The only real mistake is the one from which
we learn nothing - Henry Ford
I recently had the pleasure of talking with
Phil Muscatello on his podcast Shares
For Beginners. It was wonderful to begin
exploring the similarities between my
past career coaching athletes and now
developing investor education.
Upon reflection and reviewing the recent
Education and Events survey responses,
there is an area of coaching that I focussed
heavily on that is worth sharing. Often,
athletes came to me describing how they
were stuck, listing obstacles and challenges
that held them back from achieving their
goals and reaching the next level in their
sports career.
I would interview these potential clients,
sometimes for hours, to figure out if
we could work together. That decision
would essentially be based on one thing:
can this athlete adopt mindset changes
that will allow them to do what is needed
to progress?
The problem is, many of them believed their
mindset couldn’t change. They believed
their skills and intelligence were innate and
that there was nothing more to learn. These
were the athletes I couldn’t help.
‘The thing that separates the best from
the rest is mindset’ - Bianca Andreescu,
2019 US Open Champion.
Psychology Professor Carol Dweck from
Stanford University has examined the
notion of mindset, and argues that there are
two fundamental mindsets that people use:
the fixed mindset and the growth mindset.
Those with a fixed mindset believe they are
born with a certain amount of intelligence
or talent, and these abilities cannot be
improved. A fixed mindset is characterised
by the interpretation of situations as
unchangeable. It leaves little or no room for
personal agency. In jobs, relationships, and
daily operations, challenges are absolute.
How one engages with those challenges
(and their perceived level of agency within
them) will influence further behaviour.
Meanwhile, a growth mindset is not
as limiting as a fixed mindset. People
that possess a growth mindset believe
abilities such as intelligence, skills and/or
athleticism can be improved through hard
work and persistence. People with a growth
mindset understand that they can work to
change themselves and their surroundings
if they put in the time and effort. They seek
out challenges, are persistent, learn from
feedback, and are inspired by the success of
others. They avoid seeing things in binaries
(good/bad, win/lose, success/failure),
and see skills or mastery as the result of
practice over time.
People with a growth mindset generate a
capacity for lifelong learning and constantly
strive to improve.
When presented with an obstacle, those
possessing a growth mindset tend to rise
to the challenge. If you doubt yourself, you
already lost half the battle. A fixed mindset
can make you fail before you even start, and
you might find yourself giving up early, at
the smallest sign of frustration.
Have you ever said to yourself, “I’m never
going to ” (learn valuation
techniques/understand business
fundamentals/read charts/etc.) ?
This is a fixed mindset statement. People
with a fixed mindset see things as largely
unchangeable, and if they are changeable
not worth the effort. With a fixed mindset,
you don’t have a chance to develop your
potential.
Instead, try rewording this into a growth
mindset statement.
“I don’t know how to value an individual
business YET.”
This simple rephrasing gives you the power
to develop your abilities through dedication,
perseverance, and the right strategy.
Dweck explains, “Mindsets are just beliefs.
They’re powerful beliefs, but they’re just
something in your mind, and you can change
your mind.” Dweck created this 4-step
process below and I recommend anyone
experiment with it.
How to Shift From a Fixed to a
Growth Mindset
- Step 1: Learn to hear your fixed
mindset “voice.”
- Step 2: Recognize that you have a
choice.
- Step 3: Talk back to it with a growth
mindset voice.
- Step 4: Take the growth mindset action.
Having a growth mindset will also help you
in other areas of your life. What areas of
your investing, health and fitness, career,
relationships do you want to shift from a
fixed to growth mindset?
The only way you can change your mindset
is by entering the growth stage and leaving
your comfort zone behind. Try new ideas,
try different approaches and be curious.
“Insanity is trying the same thing over and
over and expecting the same results.”
- Albert Einstein
Becoming a better investor, a better
partner, a better colleague, and a better
human, really comes down to the power of
changing your mindset, both consciously
and subconsciously.
Doing so can have a profound impact on your
happiness and your pathway to success.