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How to Become a Financial Optimist

Do not take setbacks too seriously

Throughout your life, you are bound to live some pretty frustrating moments, such as the one when you lose a job. The most important is that, when this happens, you do not lose yourself too. Remember that setbacks are only temporary and you can always find a solution to improve your situation.

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IDEA EXTRACTED FROM:

How to Become a Financial Optimist

How to Become a Financial Optimist

https://www.success.com/how-to-become-a-financial-optimist/

success.com

4

Key Ideas

Being an optimist

Being an optimist almost always provides you only with advantages. Including in the financial field. While you might be facing lots of stressful days, as we all do, there is certainly room for more optimism, financially speaking. For instance, a good start could be to focus on actions that lead to the improvement of your financial health, rather than on how bad your financial reality looks like.

Enjoy the small joys in life

When living your life, you should definitely consider enjoying the small things. This applies to the financial field too: learn how to enjoy and celebrate every small win, as this will eventually lead to the great wins.

Do not take setbacks too seriously

Throughout your life, you are bound to live some pretty frustrating moments, such as the one when you lose a job. The most important is that, when this happens, you do not lose yourself too. Remember that setbacks are only temporary and you can always find a solution to improve your situation.

Optimism rocks

In almost all aspect of our lives, optimism rocks. And so do optimists. This is why is important to surround yourself with optimist people, who share your perception of things, including when it comes to finances.

SIMILAR ARTICLES & IDEAS:

Financial planning

 ...is the process which provides you a framework for achieving your life goals in a systematic and planned way by avoiding shocks and surprises.

Try making a budget
  • Create a full inventory of expenses in front of you: Categorize them into fixed and variable; urgent and non-urgent; necessities and luxury; avoidable and unavoidable.
  • You can create a hierarchy of needs and decide which one’s to address first. It’s all about prioritizing. 
  • Accept that you have limited resources and unlimited wants. But you have to manage your resources. The sooner you accept this fact, the better you can control your impulses towards avoidable expenditures.
Maintain a personal balance sheet

It’s a statement wherein you can jot down your assets and liabilities.

  • Pull together your bank statements and other proofs of the liabilities
  • List down your assets like the bank balance, all investments, home value, and value of other assets.
  • Take a sum of all the assets to arrive at the total value of your assets.
  • List down your liabilities the (car loan, home loan, credit card balances etc.)
  • The sum of all the liabilities will show the value of the money you owe.
  • When you subtract the value of liabilities from assets, you get your Net Worth.

2 more ideas

Learned Optimism in Psychology
Learned Optimism in Psychology

This is a concept that suggests that we can always change our attitude and behaviour, be aware of our thoughts and stop our negative self-talk.

Learned Optimism is a positi...

Pessimism Vs Optimism

Pessimism is defined as the anticipation of good or bad things to happen in the future, while optimism is generally considered the opposite. Optimism can be defined as the individual difference variable reflecting the extent of which we hold positive expectancies for the upcoming event.

The ways in which we think affects our health, well-being and success, even though the situations are the same.

Benefits of Optimism
  • A positive impact on many aspects of physical and mental health.
  • Provides motivation to work harder.
  • Greater career success in life.

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Unrealistic Optimism
Unrealistic Optimism

The tendency to over-expect the probability of good things happening while negating the likelihood of anything bad happening is a common human trait.

Studies consistently ...

The Advocates for Pessimism

Pessimism, or having a bias towards a negative outcome, has a fan base too, as it seems that pessimists are immune to disappointment.

Their view of life already considers the worst possible outcome as the default one, and anything better than that can only improve it.

Loss Aversion

Losing something we already have is twice as much pain than gaining the same. This skewed feelings towards loss is known as loss aversion.

Expectations always dampen the feelings of happiness, always setting us up in advance for a dose of disappointment.

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“The Freedom Finder”

The freedom finders like to spend on new experiences in the pursuit of “living life to the fullest.” 

Try using a budgeting app or immediately allocating a portion of...

