as specific as possible, and then reverse engineer it to your current state. Here’s how:

1. Your vision becomes goals.
2. Your goals become projects.
3. Your projects become systems.
4. Your systems become your destiny.

This process is the essence of manifestation.

Here are some coaching questions for you to reflect on:

1. Net Worth: What is the net worth you must have to generate enough passive income? If you had an asset portfolio that would do that for you, what would it look like? (e.g. if you extract 4% from your 1M fund without damaging it, that's 40k a year)

2. Timeline: What is your timeline for achieving this Vision? (What game are you playing? 15? 20? 30 years?)

3. Lifestyle: What is your ultimate lifestyle (location, day-to-day life)? How can you reverse-engineer your ultimate lifestyle and maybe even integrate some elements of it into today?

3. Financial Needs: How much money do you need, adjusted for inflation, to support yourself per year? What is the desired annual/monthly income?

4. Minimum Viable Version of your Lifestyle: What is the minimum viable version of your desired lifestyle? (I’m not suggesting a luxurious life. I invite you to think about a version where you don’t need to work for anyone and can live comfortably).

Building Towards Your Vision: Reverse engineer these numbers and create a financial model for your current situation. This exercise will be particularly relevant if we address the next belief.

5. Reframing: "Math is boring."

For some people, math may not come naturally, and it might seem dull (I am one of them, so I am speaking from experience.)

However, we can reframe this belief.

Instead of viewing math as boring, think of it as a tool for creating your future.

Creating your future is exciting. Math is merely an instrument.

A big blocker could be just thinking that you need to become a math guru to manage money. In reality, sophisticated math is not required. You need only basic operations: addition, subtraction, multiplication, and division. There’s no need for advanced formulas. ChatGPT can do everything for you now. The skill that you really need is prompting. If you can ask questions effectively and with clarity, you will get all the math you need (and more).

The key is to shift your focus from math and focus on the Vision. Your Future Life will inspire and motivate you, fueling your actions in the present.

6. Reframing: "Investment is hard."

I used to think this myself, especially since I started investing so late in my life. However, once I learned the fundamentals, I realized it’s much simpler than it seemed. In fact, watching your investment grow is just as much fun as watching paint dry.

? Disclaimer: This is not financial advice. I have a financial coach, and if you’re interested, I can refer you to them. Please reach out if you’d like more personalized guidance.        

Understanding Investments:

I have absorbed a lot of mental models about investment philosophy from Morgan Housel, author of Psychology of Money and Same as Ever. His work is very insightful.

One of the best models he shared was that essentially, investment advice varies because different people are playing different games with different time horizons. It’s crucial to understand your own time horizon, risk tolerance, and investment objectives. (Hence, the disclaimer).

My strategy is not to go after "get-rich-quick" schemes. I’m playing a long-term game with a time horizon of 30 to 35 years, which defines how I play this game.

Investment Vehicles in Canada:

1. RRSP (Registered Retirement Savings Plan): This is an automated investment vehicle. If your organization offers an RRSP program, make sure to leverage it. Match whatever your employer offers, and let it grow. Your RRSP contribution room expands annually based on your income, so it’s wise to maximize this vehicle.

Strategy: If you receive a bonus, consider contributing it to your RRSP. I learned the hard way that cashing out your bonus leads to around 50% in taxes. Putting your bonus into an RRSP allows you to defer taxes. Your current high income means high taxes, but if you contribute to an RRSP, you can withdraw it when your income (and taxes) are lower (when you are old and ready to retire).

2. FHSA (First Home Savings Account): This program, launched a few years ago, is for those who plan to become first-time home buyers in Canada. You can contribute up to $8,000 per year, with a total contribution limit of $40,000 over five years. Contribute annually and let the money grow until you decide to buy a home or continue letting it compound.

3. TFSA (Tax-Free Savings Account): This is your primary investment vehicle for long-term growth. Use it to invest any excess cash and build wealth over time.

