Our Natural Tendency
Scarcity and abundance are present in every situation; our perspective decides which prevails.
I feel like the country and western singer who introduces his next song by mentioning he sees a lot of himself in it and “you might too.” Fortunately, it is an upbeat tune with a hopeful ending.
Life encourages an inclination towards scarcity. While no longer cave dwellers clubbing bears for sustenance, we must obtain and responsibly steward resources to acquire what we need today and in the future.
The scarcity mindset is born out of fear and a survival instinct. You focus on what you lack and fear losing what you have under the belief you cannot recover anything lost or obtain more. The abundant mindset is confident and contemplates favorable results; it sees promise in every situation and anticipates gain.
Scarcity impairs joy and our potential for accomplishment more than it hurts us financially. Fortunately, we can learn to identify scarcity and employ measures to reduce its presence and impact.
The Effect
Instead of preserving resources, scarcity creates loss by discouraging investment in value. You purchase a cheap refrigerator with a higher cost of ownership because it requires more repairs and replacement sooner than a quality one. Instead of focusing on total return, you purchase government bonds to avoid loss of principal and forgo the significantly higher returns provided by a properly diversified portfolio.
Note the similar spelling of “scarcity” and “scared.” Seeing every action as a potential loss makes you think small, settling for getting by instead of prospering.
You do not risk your current job to pursue a promotion, a different career, or an entrepreneurial venture and deny yourself the growth and reward those endeavors could provide. Abundant thinkers know the new endeavor might not yield the desired result, but the ultimate outcome will be superior to remaining in place.
Scarcity also deprives you of pleasure by equating expenditure with loss. When you splurge for a hotel room with a balcony, do thoughts of the extra money spent prevent you from enjoying the fresh air and brilliant view? Even worse, regret reinforces the scarcity mentality. “I didn’t enjoy it; I shouldn’t have spent the money, and I won’t do it again.”
The loss from scarcity extends into our relationships. When you plan dinner with a friend, eagerly anticipating her undivided attention, are you bitterly disappointed when she invites someone to join you? Do you fixate on diminished companionship and fail to consider the “interloper” adding something wonderful to the experience?
Are you reluctant to invest in a relationship, fearing what you give is spent instead of invested? Was your unrequited love a tepid overture recognized and responded to for what it was? If you regard effort as an investment, the return is how it improves you in addition to or despite your partner’s response.
What to do?
The objective is not to eradicate scarcity thinking but to restrict it to its rightful purpose. There will be rainy days, possible retirement, and thieves of your time and energy. Scarcity makes us prudent users of our resources and prevents valueless investments.
We can lower our inclination towards scarcity by focusing on and appreciating what we have. When we dwell on what we do not have, we become even more protective of what little we perceive we have.
A mindset change begins by recognizing when scarcity arises. When presented with an opportunity, do you first or primarily consider the potential for loss?
Once aware, you counteract scarcity by directing your mind to the potential for gain. Consider how the choice could lead to a successful result and the reward for such success.
Invest at a level that compels abundance by requiring growth and utilization of your untapped potential (not recommending profligate spending or reckless investment decision-making).
Finally, completely accept your investment decision, emotionally release the resources, enjoy the balcony, and anticipate favorable outcomes.
Investments in value, even if lost, are not wasted.
Ultimately, we must remove scarcity’s limitations on our enjoyment and accomplishments by shifting our mindset from miserly preservation and loss aversion to the probability of gain.
