How I’m Adopting an Abundance Mindset (and Applying It to My Investing Strategy)

How I'm Adopting an Abundance Mindset (and Applying It to My Investing Strategy)

When I first decided to spend a month experimenting with slow money, my goal was simply to do a proper check-in with my finances. It had been years since I’d had any major financial goals to work towards, which I knew was only going to lead me down the road to nowhere. And even though I had maintained all my savings in my first 20 months of self-employment, I wasn’t happy with how much I was spending on my business and I hated feeling like all I was doing was staying afloat. So, I set a list of intentions and have spent the last four weeks crossing off every last one of them.

Experiment #2: Slow Money

Most of these were easy to tackle. I’ve done this exercise enough times to know what I value, which made setting new goals and finding ways to achieve them simple. However, when it came to changing my investing strategy, I struggled to get comfortable with implementing what I knew I wanted to do.

A few weeks ago, I gave you a peek into my head and talked about the mental block I’ve had when it comes to investing. Essentially, I’ve been reluctant to setup automatic savings programs, because I’m always worried I’ll run out of money and will need what I invested. This has resulted in me only making a few lump sum investments each year, and I haven’t been happy about it. There is nothing fun about being stuck in a scarcity mindset and constantly feeling like you’re going to run out of money. And sadly, many of the comments and emails I received from that post showed me I’m not alone.

When I first wrote that post, I thought this had only been an issue for me since I had become self-employed in 2015. With irregular income came irregular investments. But the more I thought about (and talked about it and journaled about it), I realized I have always had a scarcity complex about money.

Until I was 25, I was living paycheque-to-paycheque and trying to manage multiple debts. Most of the time, my money was gone within a week and I spent the next week living off credit while waiting for payday. From 25 to 27, I was still living paycheque-to-paycheque while paying down those debts. For the first year I was debt-free, I continued to mostly live paycheque-to-paycheque while saving just 5-10% of my income (when I was once putting up to 55% of my income towards debt repayment). And it wasn’t until I did the shopping ban that I learned I could live on less and save/invest/travel more.

But even after the success of the shopping ban, when I saved an average of 31% of my income, I hadn’t kicked my scarcity mindset to the curb. And now, even though I have access to more than $20,000 of cash at all times, I constantly feel like I’m living on the edge and could run out of money at any time. I’m not a psychologist and can’t pinpoint a specific reason for why I feel this way, but it’s probably safe to say that nearly 15 years of living paycheque-to-paycheque has something to do with it. (How I ever felt comfortable enough to quit my job with steady income is still an anomaly, at this point.)

Throughout the month of February, I found myself continually struggling to make financial decisions, because my scarcity mindset was always getting in the way – but never more so than when it came to implementing a new investing strategy. I knew what I wanted to do, but it took weeks to finally commit and put the plan in place. And as time went on, I realized my goal for this experiment was about so much more than just doing a check-in with my finances: it was to learn how to approach things from an abundance perspective, so I can stop acting out of fear and start believing I am in control of my future.

Here’s how I plan to adopt an abundance money mindset:

  1. Be grateful for what I have. (It’s more than I’ve ever had and it is enough.)
  2. Give wherever possible. (Like Jason Connell says, “Practicing generosity trains you to understand that you already have enough.”)
  3. Be open to new opportunities to earn more. (I’ve held some limiting beliefs about the kinds of work I can do for far too long.)
  4. Invest regularly and trust it will help me grow my net worth (not make me go broke).

Each of the four points in this list are important, but the last point is the one that requires the most work as well as the greatest mental shift for me personally. A couple months ago, I decided to move a chunk of my investments over to Wealthsimple. I had been using Tangerine’s Balanced Growth Portfolio and would recommend their funds to any beginner investor, but I wanted to reduce my fees and have a better understanding of the ETFs I was investing in. So, with the help of my new friend (and money coach) Ben Van Dyke, I made the switch. But I hesitated to setup auto-depositing…

I kept getting stuck in that same old mindset: the one where I worried that I would run out of money and regret investing any because I needed the cash. It wasn’t until I ran three different annual income scenarios and saw how much I needed to earn in order to invest a certain amount that I realized the probability of me earning enough to invest at least $5,000 was high. I also knew I had invested that amount or more every year for the past few years. I took this information and set it up so I’m now investing $100/week ($5,200/year) in my TFSA with Wealthsimple.