Some great resources for further education on RRSP, FHSA, TFSA:

• https://www.youtube.com/@stephandden
• Wealth Hacks. Financial Freedom for Every Canadian - Russel Roy.
• My finance coach (DM me for an intro)

The strategy?

I can't tell you what to do. I can only tell you what I do. And what I do is very simple:

• I open these accounts with a broker firm e.g. Wealthsimple or Questrade Financial Group
• I send extra cash I have there from my bank accounts (it is as easy as an e-transfer)
• I buy Vanguard low-index funds (easy! 5 clicks on a mobile app)
• I forget about this money for 30 years (don't mess around with it. just let it compound)

I am not a financial guru nor I am pretending to be. My approach is informed by what I learned from my personal finance coach.

Don't listen to anyone what will work for you must be designed for your life.

Never underestimate the Principle of Compounding.

Warren Buffet accumulated 99% of his net worth after turning 50. Think about it. The guy has been investing since he was 11.

7. Mental model: Treat Your Investments as a Fixed Expense.

This mental model was a game-changer for me.

The key idea is to treat your investments as a non-negotiable expense, similar to your other fixed expenses like rent or mortgage, car payments, or food.

Just like you allocate money for these essential expenses, you should allocate a certain amount for investments.

Think of it as paying your future self.

Every dollar invested today might be seen as taking away freedom from your current self, but it also can be seen as buying more time for your future Self. Focus on that.

Each deposit into your investment account is buying you one day of Freedom.

Tactical Steps:

1. Automation: Modern banking applications offer automatic transfer functions. Similar to how RRSP contributions can be automatically deducted, set up a system where a portion of your income is automatically transferred to your investment account. This ensures consistent investing without requiring manual intervention. Make it easy.

2. Manual Savings: If you feel disciplined enough, practice manual savings. Every time you receive your salary, set aside a predetermined percentage for investments. Calculate this amount based on your financial situation and make the transfer to your investment account. This is a less easy approach but it builds good financial habits - delayed gratification.

The $10,000 invested today with a modest 6% growth rate will grow to approximately $42,918.71 in 25 years.

But you won't invest just 10k over 25 years, right? :)

Compounding is psychologically counter-intuitive. So as time itself.

8. Reframing: "I don't want to wait for a perfect future state, I want to allow myself what I want right now!"

If you feel the urge to enjoy life and spend money now rather than waiting for a future where you can "spoil yourself," consider the approach advocated by Ramit Sethi, financial expert and the author of I Will Teach You to Be Rich.

Sethi introduces the idea of a "Guilt-Free Spending Account" as a key mental model.

This involves dividing your income into 4 buckets:

1. Fixed Costs: Covers your essential living costs.
2. Investments: Paying Future Self
3. Savings: Emergency Fund
4. Guilt-Free Spending Account: Funds the things that enhance your quality of life.

What is the thinking process to allocate money in those buckets?

Ramit introduces 50/20/30 and 70/20/10 budget rules:

The 50/20/30 rule is a budget guideline that states 50% of your after-tax income should go towards commitments and obligatory expenses. Then 20% on savings and debt repayments and the remaining 30% on everything else.?

The 70/20/10 states that 70% should go towards expenses, 20% on savings, and 10% on giving.?

Here is the original article .

Honestly, all these rules are just prescriptions.

Chances are, the generalized approach will make no sense to you personally. Do you know how I know?

→ It makes no sense to me.

You have to design a system for your individual situation, your ambition, your lifestyle.

There is only so much you can do with a fixed amount of money, especially in cities that have a high cost of living.

My approach (do NOT consider it a prescription either) would be different:

• Increase your intelligence and the normal things that the majority of the population chases will no longer satisfy you.
• Increase your self-awareness to gain absolute clarity on the things that truly bring you joy and the things that are there in a hopeless attempt to fill the void

• You are limited in what you can do with your fixed income. Refocus your mind on how to generate more wealth.

This approach is not about following some guidelines of a financial guru. This is about reprogramming your mind. Taking what no longer works and eliminating it, installing new beliefs that lead to money.

