Poverty Is a Mindset
How changing your thoughts can change your life in amazing ways.
When I was growing up, I often heard the words, “We can’t afford that.” It became a regular phrase in my household, a natural response whenever something seemed out of reach.
Singapore, in the 1960s and 1970s, was a developing country. We weren’t wealthy by any means. My dad had to work hard to feed our family of seven. We never ate out or went on holiday. We had no sofa, no television or telephone until I was about 10. We had no toys, and everything I wore was hand-me-downs.
When I was in my teens, one day, my (wealthy) aunty said something that left a strong impression on me. “You all shouldn’t keep saying that you’re poor. If you keep saying you can’t afford things, you will remain poor.”
Her words struck me. My immediate thoughts were, “What do you know about being poor? My uncle was born with a silver spoon in his mouth. He had a car when he was a teenager! Being the youngest, he had a privileged life!”
But looking back, I understand what she meant. Could it be that the more we say we’re poor, the more we trap ourselves in that belief? Could it be that the words we use and the thoughts we have are shaping our reality in ways we don’t even realise?
It turns out they do. This is the essence of the poverty mindset, and it’s something that goes beyond what you have. It’s a belief that can limit us throughout our lives. While it’s true that money plays a role in how we live, how we think about money is equally important.
Rich vs. Poor Mindset
There’s a theory that explains why some people, even after losing everything, can bounce back quickly, while others, even if they come into wealth, end up losing it all. It boils down to the individual mindset.
I watched a video recently. In the video, the narrator asks, “What if we took all the wealth from the wealthiest and gave it to the poor?” He said that the amazing thing is that the wealthy will make their money back in a relatively short time. And those poor who received the money will lose everything in a few short years and return to where they were.
Wealthy individuals have an abundance mindset. Even if they experience setbacks, such as bankruptcy, they understand that money is a renewable resource. They believe in their ability to make more, and this belief enables them to take risks, find opportunities, and rebuild what they’ve lost. Their wealth is in their mindset.
People who have a poverty mindset often carry an underlying belief that no matter what they do, they’ll always struggle. They blame their upbringing, the government, the system, and society. Their lives will improve if everything else changes.
This mindset tells them that wealth is something for “other people,” and even if they were to suddenly come into a large sum of money, they probably wouldn’t know how to manage it.
That’s why we hear stories of lottery winners who end up with nothing within a few years because they haven’t developed the mindset or habits necessary to sustain wealth. It is ironic that while my wealthy aunt remains relatively wealthy after the divorce with my “silver spoon” uncle, he died a destitute in a foreign land after a series of bad choices.
The story of Malcolm
This is a true story.
I have a friend who previously built a very successful chain of optical shops in Singapore. We were classmates, and he was one of the more successful people in our class.
At the peak of his career, he had opened a dozen shops and doing very well. This success attracted a large investor who wanted to take the business to new heights. The plan was to open a chain of 100 shops in 5 years. Little did he know that these investors were predators with the intention of taking over.
The large infusion of funds led to his diluting his equity in the company as debts accumulated. Because of how the investor structured the partnership, he was unable to match their investment and had to relinquish shares in the business. Eventually, they bought him out, and he lost everything.
He told me that on that day, after settling with the lawyers, he only had $25 in his wallet.
Over the next few weeks, he did something remarkable.
Because of the shops he previously owned and his excellent reputation as a client, he had good relationships with several suppliers.
First, he found an old shop in an old housing estate that was vacant for a while. He asked the landlord if he would rent it to him, on credit, for 6 months. He just needed time to build up some cash flow to pay rent, and will pay as soon as he can. The landlord agreed.
Next, he approached the interior design company that had done most of the renovations for his shops previously and asked them for help. They say they have some old display cabinets and furniture in storage that were taking up space, and that he could have them for free. It will help them save on the cost of disposal.
Then, he approached his suppliers to stock up. They have a batch of spectacle frames that were outdated, and said he could have them for free or very little, and on an assignment. He only needed to pay when he sold them.
With a long-time optician employee, he set up a small shop in a less wealthy neighbourhood that sold very affordable spectacles. He targeted students and retirees. After several weeks, his small shop gained traction. He was surviving and making a modest profit.
The turning point came when the main flagship store in the previous business became available. The mall’s landlord was unhappy with the investors who took over the company and subsequently ended the lease. They approached Malcolm and asked if he was interested in taking over the store. This was the most profitable store in the entire chain. He jumped at the opportunity.
Today, he runs a big shop in an industrial warehouse supplying several hundred optical stores in Singapore.
The poverty mindset isn’t just about money. It affects how we perceive our potential, opportunities, and lives. It creates a sense of helplessness, a belief that no matter what we do, we can’t escape our circumstances. However, here’s the thing: we can change our circumstances by changing the way we think.
Breaking Free from the Poverty Mindset
I wish I could say that I completely overcame the poverty mindset after my aunt’s advice. But it’s something I still struggle with, even after years of self-reflection and effort. Often, I catch myself saying to my children, “We can’t afford that,” or “That’s not possible for us.”
And every time I think those thoughts, I feel the limits tighten around me and possibilities narrow.
But those times when I break free from those mental chains, those are the moments of growth and surprise. I wrote about it in The Secret of the Secret, if you’d like to read more about it. When I push past the belief that something isn’t possible, I often achieve more than I ever thought I could.
