Your Attitude is More Important Than Your Paycheck

Soccer in Africa.  No grass, no nets, tattered ball, some have shoes.  Still fun!
Soccer in the shadows of Kilimanjaro

After my recent interview on the Dough Roller Podcast, a listener named Jim left this comment:

“I do not wish to diminish the success of your guest, because they have done what few are willing to do. Yet, anyone that makes $180k a year can well afford a high savings rate. Yes, they saved in their early years when they made much less, but it’s the high income, not the savings rate that is making early retirement possible. Let’s hear from families with average household income of $50 – $60k.”

I responded to the commenter directly, but this way of thinking keeps gnawing at me.  It illustrates the biggest reason why most people will never build wealth and achieve financial independence.  Changing this way of thinking is one of my primary motivations for sharing our story.  It is why people stay wage slaves the vast majority of their lives.

Poverty Mentality

The poverty mentality is not to be confused with real poverty.  The poverty mentality is when you think like you are poor.  It permeates very deeply to the root of who and what a person is.

The poverty mentality makes a person focus on what they don’t have rather than what they do.  When you don’t appreciate the abundance of life, you feel poor.  Life then becomes about always about wanting more.

The poverty mentality provides a convenient excuse for most people to not save money.  The average American saves about 4% of their income.  Even the top 10% of all earners save only about 12% of their income annually.  As most people make more money, they still “can’t” save.  When people have no money, they focus on inability to afford a house.  Once a person starts making more money, they buy the house they wanted.  Soon, they want a bigger or nicer house.  The same goes for cars, clothes, vacations, restaurants, etc.

The poverty mentality also makes people focus on why they can’t do things because they don’t make enough money.  Why not focus on making more money, which is in your control?  Develop a new skill.  Educate yourself.  Start a business.  Invest.  Bring value to the world!

I also see elements of the poverty mentality in extreme frugality.  It is why I have a love-hate-love relationship with the philosophy as I’ve written about before.  The math behind extreme frugality is absolutely correct and valid.  Live on only $10,000 a year and you can be “financially independent” on only $250,000.  The philosophy has inspired us to look at what is important in life in our journey to early retirement.

However, living on $10,000 a year would mean literally watching every single penny we spend.  For us, it would mean giving up things that bring us joy and fulfillment.   It would mean eliminating travel, changing our hobbies and decreasing charitable giving.  It would mean budgeting everything and living our lives around a budget, rather than deciding what we want and finding a way to afford it.  It is not our idea of living well.

Finally, poverty mentality is characterized by fear.  Many people can save money, but are afraid to invest it on a better life.  After all, you could lose your money if you put it in the stock market.  You could make a bad deal in real estate.  Better to hide your money under the mattress or put it in a savings account where it is “safe”.

With the poverty mentality you won’t have the courage to live the life that you want because you may not have enough money.  Why bother trying to retire early.  “You may run out of money.”  “How would you afford health care?”  “Do you know how much raising a child costs?”

Abundance Mentality

In Equador, going for groceries and bottled water doesn't involve an SUV or Walmart.
Going for groceries in Ecuador

The opposite of the poverty mentality is the abundance mentality.  It also permeates very deeply to the root of who and what a person is.  Once you develop it, the building of wealth is inevitable.  The abundance mentality forces you to take a step back and realize the abundance in which we live every day of our lives.

As we make more money we have little desire to go out and buy the newest iPhone, a bigger home or the expanded cable package.  We recognize that the phones currently in our pockets work fine for calling and texting, take amazing pictures, play our music, and have more computing power than the Apollo space ships.  We realize how ridiculous we already are with our 3 person family living in a 2,000 square foot house with a living room and a family room (what is the difference?) and a formal dining room that we use 2-3 times per year.  We are looking to downsize and become more efficient.  We realized that the basic cable package that we had was draining our time and brain power, so we cut the cord.