9. Define What a Rich Life Means to You.

This is also Ramit Sethi. He introduces the concept of a "rich life".

Define what a Rich Life means to YOU. Not to your neighbour, not to your friends, not to society (whatever you think society is).

For some, Rich Life is about luxury hotels, high-end clothing, or expensive cars. The world will impose false values on you. Find what is true to you.

Example: My rich life is not about luxury items but about the experiences and values I prioritize:

1. Books: I never hesitate to spend money on books that I feel I need to read. I find a book I want to read - I buy it. Your life experience is the experience inside your mind. The more you have in the fridge the more you can cook.

2. Wellness: Investing in my health and well-being is a priority. This includes massages, yoga, fitness, retreats, etc. Life experience is the experience inside your body. What is the body that will allow you to receive the Ultimate Human Experience?

3. Personal growth: coaching, training, business enablement, automation tools. I invest quickly in things that will save my time, let me operate at a higher level, or make me a more advanced thinker. Your business of one is only as strong as your mind. The limitations of your business are the reflections of the limitations of your mind.

Exercise: Start by identifying your core values .

Your Values will serve as a compass that points you toward what is truly important to you. 100 years from now we all will be dead and forgotten. Focus on creating rich experiences rather than accumulating material possessions. What is your Personal Version of the Ultimate Human Experience?

Coaching Questions for Self-reflection:

• What does a rich life mean to you personally?
• How do your core values shape your definition of a Rich Life?
• What experiences make you truly feel that your life is full and meaningful?

?? I invite you to allocate time and reflect on this. Seriously.

10. Mental model: Discipline = Freedom

The first principle here: one has to face the Truth.

An honest question that requires an honest answer:

? Can you get to your Desired Future Vision without Discipline?

The way you answer this question is the key to everything people want in life: a fit body, amazing relationships, career, money, personal growth, and deep spiritual understanding.

If you don't like the word Discipline, I invite you to reframe it. Consider gamifying your journey.

What if life is a game where you are the main character?

As you progress, challenges (or “levels”) become more complex. Your goal is to overcome these challenges and unlock new levels.

Gamification Approach:

• Levels and Challenges: Just like in a game, each stage of your financial journey presents new challenges. The beliefs that worked in one stage may not work in the next. Once in a while, you will have a Big Hairy Boss at the end of the level. Maybe it could be a limiting belief that is holding you back blocking you from advancing to the next one.
• Rewards: Set rewards for yourself when you reach certain financial milestones. For example, if you achieve a specific goal, you might reward yourself with a vacation or another treat.
• Game of Life: Life is a single-player game happening within your mind. Your mind is your Operating System. You literally use your mind to operate in this reality. Your success depends on how accurate your Map of Reality is. Most challenges that people experience in life are a result of a conflict between the map of reality and how the world actually works.

Coaching Questions for Self-reflection:

• How can you fool your mind and make discipline something that the mind sees as a positive?
• What milestones and rewards will keep you committed to the behaviour that will eventually lead you to your Vision?
• What is your definition of a "great life"? How can you calibrate your current system to integrate the elements of your great life into your present day-to-day?

Discipline is hard. But doing hard things makes life easy. Easy choices → Hard life.

11. Reframing: Personal Finances as a Game

Now, we will use the same gamification approach to money-making.

If you think about it, at the end of the day, managing money is not rocket science. ????

It comes down to 2 things:

1. Spend Less Than You Earn.

2. Earn More Than You Spend.

In this game here are some foundational principles to consider:

Detaching Output from Input: In a traditional job, your earnings are often tied to the hours you work. And unless you are a contractor who bills for their time, you won't get paid more for putting in more hours. Understand this.

Implication? You need to find ways to detach your income from the number of hours you work. How?

• You build a business.

A business where:

• You charge more per hour.
• You have created automated money-making vehicles (assets that generate money)
• You apply leverage (capital, human capital, code, media)

We all have 24 hours a day.

What we do with our time - that's what matters.

