Can You Think Your Way to Wealth?

Having the right outlook on life can help you on your path toward financial success. Here’s how to develop a wealth-building mindset for yourself.

Career woman thinks as she looks out a window
(Image credit: Getty Images)

For an extraordinary high achiever, such as NBA legend Michael Jordan, you could reasonably attribute his success to one of many things. His famous work ethic. His high basketball IQ. His shoes. But to His Airness himself, it was the result of a relentless mindset:

"I've missed more than 9,000 shots in my career. I've lost almost 300 games. Twenty-six times, I've been trusted to take the game-winning shot and missed. I've failed over and over and over again in my life. And that is why I succeed."

Jordan acknowledges that he’s had his roadblocks along the way. "Everybody has had them. But obstacles don't have to stop you. If you run into a wall, don't turn around and give up. Figure out how to climb it, go through it, or work around it."

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When you think about what it takes to become financially successful, what comes to mind? A smart investment strategy? Sure. The discipline to spend less than you earn? Definitely. A high-paying job? Certainly helpful. But one thing you may not have thought about — and that is often overlooked — is a Jordan-like mindset. That doesn’t mean the determination to become the greatest investor of all time, but rather, the desire to consistently improve.

In essence, to build wealth, you need the right mindset … a wealthy mindset. In her bestselling book, Mindset: The New Psychology of Success, Stanford psychologist Carol Dweck identifies two basic mindsets: fixed and growth. Let’s look at how each mindset can potentially impact your financial life and how your mindset can play a role in building wealth.

The Fixed Mindset

A fixed mindset is the belief that you are born and raised with a fixed character, intelligence and abilities, and these qualities will not change throughout life. People with a fixed mindset see success as dependent on those inherent qualities.

With a fixed mindset you:

  • Focus on proving to others how smart or talented you are
  • Consider working on something you’re not naturally good at as a waste of time
  • Avoid taking risks or putting forth effort because you fear it will reveal you’re not smart or talented
  • View failure as a setback to steer clear of

The Growth Mindset

Meanwhile, those with a growth mindset believe your character and capabilities can be improved over time through effort. Challenges are opportunities, while failure is just a feature of growth, not a limit of your abilities.

With a growth mindset you:

  • Focus on consistently developing your abilities
  • Desire to learn and try new things
  • Embrace challenges and persist in the face of obstacles
  • View the process of improving as success in itself

A Fixed Mindset’s Effects on Your Wealth

Through the prism of a fixed mindset, everything about your financial situation appears inevitable. Your job and your salary. Your spending habits. Your bank account balance. The financially successful people you know were just born with a high intellect or a wealthy family. This static way of thinking can adversely impact your finances in a variety of ways, including:

Lower earning potential. If you are not encouraged to take on new challenges and improve your skills, then it follows you are unlikely to advance your career or launch your own business, which effectively caps your earning potential.

Lack of planning. Fear of failure and obstacles could also keep you from taking on foundational wealth-building steps, such as creating a budget or saving and investing for retirement.

Reckless spending. If you focus on comparing yourself to others, then you will likely find yourself stuck on a hedonistic treadmill, spending money on things that may not actually improve your life.

Investment mistakes. Those with a fixed mindset seem to suffer from an acute form of confirmation bias — the tendency to acknowledge only information that fits your personal views and dismiss any information that conflicts with them. One of Dweck’s studies found that after a series of tests, those with a fixed mindset wanted to only hear about what they did right and not what they did wrong, even though that information could improve their test performance.

There are two dangers here. First, disregarding useful facts and opinions can result in less-than-optimal investment choices. You may find yourself always chasing the next hot stock, or never taking enough risk to achieve your financial goals. And second, you may never ask for professional help to manage your finances, be it a financial adviser, tax adviser or estate planner, which could increase the likelihood of costly mistakes.

A Growth Mindset’s Effects on Your Wealth

A growth mindset dismisses the thought of limitations. Financially speaking, with enough hard work, you can always improve in your professional and financial lives. You don’t need a substantial inheritance or million-dollar business idea to build wealth. Taking small, consistent financial steps will make a big difference over time.

Optimists share many of the same traits attributed to a growth mindset, such as working toward goals and viewing failure as learning opportunities. A study in Germany extensively interviewed super wealthy individuals, with a net worth of $33 million to $1.2 billion, and found the one personality trait most common among nearly all of them was optimism. In another five-year study of self-made millionaires, 67% said optimism was a key contributor to their success.

The fact is a growth mindset can have a very positive impact on your money, including.

Higher earning potential. An affection for new challenges, building skills and constructive criticism will undoubtedly translate into more career success, elevating your earning potential.

Better financial habits. Someone who is interested in learning and working toward big goals is more likely to adopt effective financial habits, such as sticking to a budget, avoiding debt and saving regularly in a retirement account.

Better investment choices. Those with a growth mindset are more comfortable taking risks and committing to goals. Investors know risk and return are related, so it could be argued those with a growth mindset are more comfortable taking an appropriate amount of risk and sticking through those inevitable market downturns. Further, someone who judges their investment returns by how close they are to their goals rather than in comparison to the latest hot stock will more likely stay on track.

Acceptance of financial help. Unlike a fixed mindset, the desire for useful information makes those with a growth mindset more likely to ask for help and collaborate with others to improve. A partnership with a financial professional can help someone find financial opportunities and avoid costly mistakes.

Steps to Upgrade Your Own Mindset to Build Wealth

A healthier, more productive grow mindset as it relates to wealth is something you can work toward. Here are steps that can help you develop a wealthy mindset:

Focus on what you can control. You can control how much of your paycheck you save, how much you spend, how much you pay in investment fees and what investments you buy. To focus only on things under your control is a habit that can consistently improve your financial situation.

Measure your financial success not by account number but by life satisfaction. Instead of comparing your own financial situation to your neighbor or the flavor-of-the-month investor in the news, ask yourself how happy you feel. If you live in a comfortable house, have a steady job, are on track toward retirement and are helping to send a child to college, then you are doing just fine.

Work with a financial advocate. People hire personal trainers to improve their health habits. The financial equivalent can be achieved by working with a financial adviser. As a trained professional, especially a fiduciary, an adviser’s job is to inform you of what decisions are in your best financial interest. Plus, sharing your goals and plan with someone will help keep you accountable.

If you start thinking with a growth mindset, your dreams become something to work toward and not something out of reach except for a lucky few. That goes whether you’re seeking a comfortable retirement or a world championship.


This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

Jacob Schroeder

Jacob Schroeder is a financial writer covering topics related to personal finance and retirement. Over the course of a decade in the financial services industry, he has written materials to educate people on saving, investing and life in retirement.

With the love of telling a good story, his work has appeared in publications including Yahoo Finance, Wealth Management magazine, The Detroit News and, as a short-story writer, various literary journals. He is also the creator of the finance newsletter The Root of All (, exploring how money shapes the world around us. Drawing from research and personal experiences, he relates lessons that readers can apply to make more informed financial decisions and live happier lives.