“KILL your Money Demons!” Shift to an Abundance Mindset with These Money Lessons! w/ Mark Matson

Added: Oct 3, 2024

The Flawed Methodologies of Investing

Matson critiques traditional investing methodologies, emphasizing their reliance on predicting the future, which is inherently uncertain. He argues that the best investment one can make is in oneself rather than in a financial portfolio. This perspective is rooted in his reflections on the American Dream, shaped by contrasting beliefs about money from his father and grandfather. While his father championed hard work and entrepreneurship, his grandfather viewed wealth as synonymous with greed. This dichotomy illustrates how differing mindsets about money can significantly influence life experiences and opportunities.

The Scarcity Mindset

Matson highlights the prevalence of a scarcity mindset, particularly among the 64% of Americans living paycheck to paycheck. Many individuals view money primarily as a means of survival, a perspective deeply rooted in human history. However, he believes we now inhabit a world characterized by relative abundance and creativity. To transition from a scarcity mindset to one of abundance, individuals must alter their mental frameworks or "screens" through which they perceive money and life.

Understanding "Screens"

Matson defines "screens" as mental models that shape perceptions and beliefs about money. These screens often go unrecognized, appearing as absolute truths rather than constructed beliefs. He emphasizes that negative beliefs about money, or "money demons," are common and can hinder personal growth and financial success. Matson shares his own experiences with money demons, such as believing that employees are untrustworthy and that he is not a good manager. These beliefs can become self-fulfilling prophecies, preventing individuals from pursuing opportunities that contradict their negative beliefs.

Confronting Money Demons

Confronting and overcoming money demons involves recognizing the benefits of holding onto them, even if they are ultimately detrimental. Matson encourages individuals to analyze their complaints about money, identify the underlying beliefs, and challenge those beliefs by seeking evidence that contradicts them. This process can lead to personal growth and a healthier relationship with money.

The Destructive Cycle of Wealth

Matson introduces the concept of the "destructive cycle of wealth," which begins with basic human needs and progresses through a cycle of desire, acquisition, and comparison. He argues that money cannot bring true happiness because it does not fulfill deeper spiritual needs. Instead, a sense of purpose and value in life is essential for genuine happiness. He notes that many wealthy individuals are unhappy, as there is no direct correlation between wealth and happiness.

Aligning Financial Goals with Purpose

Matson emphasizes the importance of having a purpose that transcends money. When individuals align their financial goals with a greater purpose, they can find fulfillment and joy in their lives. He cites historical figures who have changed the world through their strong sense of purpose, suggesting that this is a more reliable source of happiness than wealth alone.

Love Over Money

Matson shares insights from his experiences with two marriages, emphasizing the importance of finding a partner who values love over money. He reflects on how Melissa initially hesitated to date him due to his financial status, fearing that it would lead to a relationship driven by money. However, she reassured him that she didn't need his money and was focused on building a loving relationship. This foundation of love over financial concerns has been a significant aspect of their relationship, allowing them to navigate conflicts about money without it being a central issue.

Open Conversations About Money

Matson discusses the importance of having open conversations about money before marriage. He suggests that couples should define their purpose for money and ensure that their values align. For him, the purpose was to create love in the world, while for Melissa, it was about family. This synergy helped them work through challenges, including Melissa's belief that her value was tied to her job, which stemmed from her past marriage. Matson highlights the need for trust in relationships, especially when one partner has been wounded by previous experiences. Building trust takes time, therapy, and consistent actions that match words.

The American Dream Reimagined

Matson defines the American Dream as a vision for one's life that involves investing time, energy, and money into personal growth and helping others achieve their dreams. He stresses that the best investment one can make is in oneself, advocating for personal development and self-reflection. Matson acknowledges the need for balance in life, particularly as he reflects on his own journey and the importance of spending quality time with his wife, Melissa.

Overcoming Self-Doubt

Matson addresses the issue of self-doubt and the limiting beliefs that many people face. He encourages listeners to work hard, be present, and listen to others, as these qualities can add significant value to relationships and personal growth. He believes that anyone can make a difference by being a good listener and reflecting back what others need.

Critique of Common Investment Practices

Matson critiques the common practice of predicting market trends and stock picking, which he refers to as "prediction syndrome." He argues that successful investing should be based on academic studies and a diversified portfolio rather than speculation. He advises against toxic investments, such as Bitcoin and hedge funds, which he believes do not provide real value. Instead, he recommends building a globally diversified portfolio that includes a mix of equities and fixed income.

Building a Diversified Investment Portfolio

Matson outlines the importance of creating a diversified investment portfolio. He recommends using a combination of index funds across various asset categories, including equities from emerging markets, Asia, Europe, and the United States. He stresses the need to include small-cap and value stocks, rather than focusing solely on large-cap stocks like those in the S&P 500. Diversification helps mitigate risk and can lead to more stable returns over time. He also mentions the necessity of rebalancing the portfolio periodically to maintain the desired asset allocation.

Finding the Right Financial Coach

Matson discusses the challenges of finding a trustworthy financial advisor. He advises listeners to seek out fiduciaries who prioritize their clients' best interests and to eliminate commission-based structures that can lead to conflicts of interest. It’s crucial to find a coach who understands academic investing principles and can guide clients through the complexities of financial markets. Matson warns that even fiduciaries can make mistakes, so it’s essential to find someone disciplined and willing to provide honest advice, even if it means potentially losing a client.

Emotional Decision-Making in Investing

Matson delves into the emotional aspects of investing, explaining how fear and greed can lead to poor decision-making. During market downturns, investors often panic and make impulsive choices that can harm their long-term financial health. He argues that having a coach or advisor can help investors stay disciplined and focused on their long-term goals, rather than succumbing to emotional reactions. Matson emphasizes the need for a systematic approach to portfolio management that considers both the science of investing and the psychological factors at play.

The Self-Discovery Journey of Investing

Matson highlights that investing is not just about financial returns; it is also a journey of self-discovery. Understanding one’s values, beliefs, and emotional triggers related to money can lead to more informed investment decisions. He encourages individuals to reflect on their relationship with money and how it impacts their overall life goals. By gaining insight into their motivations and fears, investors can create a more aligned and fulfilling investment strategy.

Understanding the Psychology of Money

Matson discusses the psychological barriers that people face when it comes to money. He emphasizes the importance of addressing these issues to develop a healthier relationship with finances. Many individuals are not taught how to manage money effectively, leading to anxiety and poor decision-making. By educating themselves about the psychological aspects of money, investors can overcome these barriers and make more rational choices. Understanding the emotional side of investing is just as crucial as mastering the technical aspects.

The Three Truths: God, Love, and Freedom

In a reflective moment, Matson shares his personal philosophy, encapsulated in three truths: the reality of God, the importance of love, and the value of freedom. He believes these principles are fundamental to living a meaningful life and making a positive impact on others. True greatness, according to Matson, comes from inspiring others and leaving the world a better place than one found it. Relationships and love ultimately matter more than material success.

Caution in Startup Investments

Matson advises caution when it comes to investing in startups, particularly for those who are not financially secure. He suggests that individuals should have a solid financial foundation, including at least a million dollars in assets, before considering high-risk investments like startups. He likens investing in startups to gambling, where the majority of ventures may not succeed. Matson encourages potential investors to be aware of the risks involved and to prioritize more stable investment options until they have achieved a certain level of financial security.