Guest Blog, Knowledge, Wealth Creation

5 Entrepreneurial Mindsets for Wealth Creation & Management

The aftermath of the second wave of the pandemic led to serious economic downturns. Over 10 million Indians suffered job losses and around 97% of families encountered revenue losses. Industrial production plunged on average by 28% in G20 economies within the space of two months (between February and April 2020). Larger declines between 40 and 60% were recorded in Indonesia, Italy, South Africa, and India. Minor declines were also recorded in Korea and Russia. Displaying these data and facts is not for the sake of re-opening the scars and defects that have led to a global financial crisis, but to steer our minds towards the direction of entrepreneurship and productivity. If the Covid-19 rough-and-tumble has taught us anything, is that- we can no longer rely on our jobs for security. And instead of being socially hardwired with the ‘consumer mindset’, we need to start embracing an ‘entrepreneurial mindset’ as a shield against the existing economic turbulence.

Definition of an Entrepreneurial Mindset

Typically, an entrepreneurial mindset is a kind of thinking that improves your ability to confound challenges, become assertive, take certain risks, and accept responsibility for decisions.

Possessing an entrepreneurial mindset is not complicated. It is not designed for a certain class of people, and it is not genetically imprinted. It simply requires you to be in charge of your purpose and goals, rather than allowing societal and economic factors to dictate them for you.

We are the entrepreneurs of our own lives. Each waking moment is spent on confronting challenges (whether at work, home or school), taking risks, making decisions, and accepting the consequences of those decisions. The same lifestyle routine also applies to business and financial investments.

How Does Developing an Entrepreneurial Mindset Relate to Wealth Creation? 

For most people, the thought of running a business or having a credible investment can be scary and uncomfortable. The reason for this is because – the majority of the populace is still socially programmed to ‘consume’, i.e, consuming goods and services, consuming content in form of education or entertainment, chasing after jobs, and trying to get employed by big companies  (established by entrepreneurs).

With this kind of consumer mentality, it becomes hard to create wealth and eliminate poverty on a larger scale. That is why there are more unemployed graduates and job-seekers than there are entrepreneurs.

Surely, everyone is a consumer, but what separates the wealthy from the poor is that the wealthy or ‘successful few’ have achieved that status by shifting their minds away from- ‘what can I buy’ to ‘what can I create’,which job should I apply for’ to ‘What business can I create so I can have my employees’. 

True, it is not easy creating a business or maintaining it, but it becomes simple to comprehend once you’ve developed the psychological thinking of an entrepreneur, not just in your daily lifestyle, but in how you perceive the social environment and its economy.

It is a common-sense principle; the wealthy stay rich because they provide what society and people in society consume. And because they know that majority of people are lazy, and they stagnate themselves with social norms, traditions, and dogma, they (the wealthy) keep controlling and regulating the economy. Sometimes, this kind of control or regulation is not always manipulative or selfish, but exemplary and pragmatic.

Entrepreneurial Mindset

5 Entrepreneurial Mindsets to Adopt & Sustain

Repealing the consumer mindset is simply the inception of the entrepreneurial ‘mindset shift’. There are five key steps to adopt and nurture to complete the process.

1. Adopting a Mindset of Abundance

There are two common mindsets to have- a mindset of ‘scarcity’ and a mindset of ‘abundance’. The former is a devaluation of self and observation, while the latter is an appreciation of self and observation. People with a scarcity mindset always believe that: there are never enough resources or opportunities for them, or they are not strong and confident enough to take on certain tasks, challenges, or activities. Because of this kind of mentality, they become stagnated in one position, neither moving forward or backward. They become comfortable with ‘consumerism’ in this context. 

Surprisingly, the scarcity mindset is not only suffered by the poor but mostly by individuals who make a good amount of money from their jobs. People who count six figures annually from working a good job hardly think beyond their jobs or beyond working for people. They bask in the illusion of comfort, consumerism, and security which shrinks their mindset to think that- “if I lose this job, I become a nobody” or “if I lose this job, I can no longer create wealth”. And this is why they encounter financial problems when they eventually lose their jobs or retire (even with a savings account).