“The Relationship Protector”

The relationship protector is often family-oriented. If they can support them emotionally and financially, it gives them their sense of achievement at having helped. 

A relationship protector is far less likely to make spontaneous investments when others depend on them, and their conservative approach to saving prepares them for retirement. 

“The Opportunity Seeker”

They’re always looking to expand their options, and every financial decision is carefully calculated to maximize growth. 

The opportunity seeker has to watch out for taking on more risk with business initiatives or investment opportunities. Spending time with a professional to seek a second opinion can help you assess whether the newest opportunity is the best one for you. 

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Resilience

... is the ability to adapt to adversity or significant stress.

When faced with difficulty, resilient people recover more quickly. They view setbacks as temporary, move forward despit...

Optimistic explanatory style

The ability to perceive setbacks as temporary and solvable.

Instead of viewing stress as a sign of failure or as a threat, you can choose to look for the challenge within it or the lesson to be learned.

Finding meaning within chaos is a core component of resilient leadership.

Self-awareness and resilience

Resilient people take the time to understand what they’re feeling, even if it’s uncomfortable.

To manage your emotions effectively, you must learn to express yourself clearly, assertively, and with empathy for others.

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The Investor

People who invest are those who love the risk, trade frequently and have enough confidence to think they will beat the market.

A 2011 study found out that most investors u...

The Big Spender

The Big Spenders like to make social statements by having the latest car, clothes, or phones. They use the money for love and attention and are the main representatives of consumerism.

Advice: Think twice before making a purchase and try to filter the things that you really need from those bought by reflex.

The Ostrich

The Ostrich is someone who would rather bury their heads in the sand than organize their finances. 

Advice: Ostriches should try to take slowly their heads out of the sand. They should try to examine their finances, take a close look at a better saving rate and consider approaching a financial planner.

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Net Worth = Assets - Liabilities

Your net worth gives an overview of your financial situation at this point. It is the difference between what you own and what you owe.

Your net worth is positive if your assets exceed...

Calculating your assets and liabilities

Assets are anything of value that you own that can be converted into cash. Examples include:

  • Investments
  • Bank and brokerage accounts
  • Retirement funds
  • Real estate
  • Personal property: vehicles, jewellery and collectables.
  • Cash

Your liabilities represent your debts, such as loans, mortgages, credit card debt, medical bills and student loans.

Find your ideal

Determine your target net worth - where you want to be in the near-term and long-term future.

The following formula is helpful:

Target Net Worth=[Your Age−25]∗[1/5∗Gross Annual Income]

A 50-year-old with a gross annual income of $75,000 might aim for a net worth of $375,000 ([50 - 25 = 25] x [$75,000 ÷ 5 = $15,000])
Your net worth can be much more or much less than the amount indicated by the guideline.

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The model of future work

By 2030, up to 30 to 40 percent of all workers in developed countries may need to move into new occupations or upgrade their skill sets. Skilled workers in short supply will become even scar...

Employers should lead the way

The pace and scale that technology disrupts is a social, political and business challenge.
Employers are best placed to make a positive societal impact, for example, by upgrading the abilities of their employees and equipping them with new skills. Employers will also reap the greatest benefit if they can successfully transform the workforce in this way.

Talent is the largest barrier

Talent is the largest barrier to the successful implementation of new strategies.

Many leading businesses realize that it is quicker and more financially prudent to look internally and develop the talent they already have. Yet only a third of global executives report that their organizations have launched any new reskilling programs.

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Burnout is not the same as tired

Burnout is job-induced depression.

When you suffer from burnout, 

  • you become chronically exhausted
  • you become cynical and detached from...
3 Secrets to avoid burnout
  • Be Optimistic. Confronted by a bad situation, optimists perceive it as a challenge and try harder.
  • Find Meaning In What You Do. When you find true meaning in your work — when it’s not a job, it’s a calling — you don’t burn out.
  • Double Down On Relationships. Those who increase their social activity when things get hard handles stress the best.