Louis (Luis) Barajas presents a "Financial Mindset Hierarchy" that describes five ascending mindsets people hold toward money: Survival, Struggling, Stability, Success, and Significance. He explains characteristic behaviours and concerns at each stage (e.g., immediate needs in Survival; tax/withholding and paycheck-to-paycheck in Struggling; steady job and modest savings in Stability; material attainment but lack of fulfillment in Success; and philanthropy/meaning in Significance). The talk emphasizes shifting from short-term thinking toward long-term, delayed-gratification strategies to reach financial significance and life purpose.
Chapters
Hey everyone, this is Luis Baragas. Today I'm going to share with my financial mindset hierarchy. It's been a tool that I've been using for a couple decades now to have people to start thinking more long term versus short term, to basically build financial significance in their life. I want to start with you with the different stages that I've worked with people throughout my lifetime. And we'll start off with people who are really struggling, but, excuse me, that are in the survival mode. And when there are people in survival mode, they are not worried about having success or significance. They're worried about today in the survival mode, they may not have a roof over their heads. It may be living in the shelter. They're thinking about where they're going to eat. They're even thinking about where they're going to go to the bathroom. I mean, they're in the survival stage. They're thinking about right now. And so it's really hard to work with someone once if you can't get them out of that stage. And so it's. It's very complicated. So this is kind of where the government comes in, social services come in and we try to get them help to get them past that because it's complicated. The brain is wired to basically survive. And so it's hard to help people who are in that stage unless you can get them out of that stage. The next thing is that we have is people who are actually are struggling, who are out there, maybe a lot of single parents who are not earning a lot of money, having to take care of a family and are barely making it. They're not putting any money away in the 401k. They're claiming 10 on their withholding. So they have no taxes taken out because they need every single penny to live. Some from sometimes from week to week or month to month. As we move up the scale, we started seeing that we work with clients also who have been on that stability mindset, meaning that they've got a steady job, they're earning a decent income, that maybe they don't own a home, they're renting, they, you know, enjoying life. They go out to, to eat, maybe not to the fancy restaurants, but they've got some stability. They've got a little bit money putting away a little bit of money in their 401k, but they're still, still not thinking too long term. They're still kind of focused on right now and this month and maybe the next quarter. Then I have clients that come to me that are Already in the success stage. What does that mean? They're maxing out their 401k, they, they bought their home, they're driving the car that they want. But it's interesting that if you were a fly on the wall when we have these meetings, the conversation that we're having or the conversations that they're having with me is at the same he Lewis, you know, I earn in one year more than my parents ever earned in a decade. I live in an incredible neighborhood, I have this really big house, drive this really fine car, but I'm not happy. And you would think that if you had all these material things that you would be happier, but they're not. They're still looking for something else. And what is that? I think it's something that we all look for is that self actualization where we have significance in our life. And I've called that I from day one when I wrote my very first book, the Latino Journey to Financial Greatness. And that's financial greatness is really another word for significance. It's people who gotten to a point where instead of focus on material things, they've built enough wealth where they're philanthropists, they want to give back. It's not about them anymore. It's about giving to others. And you see that a lot. And so what I do is I take people here who are not happy, who create a certain level of success that we focus on making their money create more for insignificance in their lives. But at every single stage, we're always focused on not short term, instant gratification. We'll focus on how do we build more of a long term delayed gratification to get us to not from this step to this step, this step to this step, this step to this step. I'm working with clients that are in the struggle, stability, success stage to try to get them directly over here, all the way up here. Okay. And so you should now think about how do I get to the next step? It's almost how do I bypass to go to financial significance? And you can actually have that now. A lot of the financial life healing coaching that we're doing is that's the mindset that we're trying to create so you can reach that level of happiness and meaning and purpose in your life without having to go to that success stage where you say like, is this all there is? See you next time.
