Money Mindsets: How Scarcity Vs Abundance Thinking Shapes Your Wealth Journey

Anthony: [: 00:00:00

Comes, I'm your co-host Anthony Pearl, and whether you're a successful business owner, executive, or a family seeking to align your wealth with your values, it's time to activate your wealth. David, talk to me about the idea of scarcity versus abundance in terms of an A mindset and how much of that is impacted by upbringing and other things, and how much we, you might even have to change that mindset as you're working through with it.

bly just to start with that, [: 00:01:00

They just see things. Look, the purchasing more stuff is wasteful. They're like, why? They know they can afford to do it, and they go, I just don't, I don't feel comfortable. I don't like to do it. I don't need these things. Do you know it's Bob. He buys them for me, but I wish he didn't. I do like them, but I'd, I wouldn't go and buy that for myself personally.

But if he chooses to give me a gift of something like that, I'm happy to accept it. But I wouldn't do that. And it's the same with the ones that spend, it's just trying to put that understanding where you do realize you're spending $40,000 a month. No, I'm not. Okay. We can see it. The banks. Accounts don't lie.

didn't think I was spending [: 00:02:00

And could you taper that a little bit? Well, maybe. And sometimes it's just an awareness factor, so it's more rather than. Changing that mindset, it's understanding it and then working with that individual to make them feel comfortable or to demonstrate to them, especially the ones where they're looking at and saying, oh, you know, money's always been typed and I know we've got it, but I just feel uncomfortable.

ng it will take you to spend [: 00:03:00

Now, again, some people go, yeah, but I just don't wanna do that. Okay. Again, we've just gotta work with people without saying that's what you have to do. I mean, there's always some occasion where you go, you've gotta stop spending. But that is also another hard habit for people to change. 'cause they're just used to spending, they just.

I don't always think about it. I go, we will be right. We'll be right. It'll be right. Right. And again, sometimes you, I mean, you can lead a horse to water, can't you? But you,

Anthony: I mean, how much do you see that then has an influence not just on other generations in the family, but also in the business that they're in?

Because, and that mindset in the way they approach their business, scarcity versus abundance can have an impact on how the business is functioning and how the people within the business are functioning.

t buying, reinvesting in the [: 00:04:00

Or the other side is, oh, there's, you know. 400 grand sitting in the bank account. Now I just need to buy a new car. So just, I'll just take, you know, a hundred grand outta that without sometimes the knowledge. It says no, but we've got PAYG super wages and we've gotta pay out a piece of equipment. I needed 385 of that to do all of those expenses.

You've now ripped a hundred grand out. I've gotta go find that from somewhere else. So it can be both sides that it sort of works in. Again, some people just won't, it doesn't, they've always functioned that way. The business has always sp out the cash and like, ah, we'll be right. But again, enterprise value when they've said, I wanna sell it in five to seven years.

've, than what they've been. [: 00:05:00

You could sell it now and it's worth this, but if you got a better bottom line, it could be worth twice as much. And so again, you're robbing Peter to pay. Paul, do you want to take it now or do you know, do you want a hundred grand out now or do you want a million bucks in four years? Some 'EM will go, no, I'll take the a hundred now.

Okay. But you, it's their money. It's their business. They can do what they want with it. But you know, again, they've come to you sometimes and you try to encourage 'em and they said, we need to do, we think we should look at this and this. Yeah, I don't wanna do that. Okay.

ately they think, well, that [: 00:06:00

That may not be the answer to it. It may also be, oh, we. They've wanted this piece of equipment and you just stop thinking about it in a way that can understand that, well, longer term it's gonna drive efficiencies and create more profits. And yes, it's a chunk of money now, but you can't afford it. But, and this is the long-term implication because they'd rather just go, oh no, we'll just we, this is the way we've always done it.

We're just gonna hang onto it. And you know, making people understand there's a different way of thinking in terms of their business as well.