Hack Your Job: No one said you need to work 9 to 5. You are on the job to produce results. If you are not currently in ROWE (Results-Oriented Work Environment) ask yourself if you have injected yourself in the right ecosystem. In an environment where your incentive is not results but clocking in and clocking out, naturally, your behaviour will be shifted towards simply filling the time.

Efficiency and Skill Enhancement: Focus on the ways to master your craft. As your skill increases, you must become more efficient. Delegate, automate, eliminate. Not everything is worth doing. By reducing the time spent on repetitive or low-value tasks, you will free up time and energy for other income-generating activities.

Side Hustle: Use the time saved from optimizing your job to build additional income streams. This could involve freelance work, coaching, consulting, building digital assets, small business, or other entrepreneurial activities that create more money.

Questions for Self-reflection:

• How can you gamify your financial growth?
• How can you detach your input from your output (your income from the number of hours you work?)
• How can you optimize your day job to unlock side hustle opportunities?
• What is your aspirational rate $ / hour?
• What does the world need?

12. Create your own Game and play it on your terms

1. Commitment and Sacrifice. The question I want you to reflect on is: Are you willing to invest your free time and alter your lifestyle to create additional income streams? Are you prepared to put in the effort required to achieve your financial goals? Making money is like building muscle. It's heavy lifting. It's hard work. Truth is - not everyone will make it. Not everyone is cut out for this work too. It takes grit. It takes resilience.

2. The Pain of Inaction vs. Action: What might seem like a sacrifice can be viewed as a new lifestyle. The question is: What is your Fun? Again, working out is painful but it is either the pain of getting stronger or the pain of knowing that your body is now what you want it to be. Money is the same. Building additional income streams will be painful - but it is either a pain of building wealth or a pain of knowing that you will never hit your financial goals. What choose you?

3. Money-Making as a Game: Each step forward in your financial journey is like progressing through levels in a game. As you improve, you reach new milestones and get closer to your vision. If you see the effort required as part of an exciting game, where each level achieved brings you closer to your goals, you’ll be more motivated to keep pushing forward. Embrace the process of learning and growth as integral parts of the game.

Questions to Reflect On:

• Are you willing to put in work to create additional income streams?
• How can you reframe the pain of making money as part of your personal growth?
• What aspects of your financial journey excite you, and how can you integrate this excitement into each level of the game?

Levels of the Financial Game

Level 1: Eliminate Debt

If you are in the hole, the first thing you have to do is stop digging. Assess the extent of your debt and devise a plan to tackle it systematically.

Create a plan to pay off debts, starting with the highest interest rates or smallest amounts to build momentum. Avoid accruing new debt while you’re working on this.

Level 2: Establish a Measurement System

If you don't measure it, you don't control it.

Use a simple budgeting app or tool to monitor your financial inflows and outflows. Record every transaction to start identifying patterns and areas for improvement.

Money Manager App - this is the one I use and love (and I have tested dozens of apps before).

Level 3: Analyze Spending Patterns

Goal: Understand and evaluate your spending habits. What expenses truly bring value and joy? What expenses you can cut back?

Review your spending data. Focus on essential expenses and discretionary spending. Aim to adjust your habits based on what you learn.

Level 4: Budgeting Basics

Develop a basic budget to manage your finances better. This involves understanding your essential expenses and planning for savings.

Start by creating a simple budget that covers your absolute necessities and allocates a small amount for savings, even if it's just $10 or $20 a month. The key is consistency. It is about building a habit and training your financial muscle at first, not the dollar amount.

Level 5: Build Consistency

Goal: Establish consistent financial habits, similar to maintaining a workout routine. Regular small efforts can lead to significant progress over time.

Action: Commit to tracking your finances regularly and sticking to your budget. The consistency in your financial practices will compound into long-term improvements.

And so on...

Building wealth is an Infinite Game with infinite levels.

No matter how much money you have there will always be someone who makes more but is also not the idea of the game.

The idea of the game is to live a wealthy life, rich life. And that doesn't always mean having the most money.

A rich person is not the one who has a lot. A rich person is the one who has enough. What that means specifically to you is a function of your self-awareness.