The abundance mentality allows us to focus on the infinite ability to earn more money by bringing value to others.  It allows us to focus on obtaining the things that are truly important in life and finding the money to pay for them.

We are building our early retirement plans with the abundance mentality.  We have never lived on a strict budget.  We don’t want to live the rest of our lives worrying about living on a budget where we can spend 4% of our investments (or any other arbitrary number) in a given year.  We embrace relative frugality and track what we spend on our very satisfying life.  We are building a plan that will allow us to continue to live as we always have.  We have built in the ability to spend more in retirement in case we didn’t budget enough for things that we value such as increased travel or paying for our own healthcare.

We realize what is and is not important in life and focus on those things that bring true happiness and fulfillment.  As we really pay attention to these things, we have found that life is a lot less expensive than focusing on all of the luxuries we have been taught that we need.

We have little fear of investing our money because we have educated ourselves on how the things we invest in work.  We are doing the things with our money that fit with our lifestyle and give the best chances of financial success.  However, we realize that life comes with no guarantees.  We will continue to learn and grow.  Even if we have it all wrong, we can simply go back to work and start over.

Why not try something different?  Why stay a slave to our jobs “just in case”? 

Developing an Abundance Mentality

A big key then to both building wealth and living a happier life is to shift from a poverty mentality to an abundance mentality.  Here are a few things that have been key for us.

A Different Perspective
Auschwitz Nazi Concentration Camp, Poland
Auschwitz Nazi Concentration Camp, Poland

It is easy as an American in today’s society to become numb to what poverty and struggle really are.  We are all “entitled” to have food, housing, healthcare and even cell phones provided for us.

Our travels have exposed us to real poverty.  Pursuing high altitude mountaineering objectives has taken us to some amazing and beautiful corners of the world.  However, the mountains that we’ve climbed are often located in areas (Africa, Mexico, Ecuador) of intense poverty.

It is also easy to miss what is truly important in life when watching modern “news”.  There are places in the world where people continue to be enslaved and persecuted.  However, our news tends to focus on stories like the newest drummed up political controversy or celebrity culture stories like Bruce Jenner’s gender identity and Tom Brady’s deflated footballs.

We’ve been humbled to visit WWII concentration camps where unspeakable atrocities were committed just two generations ago.  This has made us pay more attention than most when this type of brutality continues to occur today.

Seeing true poverty and understanding true suffering can be uncomfortable.  It has made us realize how ridiculous most of western society is.  No matter how much we have or how good we have it, many people will manage to want more and find reasons for unhappiness.

We’ve embedded several pictures throughout the post to drive home these points and hopefully make you think.  Take a look at the kids playing soccer in Africa where most have no shoes, there is no grass, no nets, and often they use some makeshift ball (yet they still all came out every day and had a blast playing).  Consider that in rural Ecuador, going for groceries with the kids doesn’t involve a Whole Foods or your SUV.  Imagine the brutality, filth, fear, and oppression that many people have and continue to live in simply because of their race, religion or place of origin.  Then take a step back and count your blessings.


It is very hard to live in American society and not want more and more.  We are constantly bombarded by images of people showing us how great their lives are and advertisers trying to sell you stuff.

Everyone posts pictures and descriptions of their awesome trip, new clothes or fancy car on Facebook and Twitter in real-time.  We never see pictures of them sitting in their cubicle for 50 hours a week to afford it.  Nobody posts their credit card bills coming in the mail the following month.

Advertisers are everywhere directly and subliminally telling you what you want and need.  The cookies on your computer even allow the advertisers to stalk you.  Look at an item on one website and watch it follow you around in the side bar of all the other sites you visit, just in case you really did want to buy it and just forgot.

Enough is enough.  Just step back from your electronics and live a little bit.

Attitude of Gratitude

Finally, I will leave you with this simple and practical challenge. Start and end every day with a few minutes of gratitude.  Literally say out loud three things that you are thankful for.  This will refocus you to what is valuable and important and away from the many distractions and frustrations that are inevitable in any day.