This is the first time I have ever setup an automatic savings program. I repeat: it’s the first time I have ever done this. It’s only been a few weeks, so it’s too early to know how I feel or even do a proper review of Wealthsimple. I will say, so far, I haven’t noticed the $100 disappear from my account each week (likely because I have income deposited numerous times throughout the month). And I am loving the transparency Wealthsimple offers. But this is still new for me. I do feel like I’m in control of my future. But the whole trusting that I won’t run out of money thing will take some getting used to.

Wealthsimple Review
This projection is based off my current plan of investing only $100/week.

Even though the slow money experiment is over, and I feel it was a huge success, I know I can’t fix my scarcity mindset issues overnight. Again, I’m sure there is more than one reason why they exist, but living paycheque-to-paycheque for nearly 15 years must have something to do with it. I know from quitting drinking and impulse shopping that it takes months (or longer) to change a bad habit you’ve spent years perfecting. But from those experiences, I have also learned it’s possible to change anything, when you set your mind to it. This is fixable. It won’t happen overnight, but it will happen.

Going forward, whenever I’m struggling to push past the scarcity and make a financial decision, I’ll run through the list of ways I plan to adopt an abundant money mindset. And if that doesn’t work, I’ll remind myself it’s been years since I’ve run out of money – and I am in control of my financial future.

How did your slow money experiment(s) go?

Extra Reading

  • I have to admit that the last point investing regularly is really difficult for me at times. With the market rising higher and higher in the US and with a Trump presidency I don’t quite understand how it has exploded. It seems like investments are getting super expensive and I don’t quite understand why. I mean I get that the market thinks that Trump is going to be business friendly but everyday the market shakes off bad news and continues to climb.

    But like you I am staying the course and investing every two weeks in my 401k and trusting the process. Hopefully we’ll be rewarded over time :)

    • Ha, I feel you re: wondering how things have gone up so much. But I’m also guessing we’ll see some dips in the future… but we can’t worry about that, if the money is for retirement. :)

  • I remember feeling the same way when we moved into our first house, I was hesitant to increase 401k contributions to get the full match because we were barely scraping by (and some months relying on a credit card or short term loan from my parents)

    Once we started automatic transfers and got used to the idea it got a lot easier to increase over time. That feeling still pops in every once in awhile, especially if we have an expensive month.

    • It’s actually really refreshing to hear you say that the feeling still pops in sometimes – it makes me feel like my concerns are normal! But it’s also better to hear that you felt this way and still setup your automatic deposits anyway. Thanks for sharing :)

  • Cait, congrats on an awesome 4 weeks of focus, fantastic that you were able to check off each goal! Automated savings is the ONLY way to go, I can guarantee you that you’ll look back on this step as something you’ll be glad you did!

    Thanks for living your life as an example for others. Do like Cait, and automate your investments!!

  • Investing regularly. Yes, Cait, that is the one that requires the most work, in more ways than might be obvious to many folks. Obviously you must have discipline and perseverance to keep doing it, in both good and bad economic times. You don’t necessarily have to invest the same amount regularly (since one’s situation may – and does – change at times) just so long as you invest some amount. That said, you also have to invest wisely – and that in itself if often hard because, let’s face it, money is emotional to everyone and emotion is often the reason that we make bad investment mistakes, like trying to time the market, for example. A fool’s game.

    Financial knowledge is important and I’m glad to see that you have help in managing your investing. I’m pretty conservative in my own investing, always have been, so ever since I first started out in earning money, I’ve tried to diversify and balance my investments, not just concentrating in Canadian but also in U.S. as well as International funds. Not just stock holdings, but also bond holdings. Investigating mutual funds, ETFs, RRSPs, TFSAs. Re-balancing holdings on a regular basis, as required. Being aware of MER management costs. They all played a part.

