Imagine a beautiful day: warm, sunny, everything you could ask for. So, you look at your phone to see what the weekend is going to be like and you see this:
What comes to mind?
Do you find yourself saying, “well, at least today and tomorrow are beautiful days.”
Or, do you say to yourself, “of course it’s going to rain this weekend, this was too good to be true…”
Or, do you just take everyday as it is and enjoy whatever comes your way?
I’ve been exposed to all three lately, and I’m a believer that your mindset directly determines the emotional outcome of any situation.
Oh, the pessimist. Everything is doom and gloom. Well, not always, but they see the glass as half full. If you were to ask them how the weather was, their response would be “today’s nice, but it’s going to rain this weekend.”
The pessimist always thinks about failure. They look at what can go wrong. Rightly or wrongly, they have a belief that the worst case scenario will happen.
This can be a strength. Since many pessimists expect the worse, they have good plans when things do go wrong. They also may have stronger emotional fortitude in the face of adversity, because, in their eyes, it was bound to happen that way.
Dealing with a pessimist is tough, though, especially if you’re not one. It can be hard to handle the negativity, especially if the pessimist isn’t a good communicator. But, you can leverage their mindset as a strength if you communicate well.
Yay, the optimist. Everyone love the optimist because everything is amazing! They always see the glass as half full. If you were to ask them how the weather was, their response would be “amazing!”
The optimist always thinks about the positive. They look at the benefits and rewards of the outcome, usually before they get there (or even close to getting there). The optimist always looks at the best case scenario.
This can be a strength, because people love following optimists. Nobody likes to hear the doom and gloom everyday, and the optimist provides a vision of the win. Many optimists can be great visionaries, because they can inspire a path.
Just like the pessimist, though, constantly dealing with an optimist can be a challenge. Many times, they ignore or overlook the negatives or drawbacks of an idea. Sometimes, they can just be too positive. Negative 10! Amazing! Ya right… Be miserable for once!
The realist strikes a balance between the two. They can see the positive and the negative, and they can take everyday (or everything) one step at a time. Heat? Great. Rain? That’s fine. They typically plan for the best and look at the worst.
The realist is the optimal balance, and it’s what we should all strive for.
It can be tough to be a realist – we all have our own biases towards a situation. That’s why both pessimists and optimists can be great tools for the realist to gain a better perspective.
I’m trying hard to be a realist. My premise on business is realistic – I want to build a business over time, validate the results, and then make the jump. I’m fully aware that it may fail, which is why I don’t want to jump into it too early. However, I’m optimistic it will be successful – but I need the proof in the numbers.
However, a realist can also get stuck by fear. Fear cripples when the realist gets too traps by validating data and seeking opinions. At some point, there needs to be a jumping off point. Don’t get trapped in the realist-validation cycle.
How Your Outlook Impacts Your Money
So, what mindset is best for your money? Actually, studies have been done to look at this. It turns out, the realist is typically the best with money. The study labels them the realistic-optimist. These hybrid personalities combine the positive outlook that most optimists have, with the clear perspective that pessimists have. This works out great for money management.
The fact is, building real wealth is about self-control. You have to have control to budget, save, invest, ride out stock market fluctuations, and more. At the same time, you are doing all of this because you want a vision – you see a better future for yourself and you want to grow your money over time.
The fact is, dealing with money is tough. You want more of it (optimism). You’re afraid of losing it (pessimism). And there’s a constant battle between the two.
As you go into the weekend, look at your attitude towards life, and see how it’s impacting how you manage your money.
Are you a pessimist, optimist, or realist?
Robert Farrington is America’s Millennial Money Expert® and America’s Student Loan Debt Expert™, and the founder of The College Investor, a personal finance site dedicated to helping millennials escape student loan debt to start investing and building wealth for the future. You can learn more about him here and here.
He regularly writes about investing, student loan debt, and general personal finance topics geared towards anyone wanting to earn more, get out of debt, and start building wealth for the future.
He has been quoted in major publications including the New York Times, Washington Post, Fox, ABC, NBC, and more. He is also a regular contributor to Forbes.