This simple act of taking a few minutes has been invaluable to both wealth building and living a happier and more satisfying life (which is really the only point of building wealth anyway).  This has been especially rewarding as we now do this as a family every night after reading our daughter bed time stories.  (I got to play with my friends!  I went to the playground with Daddy!  I got to color with Mommy!)

We started doing this with her before she even understood because we wanted to teach her to be grateful.  Now that she gets it, listening to her is actually a huge reminder to us of what is important in our abundant lives.

How important do you think attitude is to building wealth and achieving financial independence?  Are we right or is it really just about how much money you make?  Share your thoughts below.

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23 comments on Your Attitude is More Important Than Your Paycheck

  1. my 2 cents… listener and commenter “Jim” Doesn’t get it.. When you break down your attitude and look at the fact… It doesn’t matter if you make $50k or $150K a year.. The savings rate is what counts.. Generally when you make more you spend more so your outflow is higher anyway.. But as a human.. our needs for Food, Water, and Shelter are the same… Meeting those and saving money is still practical for EVERYONE..

    I hope someday people realize this and understand it… Even poor people can change their life with the right attitude on saving and making changes to how they live each day… Early retirement is not just for the “rich people”


    To your average income saver.. on his way to FIRE..

    1. Agreed Tim.

      Obviously, making more money is beneficial to allow you to accumulate money faster and overcome mistakes. However, it is only one piece of the puzzle. The stats about savings rate cited in the article demonstrates this on a large scale. Our example is a perfect case study.

      We figured out how to live within our means even while making peanuts and working our way through college. We started saving 50% of our income when we made a combined $70k/year. We increased our savings rate from about 50% to 70%+ at the same time that our income dropped by about $30k/year after Mrs. EE dropped to part-time work after having the baby.

      Unfortunately, the people that most understand this are already doing it and the people that most need to hear this message are too set in their way of thinking to even consider it.


  2. I very much agree with this article, but would point out how hard the cycle is to break. Consider the one who has become enlightened to life’s abundance yet family and friends have not yet. It is hard as I grow to appreciate less is more and those around me still beg to go out and spend like there is no tomorrow. I hope by being a good example it will have a positive effect on those around me sooner rather than later.

    1. No doubt it is a hard cycle to break. Look at our 3 suggestions for changing your perspective from poverty to abundance mentality. Essentially we have to “un-brainwash” ourselves to get out of the herd mentality that we are all taught to follow.

  3. This is a great article. It really is all about attitude. I’ve known people who lived through the Great Depression and, although very wealthy, live as if they have nothing. Meanwhile, there are others who make a $200k+ a year and yet live paycheck to paycheck. Neither extreme seems enjoyable to me, because both seem to be living in fear of what may happen to their money in the future.

    Recognizing that life is beautiful now, and focusing on how you can make a difference in the world, can certainly help to eliminate the fear of losing money.

    Thanks for writing! I’m glad I came across this on RockstarFinance.

    1. Thanks for taking the time to comment. I really have nothing else to add to that b/c you summed it up about perfectly!


  4. For most most of the time people, I think neither extreme frugality or profligacy is a good fit and likely to lead to sustained happiness. How about simply being sensible and conservative about money?

    Earning more is always a good strategy to couple with aggressive saving. One difference though is earning more often requires an upfront investment, which many people lack or shouldn’t put at risk. I also like to point out that saving a dollar puts a full dollar in your pocket while earning another dollar may put only 75 cents in your pocket after government takes its chunk. Still, earning more theoretically has no limit, while even the most extreme ‘frugalitarian’ can only save so much!

    1. Everything is relative and it is all a matter of perspective.

      Many people would consider our case extreme frugality. We laugh at that and consider it living purposefully and sensibly.