    I have to admit, being pretty risk adverse, my leanings have always been into more conservative investments but, that said, I still knew that I had to also consider in investing for some growth, especially in my younger days, not so much now that I’m older. Basically, we first have to know deep down our tolerance for risk because that will dictate the kind of investor that we will be. I know that I could have made more money over the years in more aggressive investing but I preferred to invest to get on first base rather than try for the home run – a slow and steady approach.

    The one important thing though to remember is that investing isn’t a short-term exercise but rather a long-term journey. There will be years (yes, years!) when the economy might be in recession and everyone’s investments are decreasing in value but that is the time to buy not sell (unless you really need to). As Warren Buffet knows that is the time when prices drop and bargains are to be found. Like they say, buy low – sell high (not the reverse, if you can absolutely help it). Investing does take some amount of nerve, objectivity, and the ability to control one’s emotions and insecurities. Being human, we all have these traits. We just need to find ways to control them long term.

    • Your comment made me think: it’s actually kind of interesting that I’m riskier with my investments (80% equities) and am totally comfortable with the fact that I’ll lose money sometimes… yet I’m terrified my cash will disappear, haha. I’m not scared about my investments fluctuating! I just don’t want to screw up my daily cash flow. Ohhh the psychology of it all!

      • Well you see this is quite normal for someone around your age. Being young you definitely should be looking for growth in your investments and that of course entails more risk over being super cautious and conservative in your investments. This works usually works out ok because you then have years ahead of you to catch up when your riskier investments might dip in value at times. Now as to day-to-day cash flow worries, my suggestion to handle that is to work on setting up a sufficient emergency buffer fund (remember that one?) – say enough funds to cover 3-4 months of normal living expenses. This will then ease your mind because you know it’s always available to dip into when income might at times dip. Of course you later would top it up again when income streams improve. If used correctly then there is absolutely less need to worry about “disappearing cash” as you call it. If you don’t have this already set up (which I figure you already do) then cut back on your investing contributions and dump any excess savings that you have into this fund first. Follow me?

  • I’m also an independent contractor and moving into to my first apartment solo (way back when) was a scary undertaking given that paychecks were scarce some months. So I did an experiment of my own to build an abundance attitude about money: For one year I documented all extra money, large and small increments, I received that didn’t come from paychecks – unexpected tips from clients, birthday money, rebates in the mail, belongings/clothes I sold.. all kinds of random avenues and at the end of year it was Thousands of dollars! Since then I’ve believed money is everywhere you look and quite easy to come by when your attitude is that of abundance.

    That lesson was reinforced when I had an emergency surgery and a massive medical bill to follow. I still had the same rent and bills as before, just more medical bills. But I paid everything as it came and eventually it was all paid off and I was living exactly as I had been prior – not living off of top ramen or scraping pennies to survive, not drowning in any debt. I genuinely believe money is there when you practice mindfulness and gratitude.

    I’m a “Power of Positivity” girl and it hasn’t failed me yet :) Hope this helps!

    • Wow, that’s a really neat exercise! I’m getting ready to move into a new apartment myself, and can relate to feeling a bit worried about the costs that will come with it. I might have to try this, to serve as a reminder that there is always more money out there :)

  • Congrats on the success with the slow money experiment! We’re still in the getting-out-of-debt leg of our journey, so we aren’t investing heavily quite yet. I do agree that it’s difficult to get out of the “lean” mindset and recognizing our own abundance. I’ve been trying to meditate daily to realize everything that I have is so wonderful.

    • I try not to think about money when I meditate… but “abundance” could be a great word to meditate to!

