One of the saddest ironies of personal finance and wealth-building is that being poor is a very expensive state of affairs, while being wealthy tends to open doors to more wealth and more savings.

The TL;DR? Momentum and inertia are incredibly powerful, whether you find yourself in extreme poverty or extreme wealth.

I don’t mean “poor” in the colloquial, “I have $12 in my checking account because I’m 24 and went to too many bars this weekend” poor, I mean the “37+ million Americans living in poverty as of 2020” poor.

(If you’re interested in some of this data, you can download the 2020 tables from the US Census Bureau’s Income & Poverty statistics and peruse them at your leisure. The latest statistics suggest things have gotten worse; 14.4% are living in poverty in 2022, up from 11.4% in 2020.)

For financial context, the threshold for poverty was defined by the Census Bureau in 2020 as one person earning less than $13,171 per year, on average, or a household of two people earning less than $16,733, on average.

The reasons for entering poverty vary: job loss, addiction, a series of unfortunate events, mental illness, divorce, an unexpected child…the list is long. For many people already living close to the edge (read: paycheck to paycheck) they’re just one or two emergencies away from finding themselves without shelter.

But regardless of those reasons, once you’re in poverty, it’s difficult to escape the cycle.

This reality is captured well in tweets like this one:

When you consider that nearly half the jobs in the United States pay less than $30,000 per year pre-tax, it’s easy to see how close to the edge people really are. On $30,000 or less and with resources that cost far more than minimum wage, your margin of error is relatively small.

Keep reading to learn about the flip side of the equation.

In honor of this week’s podcast episode about the sneaky ways in which we hinder our own progress, today’s throwback blog post is about a powerful perspective shift.

Because this post is going to border on the spiritual, I want to make this fat, practical disclaimer first: I am arguing that it is more economically advantageous for you to embody an abundance mindset. Regardless of your belief system, this will get you further ahead.

OK—let’s dive in.

The best examples I can think of for the scarcity vs. abundance mindsets are two of my friends. After I describe their personalities, you'll probably be able to guess which one has become more abundant in her financial situation.

These friends started out in financially similar situations with comparable salaries.

But when I’d go grab a few things at the store with one of them, we’d no sooner have exited the threshold of Kroger’s automatic doors than she’d Venmo request me for half the amount. “Friend #1 requests $5.12.” You know the type. Sometimes it’s good to be on top of your Venmo requests so people don’t forget, but there’s usually some level of “It’ll come out in the wash!” that’s mutually agreed upon in friendship for smaller purchases.

The energy around the behavior was urgent and untrusting—if I’m not in control of this $5.12, I’ll never get it back because you’ll forget or you won’t want to pay me back and I need this $5.12 because my paycheck isn’t for another week and and and and—

This stream of consciousness leads nowhere positive, because the energy is negative. And at the risk of revealing my true status as an aspiring Woo-Woo McGee, the more you emit these radio waves of I don’t have enough, the more you create situations in which that becomes true (but more on that in a little bit).

Now let’s take a peek behind Door #2, on the other end of the scarcity/abundance spectrum.

This friend insists on treating you. Coffee after class? She’ll physically block you from the cash register so she can cover your nitro cold brew. Insist you don’t want anything? She’ll come back with a venti version of whatever she got and hand it to you, smiling. You get the sense with this friend that she’s absolutely not keeping score.

While you could spin this case study a few different ways, it’s my go-to example for scarcity vs. abundance, because I became closer to Friend #2 after being accustomed to Friend #1's nickel-and-diming method of navigating the financial ebbs and flows of life. “I brought wine to a party and you had two glasses? Well…aren’t you going to Venmo me for that?”

So one day (during a coffee date), I told Friend #2: “You are so generous.”

“It's an abundance mindset.”

*record-scratch*

I don’t know what that is, but it sounds made-up, I thought.

Read more about the practical reasons why an abundance mindset actually creates more abundance.

A few weeks ago, I tried a thought exercise called radical accountability. According to this philosophy, regardless of what happens to you in your work and money, you ask yourself: “How did I indirectly contribute to this outcome, and what can I do to improve it?”

You know what I learned? I make excuses constantly (and subconsciously). I shifted so frequently into “victim” mode that I was undermining my own capacity and control.

Today’s episode is about the sneaky ways in which we stand in our own way and the complications of this conversation in a world where the game is rigged differently for different people.

My guest, Dominick Quartuccio, walks us through a framework for interrupting and rewiring these negative thought patterns to design a future that you’re excited to “live into.”

Listen now.

P.S. More of a YouTube fan? Watch the episode here.