Coaching Questions to Reflect On:

• What steps need to be taken to address and eliminate your debt?
• How are you currently tracking and measuring your financial activities?
• What patterns have you identified in your spending, and how can you calibrate?
• What essential expenses do you need to cover, and how can you start putting money aside, even in small amounts?
• If there was a system, which would enable you to be consistent in your good financial habits, what would it look like?
• What is your definition of a Rich Person?

13. Reframe: Money is evil

Money is neutral. There is no plus sign or minus sign in front of it.

Money is an amplifier.

It simply makes more of what you already are.

If there is evil within you, if there is greed and shallow tastes that seek empty consolation, then that's what the mind money will do. It will just make more of it.

There are people who use their money for good, for solving problems. Their inherent desire to serve others is just simply amplified. They can serve other people better at a larger scale using the leverage of capital.

"Money is evil" - is just a belief. And what you believe in, you manifest.

14. Reframe: Money is non-spiritual

Money is non-spiritual. Well, this belief is personal for me so I thought I'd share it.

For a very long time, I have been blocked by this belief. It was just this programming sitting at the back of my mind and I thought that somehow making money does not align with true spirituality.

• A truly spiritual person doesn't care about material things.
• True spirituality doesn't need to be rewarded, doesn't chase for goals.
• True spirituality is detachment.
• True spirituality is selfless service.

All these thoughts have created that feeling that I don't need the money, I don't want the money. And if you don't need it and you don't want the money, how would you manifest it?

Impossible.

This is how I worked through this belief:

I realized that in the very same way, as with the belief "money is evil" there is no plus or minus sign in front of money.

Money is not spiritual, or unspiritual. Money is what you make it to be.

It just manifests more of who you are.

If there is spirituality in you, money will help you to do more of it.

What would you do if you could make a lot of money? How would you use it to manifest your spirituality?

It would help you to liberate time, to create a business that sends your message to the world. In the world sinking in senseless noise, money enables you to say something of substance. At scale.

Think about it, how many non-spiritual businesses are out there? Well, a lot.

And if you refuse to step up, if you refuse to build a business that has spirituality as its core value, the business that is grounded in kindness, goodness, compassion, and service to others, then what you do is you're not just not stopping the evil, you are supporting it by not intervening. You are enabling the businesses that are not so ethical in their practices.

If you have the skills and knowledge the tools to spread the light, it becomes your responsibility.

Darkness prevails when those who can carry the light choose to remain inactive. But true spirituality is not abandoning humanity and hiding somewhere in a cave, meditating alone, sitting on a rock. True spirituality is being with people, guiding them, helping them, and serving them. Helping them to become their best versions of themselves for the people they love, their communities.

And by all means, don't think I get lost in my own story. I understand that this is all just another narrative but because this narrative has changed, money started to flow to me.

Coaching has changed my life.

And I get to change lives through coaching.

15. Last words

I just want to summarize really quickly what we talked here about.

Life is what you make it. What you believe in - you manifest.

You create money when you create your money mindset.

You create your money mindset in the process of creating money.

It's a loop. Just like anything in life.

Thoughts create Experience. Experience breeds new thoughts.

And just like with anything in life the problem here is obvious - we have problems with money when we get stuck in our own thinking.

So this is what I do in coaching. With my clients, we reprogram the mind.

In the dialogical coaching space, we co-construct a new reality - a reality of new possibilities, new functional beliefs, and demolishing the old mental constructs that might be preventing you from manifesting your wealth.

What we did together today was just a one-way conversation, but hopefully, it gives you a glimpse into the coaching process:

• We identified dysfunctional beliefs
• We deconstructed them to find where the flaw in logic is
• We construct an alternative functional belief that has more robust logic as a foundation
• We're going into the world to practice our new belief and confirm it from experience if our new belief is indeed functional
• And it will be functional because we manifest everything we believe in. Reality simply confirms our thinking.
• You become your thoughts.

P.S.

?? What limiting beliefs are stopping you from living your Rich Life?

Leave a comment below.

I would love to hear from you.