Building the Investor’s mindset

Warning: This post is not about investing money, but about investing time. So, if you’re looking for financial investing tips, you’re at a wrong place.

Our society’s reward system favours the selfish. And let's face it, we have all done it — while asking for a raise at work, while competing for a freelance project, while delaying response to mail from an acquaintance (thinking it will make you seem desperate) and so on. I am not saying this is wrong, it is important to raise your voice and ask for what you think you’re worth or to ask for work, but sometimes this crosses the boundary.

We get so caught up in our little worlds, that we think life is a zero-sum game.

It is important to understand that if someone else got work or got a hike, that doesn’t necessarily mean you are not going to get it.

Someone doesn’t need to fail for you to succeed.

Paul Graham explained this very well with “Pie Fallacy” in the essay How to Make Wealth. If you’ve not already read the essay, here is a snippet

A surprising number of people retain from childhood the idea that there is a fixed amount of wealth in the world. What leads people astray here is the abstraction of money. Money is not wealth. It’s just something we use to move wealth around. So although there may be, in certain specific moments (like your family, this month) a fixed amount of money available to trade with other people for things you want, there is not a fixed amount of wealth in the world. You can make more wealth.

Now, almost all of us want to get richer with time. So, instead of ruing about how tough the competition is, focusing on value creation and letting your work speak for you will serve you better. This brings us to the topic of this post — building an investment mindset. But first, what is an investment mindset?

Financial investments are a great way to let your money do the work and generate more money. With proper mindset you can do the same with your work — let your work create money compounded over time. This is called the investment mindset. I first came across investment mindset in this blog post by Amy Hoy. Here is how Amy describes the investment mindset

When you work for a company, or you consult, you get paid for your time, and that’s it. Spend your time, get a fixed amount of money in return. That’s not the way products work. In fact, it’s the opposite. Products are assets. And assets are what separate working stiffs from the truly wealthy. An asset earns more money for you as time goes by.

But the problem is, the moment a task looks like it is going to take long before you get a RoI, most of us shy away. Endurance is a virtue that most of us aren’t born with.

Whether it is learning a new skill, or building a product, or starting a blog — we find it difficult to keep on doing something if there is no immediate win. So, how do we trick our minds to help us keep going in such situations? How do we develop a investment mindset?

Small wins matter

It is important to recognize and appreciate small wins that you achieve on a day to day basis. Yet, I feel this is probably the most neglected aspect of training our minds to stay motivated. For example, if you’re writing a blog, make sure you celebrate small appreciative comments and let that motivate you to write better. If you are creating a product, make sure you appreciate small achievements like getting a component behave you’d like it to. Make sure you enjoy building those small blocks that will ultimately be your product.

Avoid temptations

While you are on your way to build/learn something, it is sure that you’ll have distractions. Deadliest of these distractions is the one that offers some money upfront — a freelancing assignment, a new job opportunity, or something else. Things that will make you think. “let me get this done and earn some, I can always come back to finishing this <whatever you’re doing>”. As time passes, it becomes almost impossible to come back to your project. So, it is really important to understand such temptations and avoid them — or accept them at the cost of your dreams!

See the bigger picture, but don’t get overwhelmed

Another aspect we miss while working on long term stuff, is seeing the bigger picture — visualizing yourself with your target achieved. Thinking how stuff will change once you are successful will motivate you to keep going. Be careful though, this can also overwhelm you with stuff that needs to be done before you reach there.