Achieving your goals depends on a lot of factors: You might be able to control some, but in some others, you won’t. One you can influence is your mindset. Whether you have a fixed or a growth mindset will influence your ability to overcome challenges to achieve your goals.
In her 2006 book, Mindset: The New Psychology of Success, Carol Dweck, an American psychologist, theorized the concept of fixed vs. growth mindsets. And how adopting a growth mindset might help you, in all aspects of your life, to achieve your goals. But what exactly is the theory?
What are fixed and growth mindsets?
Fixed mindset
When people have a fixed mindset, they believe that their abilities are innate. They are convinced that there is nothing they can do to change what skills and abilities they have or don’t have.
For example, parents might praise their children for their intelligence when they obtain good grades at school. Later in life, the adult that the child has become might have internalized that intelligence is part of his identity. If a school or a work project demands more than they are used to (i.e., success is not immediate), they are likely to perceive the project as too difficult, unfair and accept that they could never succeed. Therefore, to avoid being in such situations, people with a fixed mindset might be less willing to take risks that could challenge their skills and expose them to potential failure.
People with a growth mindset are also in general seeing challenges as rewarding because they tend to see them as an opportunity to grow and become better.
Growth mindset
On the contrary, people who have a growth mindset believe that they have the ability to influence their skill set, thanks to hard work, perseverance, and time.
Going back to our previous example, a child who was praised for hard work every time they bring good grades home is less likely to consider that their success at school is a result of innate intelligence. Similarly, failing on a test will probably question the efforts put into studying rather than questioning their intelligence. People with a growth mindset are also in general seeing challenges as rewarding because they tend to see them as an opportunity to grow and become better.
Are we either one or the other?
If you recognized yourself in a fixed mindset, you might think that it is doomed. But don’t worry, as, with other beliefs, your mindset can be shaped and evolve over time.
A growth mindset can be learned at any stage in your life, but the sooner you start, the easier. Compared to a fixed mindset, a growth mindset can help you:
- See failures or setbacks as steppingstones
- See learning opportunities at every corner
- Develop new skills throughout your life
- Achieve more ambitious goals for yourself, etc.
What about investment?
When you get started with investing, as with every new skill, there will be setbacks, areas where you don’t know enough, or mistakes that you will make. But this is not the end of the world: This is where fixed vs. growth mindset comes into play.
People with a fixed mindset might be hesitant to take the leap to start investing, feeling like they don’t know enough or that they would never be able to bounce back if they made an investment mistake.
However, having a growth mindset could help you:
- See investing as a new challenge, a new mountain to climb
- See when you don’t have enough knowledge and want to seek more
- Know when it’s time to call a professional
- Know that one mistake is not the end of the world
That is why at i-vest we believe that everyone can achieve a growth mindset.
Our aim is to make financial knowledge available for everyone that is interested and to help people get started on their investment journey.
To achieve this growth mindset in investment and learn a new skill, you might also want to take our free Masterclass: A two-season email series that decodes the fundamental principles of investment.
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