Do you wonder why people win the lottery, and a few years later, end up buried in debt?
Have you met someone who’s broke, and 5 years later, is still broke?
Maybe you’ve been trying to grow your wealth for years, and it seems that nothing you’ve tried has worked?
Financial thermostats are the explanation to all of the above questions. I explain about financial thermostats in this video.
HOW A FINANCIAL THERMOSTAT WORKS
A financial thermostat subconsciously moves you back into your comfort zone.
Let’s say your comfort zone is $50,000. Whenever your money drops below that level, you start to feel uncomfortable. You work harder and cut back on your expenses to return to your comfort zone.
But it also works the other way. What if you get a bonus at work, or an unexpected inheritance, and your bank account balance goes from $50,000 to $70,000?
Subconsciously, you’re uncomfortable with that extra money. Deep down, you believe you don’t deserve it or you’re not able to handle it. So, you think of ways to lose it.
Whenever my parents would have a good year on the farm, and more money would come in than usual, they’d justify spending it. They’d spend it on the kids, on a new house or a new vehicle. They’d say, “We need a new tractor. We’ve been driving the same one for 7 years and we need to upgrade our equipment.”
You might think these excuses are perfectly rational, but the truth is, their subconscious mind is influencing their decisions to bring them back to their financial comfort zone.
Think about your net worth. Has it stayed the same for the past several years, and if so, do you think that’s a pure accident? It’s not.
Think of a thermostat in a room. You can open up the doors to let in the hot air, but the thermostat will counteract it. If it’s set to 22 degrees, that’s where the internal temperature will stay.
Similarly, you can open yourself up to new business opportunities and let in the money, but your financial thermostat will counteract your actions and keep your net worth where it already was.
You won’t increase your net worth unless you first increase your financial thermostat.