A mindset of abundance is a mindset of wealth. It opens your mind to the possibilities of how to bolster your self-worth, how to create multiple streams of income without relying too much on a job, and how to improve your productivity. The abundance mindset is an important component of the entrepreneurial mindset because it provokes creativity and effective decision-making in the aspect of financial management.

2. Polish Your Creative Mindset 

Retaining a creative process is a critical part of developing an entrepreneurial mindset, and it is one of the secret sauces to wealth creation. Co-Founder of Pixar and former Disney president-Edwin Catmull once said; 

for me, creativity includes problem-solving. That’s the broad definition”

Entrepreneurs often visualize an opportunity, an opportunity of ‘what exists’ and ‘what could exist’, and they create ideas that can merge both, to provide a solution.

An entrepreneurial mindset utilizes innovation and creative solutions for social, industrial, and technological problems. It is about thinking- “how can I solve this problem” rather than “who, or what can help me solve this problem”. The former is a creative mindset for accomplishing goals, providing value to others, and getting legitimate profit in return, while the latter is a consumer mindset for stagnation and mere survival.

3. An Open-Mind Combined with Knowledge 

An old business coach of mine, Kenny Nwokoye, introduced me to the dangers of what he called the ‘fixed mindset’. He said that individuals with a fixed mindset are proud and arrogant about what they already know or believe in, that they are not willing to learn anything else, believe in anything else, or invest their effort and resources in anything else. And people with such a mindset cannot create wealth or grow to be financially stable because they are not open-minded and are not willing to expand their knowledge on what’s possible.

Talking about the creative mindset earlier, we saw that an entrepreneur examines ‘what exists’ and ‘what could exist’, the same approach can be applied here, that is- ‘what is possible’ and ‘what could be possible’. If you are looking to create and manage wealth, then you should always be conscious of ‘what could be possible’, to enable you to explore better business options and financial opportunities.

However, it is important to apply open-mindedness with knowledge. Robert Greene in a podcast said that being open-minded without proper knowledge as backup is like having the mind of a child. You have to be open-minded to knowledge and experiences and also apply them to foster financial goals and objectives.

4. Building Consistency 

An entrepreneurial mindset demands consistency just like every other important thing in life. If you wish to create substantial wealth you have to be mentally disciplined in staying consistent with your plans and objectives. Don’t allow the myriad of choices and distractions to sway you from achieving your target. To learn more about how to stay consistent in a world full of choices see this.

“Success isn’t always about greatness. It’s about consistency. Consistent hard work leads to success. Greatness will come” according to Dwayne Johnson. 

People who become wealthy are those who stay committed to the process and techniques involved in achieving their goals. This is not a sheer motivational speech, this is a basic principle of business and a rule of life.

5. Evaluating Risk

The mental ability to evaluate risks while making decisions on; monetary savings, financial investments, or simply designing a new business model, is what distinguishes a successful and wealthy individual from a broke and clueless individual.

The fact is, anyone can start a business, but can’t make less risky decisions. Proper risk management is simply formulating a plan or a decision based on favorable odds with consistent and stable analysis. 

Nonetheless, it is commonly misconstrued (by those who haven’t fully developed an entrepreneurial mindset) that entrepreneurs take sudden risks and last-minute decisions to yield profitable outcomes, which is not entirely the case.

The best decisions that become profitable are not last-minute decisions (even if they are seen to be taken in the last few minutes by the ordinary eye). They are decision that has been properly evaluated and analyzed to be less risky. 

When evaluating risk, references to how past and present strategies and principles can alter results are assessed. ‘What worked’ and ‘what is working’, is separated from ‘what failed’ and ‘what is failing’, to unravel a 60% chance of success, including contingencies. This has been the basic precept of every successful gambler, investor, and entrepreneur.

This is Noteworthy 

Wealth creation requires a mindset that reduces consumerism and embraces entrepreneurship. The entrepreneurial mindset discussed in this post is not to nudge you towards the painstaking process of starting a business, but to help you understand the integral connection between mind and wealth. 

Some of the points here may seem obvious, but as obvious as they are, they are the most trivialized. If you hope to attain financial freedom amidst the global economic crisis, adopt and apply these various entrepreneurial mindsets in your savings, investments, projects, etc, and stay consistent with each step.

Submitted to OroPocket, by Author Preye Raymond.