  5. This message is so, so important, and like you said, those who get it are already living this way, while those who really need to hear it aren’t ready to hear it. We have such a collective feeling of scarcity in this country (which is completely absurd of course, since we have more of everything in abundance than any culture in history), but people always focus on those above them on the socioeconomic ladder. Why can’t we say to ourselves, “Wow, I have it so much better than plenty of others, and I am going to feel content and grateful for that”? Instead, it’s always, “I want what they have. I want the nicest house on the block and the most expensive car.” That thinking has gotten us into worse troubles than the paycheck-to-paycheck mess many Americans live in — urban sprawl, global warming, child labor, anyone?

    1. To steal the MMM idea, it makes it a bit more rewarding to think that in the process of helping others see the path to early FI and achieving better lives individually we are doing our little piece to save the world from itself.

  6. Great, great post. I recenlty visited an estate sale of a local businessman gone broke near where I work in the Portland area. Six million dollar house on the river, pool, hot tub, over 19,000 square feet, indoor basketball court, rock climbing wall, a theater stage, and furnishings “to die for” (what a joke of a saying that is…). I have no idea what this guy made a year, but he had built the house and lived in it for over 10 years. Must have made well over $50K or even $250k per year. Now he is broke, house gone, marriage destroyed, and according to reports, children don’t even like him much. It’s not just about the money…

    1. Sad story, but unfortunately not an isolated incident.

      Thanks for sharing.

  7. Great article. We share your philosophy of living purposely and examining how we spend and where we get value, versus completely cutting everything from our lives that give us joy.

    Good luck in your journey.

  8. Absolutely need to shift the way you see money and flip the internal money talk to get more of the things you want.

  9. Love the idea of a balanced life.

    I am believer in the tiny house movement and am currently building a tiny house. Obviously it is not for everyone and is rather extreme, but it certainly follows your theory of living with less, so that you can achieve a balanced life. I was interested to read that you are considering downsizing. I also feel bad living in 2400 sq. ft and only really using 800.

    Kudos to you and your family for not following the mainstream of more!

    1. We are not very extreme people by any standards (other than our unusually high savings rate). I’ve been intrigued doing some reading about the small house movement, but can’t see us getting there yet.

      We’re looking more at going from about 2,200 sq. feet to about 1,500 figuring we would actually use most of that space with much lower expenses including utilities, taxes, and upkeep if doing a simple apples to apples comparison.

      I love your idea of thinking outside of the box and breaking the herd mentality though if it works for you.


  10. Just found your blog off of JLCollins introduction to his stock series. I like this post on Attitude. It came at a good time for me as I just watched the Netflix documentary Living on a Dollar a Day about 2 international studies students living in Guatemala in a village in poverty. Their goal is to survive like many in the village on a dollar a day.

    1. Sounds interesting, I’d like to check that documentary out. I definitely think that wealth building is very much about attitude and a little change in perspective can go a long way. Thanks for the positive feedback and glad you found this useful.

  11. No question we try to judge our standing relative to others. But whenever I get the urge to feel sorry for myself, I recall the many WWI and WWII documentaries I’ve seen depicting the incredible hardships imposed not just on soldiers but civilians. Usually snaps me out of it.

    Others have pointed out average house size has doubled since the 1960’s with more stuff than ever. Yet I’m old enough to remember that most folks in the 1960’s thought they were doing well. I definitely blame advertising for creating unrealistic aspirations and unwarranted frustrations. I’m sure much of the dissatisfaction low income folks feel comes from constantly having their noses rubbed in their relative poverty. Which is why I advocate more critical thinking in our educational system to be directed not just at media but advertising especially.

    Expats to other developed countries have noted that keeping up with the Joneses and consumerism in general is much less intense than here. And that those foreigners are at least as if not more happy than we are.

    1. Agree Steve. One of our best investments has been traveling the world and seeing what true hardship looks like. It gives perspective that is unfortunately lacking in much of our society.

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