The Value of a Money Mindset

Our mindset is the lens through which we see the world. The right mindset can help us meet life’s challenges and learn new skills.  Conversely, the wrong mindset can make it more difficult to overcome obstacles and step outside our comfort zones.

When it comes to wealth management, research has shown that an investor’s mindset can have a real impact on performance:

  • A 2019 study from Vanguard found that behavioral coaching could add 1.50% in value to client portfolios.
  • A separate study compared the performance of the S&P 500 to the performance of equity fund investors between 1999 and 2019. During this 20-year period, the S&P 500 outperformed investors (on average) by nearly 2.00% each year. Researchers attributed this “performance gap” to emotional factors, such as attempting to time the market or selling during periods of volatility.1

Both of these studies fall under the field of behavioral finance, an area of research that tries to understand how human emotions and psychological factors can — and often do — impact investment outcomes.

As wealth managers, the technical aspects of financial management are important tools for helping us serve our clients. But our clients are more than their portfolios, and it’s just as important for us to understand, study, and apply behavioral finance best practices in our work.

What Drives Behavior?

“The intuitive mind is a sacred gift and the rational mind is a faithful servant.”

– Albert Einstein

It’s clear from the research that investor behavior can materially affect investment outcomes. This is common knowledge in the wealth management space, but what is less clear across the industry as a whole is what drives this investor behavior. But time and time again, evidence points to investor mindset as the key factor.

Our mindsets tend to be formed at a very young age. Once your money mindset has been formed, it’s unlikely to change on its own; in many cases, changing your mindset takes some effort. This is important because our money mindset may influence our current actions more than we’d care to admit.

In his book The Biology of Belief, biologist Bruce Lipton argues that the majority of our subconscious beliefs are formed before we reach age six. Furthermore, Lipton believes that we only operate from our conscious mind 5% of the time; therefore, 95% of the time, we are operating from our subconscious mind.2 If Lipton is correct, that means that the “blueprint” for our financial decisions today is based on beliefs that were formed before we started kindergarten!

Depending on the beliefs we formed as children, these blueprints could encourage us to visualize financial failure, struggle, or strife rather than visualizing financial success and prosperity. Research performed in other fields like sports psychology tells us that our visualization of outcomes can affect the actual outcomes themselves. There’s a good reason why top athletes like Michael Jordan, Russell Wilson, Kobe Bryant, and the U.S. Women’s soccer teams prioritize (or prioritized) mental coaching and positive visualization in their training.

So if our mindset has the power to drive our behavior, and our behavior can, in turn, affect financial outcomes, the big question is: how can we foster a positive money mindset that is conducive to financial success?

Developing a Positive Money Mindset

The following steps are valuable tools for developing a positive money mindset. Some of these steps can help you evaluate your current money mindset, while others are crucial to reshaping your mindset and your relationship with money.

1) Notice your internal dialogue when it comes to money

When you think about your investment portfolio or retirement plans, take a moment to assess your emotional response. Do you find yourself saying self-sabotaging statements such as “I’ll never be able to retire” or “I am not good at handling money”? A negative emotional response or negative self-talk could indicate a negative bias towards financial topics. Being aware of your internal dialogue around money can help you identify a bias, which in turn gives you the opportunity to refine and reshape the way you think about your finances.

2) Use positive thinking to counteract negative bias

If you find that your internal dialogue has a negative bias, make an effort to challenge those thoughts with positive thoughts or affirmations. When your negative bias leads you to think, “I’ll never feel comfortable in retirement,” remind yourself, “I have a team, a plan, and we are making progress.”

3) Forgive yourself for making money mistakes

Maybe you accumulated too much debt early in your career, or maybe you put too much money into an investment that didn’t pay off — whatever the case may be, forgive yourself. Everyone has made mistakes with money, and it’s important not to dwell on those mistakes. By viewing mistakes as an opportunity to learn and move forward, you can help ensure that your actions (or lack thereof) in the past don’t define your relationship with money in the present.

4) Define your long-term goals and visualize success

“I visualized where I wanted to be, what kind of player I wanted to become. I knew exactly where I wanted to go, and I focused on getting there.”

– Michael Jordan

As we’ve discussed in many other blog posts, it’s really important to define your long-term financial objectives and put them in writing. Once you have this goal in hand, spend time visualizing it coming to fruition. This might feel a bit silly at first, but there’s a reason why Michael Jordan was able to make the biggest shots when they counted the most: he worked with a mental performance coach and only ever visualized making game-winning shots, not missing them.

5) Utilize ideas and insight from thought leaders in behavioral finance

Over the years, we’ve read four particularly impactful books on this topic:

  • Picture Your Prosperity by Ellen Rogin and Lisa Kueng
  • Money Meditations for Women by Jo An Lordahl (this is a great book for anyone, not just women)
  • The Gratitude Formula by May McCarthy
  • Think & Grow Rich! by Napoleon Hill

If you’d like to do more reading on behavioral finance, money mindsets, or positive visualization, just let us know which one of these books you would like to read. We’ll be mailing a book to the first 20 people who reach out requesting one.

Closing Thoughts

Much of our work is focused on the more technical aspects of wealth management and investing, but in our experience, it’s just as important to support long-term financial success by helping people and organizations foster a money mindset. We hope this article gave you some ideas to consider as you think about your own relationship with money. If you’d like to continue this discussion, we invite you to connect with our team.

1 The Balance, Why Average Investors Earn Below Average Market Returns (Link)

2 Lipton, Bruce. The Biology of Belief

This article contains general information that is not suitable for everyone. The information contained herein should not be constructed as personalized investment advice. Past performance is no guarantee of future results. Reading or utilizing this information does not create an advisory relationship. An advisory relationship can be established only after the following two events have been completed (1) our thorough review with you of all the relevant facts pertaining to a potential engagement; and (2) the execution of a Client Advisory Agreement. There is no guarantee that the views and opinions expressed in this article will come to pass.  Investing in the stock market involves gains and losses and may not be suitable for all investors. Information presented herein is subject to change without notice and should not be considered as a solicitation to buy or sell any security.

Strategic Wealth Partners (‘SWP’) is an SEC registered investment advisor with its principal place of business in the State of Illinois. The brochure is limited to the dissemination of general information pertaining to its investment advisory services, views on the market, and investment philosophy. Any subsequent, direct communication by SWP with a prospective client shall be conducted by a representative that is either registered or qualifies for an exemption or exclusion from registration in the state where the prospective client resides. For information pertaining to the registration status of SWP, please contact SWP or refer to the Investment Advisor Public Disclosure website (

For additional information about SWP, including fees and services, send for our disclosure brochure as set forth on Form ADV from SWP using the contact information herein. Please read the disclosure brochure carefully before you invest or send money (

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