13 min

Our Mindset And The Effect It Has On Our Finances Common Sense Financial Podcast

    • Investing

The older I get the more I realize the impact our mindset has on every aspect of our life including our finances. What you think about, what you believe and the way you go about making decisions and living life is a direct result of how we think. We all know that there is no shortage of information and opinions on the topic of money. Turn on the TV and you are inundated with commercials for products, services, books and seminars that are screaming for your attention. How do we process so much information? There is an overwhelming amount of content that seems impossible to sort through and understand. In fact, it is said that the brain processes 400 billion bits of information per second and it is estimated that we consume 34 gigabits of information per day . Our brains are set to overdrive trying to sort through and make sense of what we are consuming. It seeks short cuts as it associates information with something we are already familiar with. It is like an assembly line grabbing things and throwing them into predefined categories you have already established for yourself. This process reduces the amount of thought that goes into figuring out what something means. The challenge is that once you have created this association or pathway in your mind about something, it is difficult to redefine it unless you stop to consider what is happening.

The older I get the more I realize the impact our mindset has on every aspect of our life including our finances. What you think about, what you believe and the way you go about making decisions and living life is a direct result of how we think. We all know that there is no shortage of information and opinions on the topic of money. Turn on the TV and you are inundated with commercials for products, services, books and seminars that are screaming for your attention. How do we process so much information? There is an overwhelming amount of content that seems impossible to sort through and understand. In fact, it is said that the brain processes 400 billion bits of information per second and it is estimated that we consume 34 gigabits of information per day . Our brains are set to overdrive trying to sort through and make sense of what we are consuming. It seeks short cuts as it associates information with something we are already familiar with. It is like an assembly line grabbing things and throwing them into predefined categories you have already established for yourself. This process reduces the amount of thought that goes into figuring out what something means. The challenge is that once you have created this association or pathway in your mind about something, it is difficult to redefine it unless you stop to consider what is happening.

13 min