  • That’s brilliant Cait, everything you achieved with the slow money experiment and noticing the scarcity mindset. I think it’s a mindset that’s pretty prevalent today especially after the recession. It really took it’s toll here in Ireland. It’s hard to figure out what comes from the scarcity mindset or hard earned lessons that needed to be learnt during the recession. I think with my current money situation, I will find it hard to move away from that scarcity mindset for awhile, but it’s all about those little steps. I’m looking forward to reading the links. I totally agree with your strategy for an abundance mindset. I’m trying to be grateful for every bit of money that comes in and that might be even just finding 20 cent on the ground. Also, I find even if I am strapped for cash donating no matter how much of a small amount has some way of coming back full circle to me – it might not be in the way of money, but someone buying me something unexpected or other weird and wonderful ways. Best of look with your investment strategy it will really pay off in the long run. It’s something down the line I hope to look into myself. Looking forward to your next month of the slow experiment.

    • You’re so right about how giving comes back full circle, Sharon – and definitely not always in a monetary value but in other ways. Give what you can when you can, and the world will give back to you when you need it.

  • Interesting findings. I’m actually somewhat struggling with the opposite issue. For years we’ve done auto withdrawals. With the income drop from my wife becoming a stay at home mom I’m struggling to force myself to reduce auto withdrawals. It’s so ingrained that it’s just another bill I pay that it’s hard to bring myself to adjust it. First world problems I guess.

    • That still makes sense to me, though! It’s been a fixed value in your budget, and now it has to change and be more variable. Would be weird to adjust to.

  • Holy crap, YES!!! I too am trying to shift to more of an abundance mindset in my approach to earning (and managing) money. I have now set up 2x auto investing payments, it’s only $100 a month but even that was a huge leap for me.

    • That’s amazing! And yea, I won’t lie, $100/week felt scary… but it’s been about a month now and, so far, I haven’t felt like I’m going to run out of money or anything. I just keep telling myself that I don’t necessarily need the money now, but I WILL NEED it in my future (and that’s where it’s going).

  • I’ve never lived paycheck-to-paycheck, but I’ve always had this scarcity mindset too. The only thing that solved it for me was having a significant gap between what I was earning and what I was spending. For me, I think it’s related to the fact that I’m more of a short-term planner than a long-term planner. I work really well with short, specific goals, but vague long ones I tend to flake on. Now that I’m in grad school for this year, I’m convinced I’m going to never have an income again (because I currently don’t have one), which has somewhat re-introduced the scarcity mindset I thought I’d gotten rid of! This makes me worry I would have it in early retirement, so perhaps some buffer will be required there…

    • Ahhh yes, that makes sense! I think that’s when I felt “richest” too: during the shopping ban, when I was earning a decent income and only spending half of it. And I’m with you: definitely a short-term planner. I have zero long-term plans (except that I want money in the bank when I retire lol).

    • I’m like this, too! I struggle with the scarcity mindset, but seeing the difference between earnings and spending makes me feel better. And yes, I’m also a short-term planner. Go, team?

  • I think it’s great that you’re starting with just $100. I took the opposite route when I started contributing to my retirement funds. I had a couple good financial years and then decided to max out my auto contributions. On paper, it looked fine but in reality I hadn’t left enough buffer in my budget for all the unexpected expenses that come up which meant I began putting those things on a credit card. It wasn’t’ a good situation, and I let it go too long. Now I’ve canceled the auto contributions and need to sort out the mess before starting them up again. Next time, I’ll know better and start with a smaller amount before working my way up.

    I’m curious how retirement savings work in Canada. Do you guys have things like IRAs and 401(k)s or is there some other incentive for retirement savings?

    • Yep! We have RRSPs, which reduce your taxable income every year you contribute to it. :)

  • Very interesting to realize your have a scarcity mindset. I have definitely struggled with this after growing up in a large family with a tight budget. I also have let fear–of failure, more than running out of money–deter me from setting big financial goals. Fortunately my husband has helped talked me through this. I think your plan of sharing those struggles here is a great idea!

  • I’m also constantly afraid we’ll run out of money. It’s a very unhealthy mindset I’ve developed a few years back, when we were also living paycheck to paycheck and it was extremely difficult to get out of the debt circle.
    Now, I’m trying to look at the glass half full. I’m very grateful for what we’ve accomplished so far.

    I think once you stop looking at money as an opportunity to spend, and start treating your paycheck as an opportunity to save & invest for your future, everything changes. The mindset shift is unbelievable.

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