David: Yeah. But most people are pretty good, to be honest. Most people when you lay it out and the accountant's there and you go, right, this is what it looks like if you continue down that particular path, they're like, oh, okay.

ve said. Gee, how, how could [: 00:07:00

And just, sometimes it's just not a lack of knowledge or desire, it's just that, you know, I just dunno. And so, you know, it's exciting to watch when you can, you know, offer some advice and people pull it together and they go, wow, this has been great. Like, we've seen our business improve and grow and. Now let's go to the next step.

And it just builds their confidence as, as they progress. I mean, you try and influence as much as you can, but in the end, people make their own decisions.

Anthony: Yeah, and and I'm interested as well though, when you talk about presenting all of these things and you talk, originally when we spoken an earlier podcast about.

ence do you see that has in, [: 00:08:00

David: Visually is fantastic because if you've got a, an entity structure that might be, have six or eight different entities, which a lot of businesses have, they'll have a company of a trust. They might have a self-managed super fund. They may have a corporate beneficiary, they may have some other trust structures set up for other investments, and so they're all legitimate.

Sometimes you kind of go, Hmm, do you need all of them? But sometimes the weaker of the two in the co in the couple arrangement, they don't understand why all of these entities are pulled together and they don't understand how there, there could be an entity that owns. You know, sometimes a piece of dirt might be owned partly by the super fund and partly by the, by a family trust.

in visual 'cause it makes it [: 00:09:00

We have it in front 'em, we say, right, we've gotta move this for this and this has gotta. And they go, okay, I'm starting to get it. And because it's in a single document, they can see it. It makes it much easier for them to recognize what we're talking about. And it just helps. And it's the same when we present the pathway through a certainty pathway document.

It's just visually moving them along because not everything can get done at once and we have to sequentially go through. But it's like an analogy we've said to people. Well, what we do is we tip the puzzle upside down. Through the conversation, we're turning the pieces over and we're starting to build the puzzle.

But sometimes someone will say, oh, but that piece at that's at the top of the table, that's what we need to do first, and part of our dialogue with 'EM is that, you know what? It's this piece that's right in front of you that actually needs to be addressed first, because that may then take out for the other pieces that we need to address.

y, but I wanna focus on that [: 00:10:00

It's like trying to build a two story house with no solid foundations. It's gonna sink eventually. And if you get bigger and your business is doing better and you put more, oh, then I go from a two story to a three story to a four story. Well, you haven't got your foundation set again. Your property's gonna fall over.

ring everyone on the journey.[: 00:11:00

Some people need the minute detail. Other people, and entrepreneurs, generally business owners like the high level. They don't want 75 pages. Just give it to me on a single sheet. Yep. I know what you mean. But if we are bringing in the partner on who's not the financial, sometimes you've just gotta bring them.

Along slowly, or we need to, we need to simplify the language that we're using and get away from jargon and acronyms, you know? And again, while we have lawyers, accountants in the room, we might then veer off and have a technical discussion in the meeting and we bring it back and go, right now what we said was this.

And they go, yeah, I get that.

and the business and that's [: 00:12:00

That's what they're great at, but the financials, it's not necessarily their thing.

David: Yes and no. I think there's always a bit of a combination in that, even though they've been on the tools, especially the ones that love to have purchased property, you know, they bought a property that the business is on, then they've bought some other stuff and, but then all of a sudden, I don't wanna talk about equities.

I'm like, well, why? Oh, well, because it always goes down. Okay. So property always goes up. Yeah, yeah, yeah. I bought it for this, I sold it for that. I'm like, you know, but let's, we've gotta take into account your, you know, on costs. Plus the maintenance, plus the all these. Oh, yeah, yeah, yeah. But that, but that.

