Overcoming Scarcity Mindset: Dropping Cheapskate Asian Immigrant Habits
I’ve learned a lot about myself the last 3-4 years. I’ve grown a lot I think. Shaken off a lot of bad habits & harmful mindsets holding me back. But one that I just can’t shake is my frugalness and over-optimization, stemming from a scarcity mindset.
I’ll spend an hour trying to find a hotel room $20 dollars cheaper. I’d walk to another ATM to save myself a $5 usd fee. I’d drive around an extra 30 minutes to save on parking. Doing an extra 8 hour layover to save $250 usd on airfare.
It’s good to be frugal. It’s good to hate wastefulness. These are great habits to have. But it’s dumb when it gets in the way of bigger deals and opportunities. Or when you waste time.
All those behaviors are left over from the time when I had NOTHING. When I was coming up in the world and only had enough money to choose lunch or dinner. Try living on a $25k usd annual salary in San Francisco. Before taxes btw and as it is W2 income, no tax breaks either. Granted this was 24 years ago but it was not easy back then either.
But times have changed. And when I ask myself the question that my therapist asks me: “How does this serve you now?”
I’d say NOT very well. Now I don’t want to be the guy who looks at everything through the frame of money and optimizes for it. But it’s a good filter to use an ideal per hour rate to judge whether you should spend time on something. Mine is a minimum $1000 USD an hour.
My rule is I either make that rate or I outsource that to someone else. Otherwise, I’m spending time either getting paid my rate or else I am doing something I enjoy. Things like reading, watching some interesting documentaries or listening to podcast shows or family time with my kid.
Some exceptions: I do my own laundry and wash the dishes because I actually enjoy the meditative aspects of it. I’ll do paid public presentations/workshops, government startup program mentoring for below that rate because I find these fun and educational. I also really enjoy talking to and trying to help startup founders.
Now I’m not telling you to go big and spend like a billionaire or multimillionaire, buying the mansion, private jet and sports cars, the bespoke expensive clothing. Do it if you can afford it and really love these things.
As I’ve written before, I just really love international travel, good food and lots of books. That and supporting some awesome charities like World Central Kitchen, Feeding America, International Rescue Committee and Room to Read among many others. If you are lucky to have done well, it’s an absolute MUST to be generous with my friends and family. I’ll always pick up the tab.
I also love investing in startups, emerging fund managers and other interesting business international opportunities. That’s the juice for me. And of course, the goal of all this, making sure I have the financial wherewithal to work with whoever, whenever and wherever I want.
So make sure you are willing to spend the money on the awesome conferences or mastermind groups. It’s an investment. I’ve gotten tremendous value at relatively expensive events like Capital Camp or Leveling up Masterminds (LA & Miami) meetings and learning from like-minded people. It’s ultimately an investment in your personal growth as a businessperson and tax deductible as a business owner to boot.
Because of this, I’m learning to spend the money more freely with an investor’s mindset, when it saves me time or prevents complexity and trouble. Time I can better use doing something else either profitable or more fun. Also this is with the understanding that money is recoverable but time is probably the world’s most perishable asset.