What Does Mindset Mean? Examples and Why it Matters

Dear Happy Investor, what does Mindset mean and what is it? In this article you will find explanations and examples about the meaning of Mindset. It is of great importance, given that it plays a determining role in your life. Having control over your mindset means creating a life the way you want it. Isn't this of the highest priority?

Read on to find out what Mindset is and how to make it work to your advantage.

Contents

What Does Mindset Mean? Explanation and Examples 

Your mindset means your collection of thoughts and beliefs that shape your thinking patterns. It affects how you think, what you feel, and what you do.  

Your mindset impacts how you make sense of the world and yourself. A mindset is a set of beliefs that influence how you perceive. It determines how you think, feel and act in any scenario.

Mindset is a way of thinking, a mental inclination or disposition, or a state of mind.

It is very important to understand what this means. In other words, it means that your life is controlled by how you think. This is why people say "you are as you think" (see As a Man Tinketh by James Allen). 

Happy Investors strive for financial independence. But what good is financial freedom if we are not free in our thoughts? If we continuously want more (money), we will never be free or independent. 

This is why within my strategy for successful investing (see course) there is also much emphasis on the emotional aspect. Investing means above all not making any mistakes. And mistakes arise particularly from emotional actions. We make mistakes when we are greedy or anxious. Developing a mindset means that we have more control over this.

Types of mindset: Growth mindset vs. fixed mindset

There are two fundamental types of mindset: fixed and growth. What does this mean?

Having a fixed mindset means you believe your skills are fixed and unchangeable. You may also assume that success is determined solely by your talent and intelligence and it does not require any effort.

If you have a growth mindset,  you feel you can develop your qualities and abilities over time with effort and perseverance. People with this mindset do not necessarily believe that everybody can become Einstein or Mozart simply by trying. They do, however, believe that with effort, anyone may become smarter or more skilled. Or in other words, a growth mindset means making the most of your potential.

In life you only get further by thinking in terms of growth. By believing that you can develop yourself, you will create many more opportunities. You think in terms of abundance and are not afraid to fail. You continue where others stop because you know that challenges can be overcome. This way of thinking leads you to invest more in personal development. As a result, you become smarter, more effective and more valuable. Everything else is a consequence (healthier, stronger, more money, et cetera). 

When investing, it is also important to think in terms of growth. Have the courage to invest in growing companies. Have faith in a growing economy. And make money work for you. 

Examples of growth mindset and fixed mindset

Fixed mindset: I'm already very talented in this subject.  I don't think I need to improve.
 Growth mindset: There is always room for improvement.

Fixed Mindset: I'm just not good at this.
 Growth Mindset: This is challenging for me, but I am sure that I can improve.

Fixed Mindset: I'm either good or bad at something.
 Growth Mindset: With patience and persistence, I can develop my skills.

Fixed Mindset: When people give me feedback, it feels like criticism.
 Growth Mindset: I value feedback from others. It assists me in learning and growing.

Want to learn more? Read our practices for growth mindset.

Types of mindset: Positive thinking vs.  Negative thinking

In practice, mindset means that we think predominantly positive or negative. People who think positively are more likely to take action and achieve their goals. Negative thinking can freeze us, instilling concerns and doubts and stopping us from taking the steps necessary to achieve our goals.

It is essential to acknowledge instead of hiding negative thoughts. They may have an unconscious impact on our actions. When you study them, you can discover the root of those beliefs. That is why those negative thoughts provide valuable information to a person.

You can learn from that awareness and re-frame it in a way that supports you if you can identify that negative perspective and question self-sabotaging patterns of thought. 

The most important thing to figure out is whether a negative perspective benefits you or not. If it helps you grow, it's a good thing; if it doesn't, it's crucial to understand it so you can replace it with something more constructive.

Most life experiences have a mixture of good and bad in them. A positive mindset means that you can always choose to focus on the good.

Examples of positive thinking vs. negative thinking 

Negative thinking: I have an excuse.
 Positive thinking: I have a program.

Negative thinking: I’m a failure.
 Positive thinking: Failure allows me to learn.

Negative thinking: I can’t do it.
 Positive thinking: I will find the way to do it.

Negative thinking: There is a problem.
 Positive thinking: I have a solution.

Want to learn more? Read our practices for developing a positive mindset.

What is Mindset, and why does it matter?

We now know what Mindset means, but does it matter? Yes. Mindset is the single most significant aspect that influences your success, whether personal or professional. What you think about regularly has a direct influence on your actions, not the other way around. As a result, it's essential to get it right.

Not many people dwell on what Mindset is and what it means. This is a crucial missed opportunity.

Mindset is a seemingly insignificant factor that makes a tremendous difference. It is the key differentiating factor between those who achieve success and those who do not. And you must learn to master yours if you are serious about achieving success in any aspect of your life.

Controlling your mindset means controlling your thoughts. By thinking in a certain way you will force actions in line with this thinking.

The right mindset means more growth and progress

As you can see, a fixed mindset or a negative mindset filters your reality, and it does not allow you to see opportunities for growth or solutions to a problem. In this sense, it makes you stagnant. 

We have a lot of limiting beliefs that are part of our mindset.  For example, If you think that making money is hard, you won't be open to seeing the different ways you can make money.

It’s essential to change limiting ideas for more constructive ones. 

Your mindset significantly influences how you deal with life's challenges. A child with a growth mindset has a strong motivation to learn,  work hard and discover the world. They are more likely to persevere in the face of adversity as adults. Adults with a growth mindset see challenges as opportunities to learn and progress rather than giving up. On the other hand, people with fixed mindsets are more likely to give up in the face of adversity.

Will you begin to see what mindset means to you?

Mindset shapes your whole reality

Your mental activity creates the events in your life. Thoughts create emotions, and emotions, actions. Your behavior, then, depends on your thoughts.

For example, If you believe that you can’t do something, that thought will create the feeling of incapability. As a result, you will not do the thing right or you will not do it at all. 

Let's say you want to start your own business, but you have the idea that it will fail or that you do not have the right conditions yet. Negative thoughts make you feel disappointed so you abandon that idea immediately. Then, you will never start your own business.

Mindset makes you enjoy life more

A negative mindset, for example, makes negative things stand out. Most events in life have positive and negative aspects, and depending on your mindset, you focus on the negative or the positive. This means mindset: it determines how you see life. You are as you think.

When you have a negative mindset, you focus on flaws or problems. When you think positively, you focus on solutions. 

Of course, you can always choose what to focus on. But If you choose to focus on the negative, you will suffer more.

Mindset determines your self-esteem.

If you want to accomplish anything meaningful, you must first believe that you can do it. It makes no difference what others think. The internal dialogue that influences how we view and judge our worth, whether favorably or negatively, is the source of self-esteem. It also shapes our perception of ourselves.

The development of good self-esteem requires a strong and optimistic mindset. It's a vital factor that influences our everyday self-talk and supports our most intimate perceptions about ourselves, attitudes, and feelings. So, rather than criticizing and doubting, fill your mind with positivity and inspiration.

The right mindset means a healthier life

Scientific studies show an indisputable link between positive thinking and health. A study by the Yale School of Public Health demonstrated that positive thinking had a beneficial effect on health outcomes and longevity. For example, people who think positively will have lower blood pressure, healthier blood sugar pressure, a healthier weight, and will suffer less from heart diseases.

So, the right mindset means a positive effect on your mental and physical health on the long term. That is why it is so important to change negative, limiting beliefs and ideas for positive and constructive thoughts.