No, no, but I bought it for this and sold it for that. I'm like, yeah, I know, but it's not a straight, you know, add and subtract. You gotta take into accounts and other stuff, and you can't always get a small lick out of that piece of real estate. Like it is an element of commitment. I'm saying I don't disagree with real estate, I love real estate, but sometimes you gotta get that spread, and that's education, but.

lp educate them a little bit [: 00:13:00

Anthony: Yeah, I mean, I wanna bring this full circle to where we started this part of the conversation, which was really abundance versus scarcity.

Yep. And when you're having that just conversation and you're looking at that it, it's not really a one versus the other. Is it? Sometimes no. Sometimes you need one, you need one, and then you need to steer back to the other.

David: Yeah. And it's head, it's, we've had the conversation a couple of times with a couple where one is, you know, they just, they're not spenders and the others is a spender, and their IES is like, I just, I feel uncomfortable that spending, but I love it when my partner says, no, Barbara, we're gonna do it.

And they go and spend it and they say, I just couldn't make that decision. But I love where they go to on this stuff. And it's on the other side as well. Oh, it's been good. I wanted to do this. But then I went home and. We had a bit more of a conversation around and like, well, have you thought about this and this?

n to spend that money at the [: 00:14:00

You know, sometimes someone just needs to make a call and they just gotta do it, and other people just go. I'm just gonna hang on to stuff like, I think that balance, it's always a bit of a challenge when you have two spenders.

Anthony: Yes, yes. I absolutely, I hear you. But you know, equally, as you said, that the, there are times when someone's anxious to spend it.

Yes. And the person at the other end has gotta say, not now.

David: Well, it's also when they spend, and then it's a big capital commitment. So that's where sometimes where the direct real estate or the purchasing to something. They hadn't thought out three to six months of what some of the other expenses that might be flowing through.

It's like, yeah, but you've [: 00:15:00

Not every decision's gonna be a hundred percent right. And sometimes people go, I, I hear what you're saying, but I'm doing that. Okay. But again, part of our role is to just help educate people and for them to understand the implications on either side of the fence and hence their call their money.

Anthony: So, so let me wrap this up and asking back to that idea of communication.

Yep. How, how often is it. Important to be having these conversations, whether it's you are having the conversations with clients or whether the couples are having the conversations with each other. Is there a rule of thumb that people should keep to?

an, some people love to have [: 00:16:00

You know, they might sit down as a family and say, right, for this year this is what we want to do. You know, people are like, no, I love to book my holidays like 12 to 18 months out so we know what we're working towards and I can. So some people are just attuned to that. The mix is when you, you ask a business owner, sometimes they can be very focused on their business, but what they sometimes then forget about is, well then how am I talking about that with my family?

Like, how do I move that d drive and focus in the business to helping educate my children about what needs to happen as opposed to, well, the money's always there for them. So that, that's always an interesting one. I just think the more you talk about it and you come back and then have it documented is probably the biggest message.

eed to be quite specific. By [: 00:17:00

So it's very easy to anchor your decisions based upon what's really been clearly articulated.

Anthony: I think it is such an important thing, communicating and keeping that communication. As he said, there's nothing worse than the, he said, she said from whatever a while ago you said we were gonna go on this holiday at this time.

It's, you know, keeping those goals intact and checking in on them on a regular basis.

David: Yeah. And not expecting people to always understand the first time you tell it to them. Or discuss it. And especially with children, when you wanna start educating stuff, it just takes a bit of time because you may have spoken or known about these concepts for years, and then you raise it with them and go, I have no idea what you've said to me, but I know you're busy.

way, and. Again, that might [: 00:18:00

Appreciate it, but I've got a few more questions. Great. So let's talk about some of those things. You can't sort of be, flip it and just go, oh, you'll be right. We'll, we'll sort it out later. I think it's important to to, to bring them on, on page.

Anthony: Thanks for tuning in to the Activate Your Wealth Podcast. For more information about how to get in contact with David Murdoch and the team at Paxton Bridge, to learn more about wealth activism, take a look at the show notes.

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