Have you ever wondered why some people seem to have all the luck with investing? They always seem to be in the right place at the right time, making a killing while the rest of us are left scratching our heads.
The truth is, luck has very little to do with it. But your mindset does.
When investing your time, energy, and money for the long term, the key to success is having a growth mindset. A growth mindset is having the belief that you can always improve and get better at something. This leads to taking calculated risks, trying new things, and continuous learning.
In her 2006 book, Stanford University psychologist Carol Dweck studied the differences between what she called ‘fixed’ and ‘growth’ mindsets. Her groundbreaking work revealed that people with a growth mindset were overwhelmingly more successful than people with a fixed mindset.
Someone with a fixed mindset believes their intelligence and abilities are something they’re born with, so any limitations mean they just don't have the abilities to achieve great things. Someone with a growth mindset, however, realizes there’s always room for improvement. No matter how intelligent or skilled they are, they can always get better.
This is why a growth mindset is essential for entrepreneurs & passive income investors. If you're constantly looking for ways to improve, you'll be setting yourself up for success in whatever you do.
Here are seven ways you can develop a growth mindset for your own success.
1. Challenge Yourself
One of the best ways to develop a growth mindset is to try something new or difficult regularly. Whether it’s as intense as training for an ultramarathon, or taking on a new passion project, feel the fear and try it anyway!
Challenging yourself to do things you're not initially comfortable with gives you the transferable skills to grow and improve in any area of your life — and this is especially important when it comes to your investments.
Besides, you might find you really enjoy the challenge, even if you choose not to do it again.
2. Be Open to Feedback
It's human nature to want to defend yourself against critical feedback from others. However, being open to feedback and constructive criticism is crucial if you want to grow your knowledge and skill set.
Seek out coaches and mentors, and listen to their advice — after all, these people have been in your shoes and understand what it's like to go through the learning process of building wealth.
By being open to feedback, you’ll develop more confidence in your decisions because you'll be leveraging the experiences and advice of others.
3. Don't Be Afraid of Failure
Remember that failure — and learning from our mistakes — is an essential part of succeeding in life. Losing money and time on an investment project doesn't make you a failure. Instead, use these lessons as learning experiences to help you grow.
This is especially true for entrepreneurs. When starting a new venture, the road ahead is rarely predictable, which means you're bound to make some mistakes along the way. But these mistakes can be invaluable learning experiences.
So don't be afraid of failure. Embrace it, learn from it, and use it to help you reach your goals.
In any endeavor in life, there are going to be setbacks and challenges along the way. This is no different for building your wealth potential for passive income.
Many people think that if they invest their hard-earned money in the stock market and it goes down, they'll lose money and they'll never get it back, but that's simply not true. Don't let that discourage you from continuing to invest for the long term. Stay positive and keep investing, even when the market dips, because opportunities are always out there to help your portfolio weather the storms.
If you have enough patience to see the bigger picture and know that success will come eventually, you'll be able to persevere through hard times.
5. Keep an Open Mind
The more you learn, the more you'll earn. So, read books, listen to podcasts, and join online communities on topics that interest you to continue expanding your skills and knowledge.
To get started, check out our free weekly journal club for my hints and recommendations on the books, articles, and resources that give me food for thought. I also recommend getting involved in our Passive Income Docs Facebook community to connect with (and learn from) other seasoned real estate investors in a similar situation to you.
6. Know When to Cut Your Losses
It's not always easy to know when to cut your losses or when to hold on tight to your investments, but it's important to remember that there is no such thing as a ‘sure thing’ in the stock market!
As I said earlier, losing a significant amount of money on an investment isn’t necessarily a sign you should give up, but perhaps it's a sign to reevaluate your strategy and try a different approach. Of course, you need to be careful not to make poor decisions simply because you want to make up for your previous losses — remember to keep emotions out of your investment decisions.
7. Have an Attitude of Abundance
Building wealth and having an abundant attitude toward money go hand in hand with success. Thinking positively about your finances will give you greater confidence in yourself and will help you stay motivated to continue building your long-term portfolio.
Thinking positively about money doesn't mean you have to spend everything you make — it just means that you have a healthy relationship with your finances and are willing to learn as much as possible about the financial markets so you can become a successful investor.
Once you learn the principles of investing and have a positive outlook on your future, you can start working on achieving your financial dreams.
The Bottom Line
If you want to be a successful investor and build the life of your dreams, you need to develop your growth mindset. A growth mindset will make you more confident, more successful, and more resilient over the long term.
Just remember that learning is an ongoing process — you can't expect to become an expert overnight. When you combine the right attitude with a positive attitude toward learning, you'll be able to reach your goals faster than you ever thought possible.
Embrace the idea that you can always learn more and improve your skill set, and you'll be setting yourself up for success in all areas of your life.
Have a great week!