For example, there was a time when I thought owning a home in Australia was out of reach. My single income was then insufficient to finance a house in Adelaide. As a renter, I live in constant fear of being on the streets with my wife and young children.
Homeownership seemed like a distant dream. However, when we explored the possibility and took the necessary steps to make it happen, I was surprised at how everything fell into place. It wasn’t easy, but it was possible. Without this change in mindset, we would not have built our home and eventually put together a modest portfolio of properties for retirement. It is possible.
Art of the Possible
One of the most limiting aspects of the poverty mindset is that it forces us to focus on what is impossible. It whispers that certain opportunities are out of reach and that achievements are reserved for others.
This mindset trains us to see roadblocks instead of pathways, and once we believe something is impossible, our brain naturally stops looking for ways to make it happen.
But our beliefs shape our reality. When we limit our thinking, we narrow the scope of our potential. This mindset traps us in a box, convincing us we can’t break free. But what if we challenged those beliefs? What if, instead of seeing the world in terms of limitations, we saw it through the lens of possibilities?
The “Art of the Possible” is the ability to imagine, despite your current circumstances, what is possible for you. It’s about opening up to the idea that the life you dream of is within your reach if you’re willing to change the way you think about it.
This shift happens when you ask yourself, “What if?”
What if I could buy that house or start that business?
What if I could make more money?
What if my current circumstances are not permanent and can get better?
These questions are powerful because they change the script. They invite your mind to find answers, solutions, and opportunities. Once you believe that something might be possible, you are far more likely to take action toward making it a reality. You move from a mindset of helplessness and scarcity to one of empowerment and abundance.
Think about it this way: If you tell yourself, “I can’t do this,” or “I’ll never do that,” your brain will accept those as facts and won’t try looking for change. But if you switch your thinking to, “How can I do this?” or “What steps can I take to move closer to that?” suddenly, doors open.
This isn’t blind optimism or denying the realities you face. It’s about recognising that challenges exist but choosing to believe that they are not insurmountable. The Art of the Possible is seeing potential in every situation, no matter how bleak it may seem at first. It’s about acknowledging the difficulties while still holding on to the belief that something better can happen.
This encourages you to take risks, step outside your comfort zone, and try things differently. And with each minor success, your belief in what’s possible grows. It’s a cycle of possibility: the more you believe, the more you act, and the more you achieve.
Manifestation: The Power of Imagination
One of the most powerful ways to break free from the poverty mindset is through manifestation. This is not dreaming or just hoping that things will happen. It is about actively changing your thoughts and beliefs to align with the outcomes you want to achieve.
Manifestation is seeing the possibilities and visualising the outcome that you want to achieve. It’s about believing that what you want is within reach and then taking intentional steps to achieve it.
People with a poverty mindset often feel helpless. They believe that no matter what they do, their circumstances will stay the same. This sense of helplessness prevents them from taking risks or seeking new opportunities, as they believe it won’t make a difference.
But when you shift to a mindset of abundance and possibility, something inside you changes. You see opportunities where you once saw obstacles. You take actions that align with your goals rather than staying stuck in a cycle of inaction and defeat.
Practical Steps for Shifting Your Mindset
So, how do you shift from a poverty mindset to one of abundance and possibility? Here are a few practical steps that have helped me on my journey:
1. Change Your Language
Words matter. So start by changing the words you use. Instead of saying, “I can’t afford that,” say, “How can I afford that?” This simple shift in language opens your mind to new possibilities. It moves you from a place of helplessness to a place of problem-solving.
This is especially relevant in today’s housing crisis, where younger people say they can never afford a house. Don’t decide too early that this is your reality. Start by thinking about how. You might be surprised to learn that there are options that can put you on the path towards homeownership.
2. Challenge Your Beliefs
When you catch yourself thinking, “That’s impossible,” ask yourself, “Is it? How are others doing it?” Most of the time, the limits we place on ourselves are arbitrary. By challenging your beliefs, you can gain new perspectives on approaching your challenges.
3. Focus on What You Can Control
While it’s true that many aspects of life are beyond our control, such as government policies, the economy, or even the circumstances of our upbringing, there are also many things that we can influence. Focus on those. Whether it’s learning a new skill, budgeting your finances, or improving your mindset, take action on the things within your control.
4. Visualise Your Success
Visualise the success you want to achieve. Imagine yourself living the life you desire and feel the emotions that come with it. This practice trains your mind to believe that success is possible, and it helps align your actions with your goals.
5. Celebrate Small Wins
One reason people stay stuck in a poverty mindset is that they don’t see their progress. Celebrate the small wins along the way. Each step forward, no matter how small, is a sign that you’re moving in the right direction.
Your Mindset Is Your Most Powerful Asset
Ultimately, the biggest limitation we face is the one we place on ourselves through our thoughts. The poverty mindset is a deeply ingrained belief system that can be hard to break, but it’s not impossible. By shifting our thoughts, changing our language, and focusing on possibilities instead of limitations, we can create a new reality for ourselves.
I’m still on this journey myself. I still catch myself falling into old patterns of thinking, but I’m learning from them. And each time I break through those mental barriers, I surprise myself with what’s possible.
If there’s one thing I’ve learned, it’s this: you are limited by what you think you are. Change your thoughts, and you can change your life and your future.
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