Money Mindsets and Poverty Consciousness

No doubt you’ve heard multiple coaches in a variety of industries, from business to manifesting, talking about the magical money mindset: your unique set of beliefs and your attitude about money and how they drive the decisions you make about saving, spending and handling money.

These coaches promise to help you decondition yourself from holding negative beliefs about money which will allow you to amass wealth, whether by law of attraction, or by simply changing your habits around money itself.

There’s a number of problems with the concept of a money mindset which I will break down in detail in this post, but first, we need to understand where this thing came from in the first place.

Think and Grow Rich

Perhaps the person who popularized this idea was Napoleon Hill, the author of a little book published in 1937 that most of your coach buddies have probably read, called Think and Grow Rich.

From the Amazon description:

“Think and Grow Rich has been called the “Granddaddy of All Motivational Literature.” It was the first book to boldly ask, “What makes a winner?” The man who asked and listened for the answer, Napoleon Hill, is now counted in the top ranks of the world’s winners himself.


The most famous of all teachers of success spent “a fortune and the better part of a lifetime of effort” to produce the “Law of Success” philosophy that forms the basis of his books and that is so powerfully summarized in this one.


A bestseller since it was originally published in 1937, this hardcover edition of Napoleon Hill’s Think and Grow Rich teaches the famous Andrew Carnegie formula for money-making, based on the 13 proven steps to riches.


One of the most popular personal development and self-improvement books of all time, Think and Grow Rich has sold over 100 million copies worldwide since its first publication during the Great Depression. In it, Napoleon Hill presents a “Philosophy of Achievement” in 13 principles drawn from the success stories of such greats as Andrew Carnegie, Henry Ford, Thomas Edison, and other millionaires of his time.


Think and Grow Rich reveals the secrets that can bring you fortune. By suppressing negative thoughts and keeping your focus on the long term, you can find true and lasting success.”

Now, we will get into the problems of the philosophy behind Think and Grow Rich in a bit, but first we should get into the problem of Napoleon Hill himself, starting with the fact that he never actually met Andrew Carnegie, and he has a long, documented history of being a total conman.

Here’s a video clip examining the history behind Think and Grow Rich and the lies it was founded upon.

Note:  I included this video in a post I wrote a few weeks ago on the Law of Attraction. I’m only linking to the segment about Napoleon Hill here, but should you decide to watch the entire video, its important to note that there’s some fundamental issues with some of the assumptions made, such as the fact that we really do have scientific evidence that our frame of mind does, indeed, affect physical health. You can read more about that here. He also makes the assumption that to be divine = omnipotence, which is not necessarily the case with spirituality, but it is a key belief behind the Law of Attraction. The point is, both people inside and outside of New Age belief systems fundamentally misunderstand spiritual concepts and then spread those misunderstandings to the masses.

“All of this sort of thing is very much a joke to anyone of average intelligence who has read as much advertising matter as have most Americans, and it is so preposterous to those who are familiar with the automobile business that it inspires a feeling akin to disgust.” –– Motorworld Magazine on Napoleon Hill’s college for auto mechanics.

Replace the phrase “automobile business” with “marketing and advertising” and it accurately expresses my feelings on the coaching industry. It’s purely a cosmic joke that Hill’s very next endeavor was to open up a school for advertising, quote, “intending to teach the principles of success and self confidence.”

Aside from the obvious fact that he was a conman and perhaps the first ever multi-level marketer, Hill sounds very much like a lot of people in the online business coaching industry today. It’s no wonder his book is so popular.

Much like his faithful followers, Hill capitalized on the economic vulnerability of his time: he published Think and Grow Rich in the middle of the Great Depression, notably during the Dust Bowl era. What better time to convince desperate people that they can solve their financial woes by simply changing their thoughts than when the entire country is in the throes of hardship.

Reminds me of a coach who used fear around pandemic economy uncertainty to push vulnerable people into purchasing her online courses. The amount of emotional manipulation being used on the sales page was ASTOUNDING.

About those negative thoughts…

As many of us are already aware, “don’t think negative thoughts” is your typical toxic positivity fare. If you watch the full video above and not just the segment on Hill which I’ve linked to, you’ll see that this notion started with the New Thought movement in the late 1800s and eventually mutated into the Law of Attraction that we know today.

I’ve already spent a great deal of time writing about the problematic issues with LOA, so I won’t waste any more words on it here, other than to say that the belief that our financial struggles are 100% self-imposed via our thoughts about money is deeply rooted in individualism and completely ignores very real issues of systemic inequality and the false scarcity imposed upon literally everyone by capitalism itself.

Learn about the problematic nature of Law of Attraction teachings.

Law of Attraction aside, the other obvious problem with Hill’s account of how rich men got rich is the complete erasure of the history of the working class and how the men in the book’s success could not have been achieved were it not for the thousands of laborers who toiled on their behalf, the cutthroat business tactics they utilized to get ahead, and the existing privilege from which many of them began. It’s hard to feel bad about making business decisions that harm others when you don’t allow yourself to think negative thoughts.

A conscience?! Who needs one of those…

Does a Money Mindset Really Exist?

If you were to listen to any typical business coach on Instagram, the root of your money mindset problems is a scarcity mentality which causes you to not invest in yourself or your business, so the solution to your problem is to feel more abundant so that you start spending freely with the belief that that money will come back to you via your business. Naturally, this benefits said coach because what they really want is for you to invest in is their services. How convenient.

If you were to listen to any financial coach on instagram, the root of your money problems is spending frivolously on $5 lattes instead of saving your hard-earned cash, so the solution to your problem is to be smarter about how you’re spending your money and spend less of it on things that provide instant gratification, and you will eventually save enough money to buy a house and retire! Funny how that’s the exact opposite approach that the business coaches are using…

At that micro level, yes, of course we all have beliefs and attitudes about money that shape the way we engage with it, and those beliefs and attitudes can absolutely affect the success –– or failure –– of your business.

 If you believe that people don’t value your services, you might price yourself so low that you’d have to work yourself to death to make any money.


If you don’t understand the value of a return on investment, you might never spend money that could end up making your business more successful in the long run.


If you don’t understand how to save money, you might run out quickly and your business will suffer.

A great real-life example of this was back when I was working for an early-stage fashion tech startup. They had a half million in funding, but the CEO spent frivolously. He would take the entire team out to lunch on the company dime on a weekly basis. He paid $2,000 to take an intern to an international business conference with the rest of the team. He was all about keeping up the appearance of a successful company on the day-to-day, but simultaneously stiffed our ad agency for $40,000, our development firm for $100,000, and eventually our own employees for two whole paychecks.

The money eventually ran out and the business tanked due to bad business decisions and an inability to garner further funding. The more he failed at getting funding, the more stressed he became, and the more toxic his attitude toward his employees and the more affected his business decisions were. He began making decisions out of fear, scarcity, and attempts to maintain control instead of making decisions based on data and expertise.

Coaches today take advantage of your own fears and vulnerabilities around scarcity and use them as a means to manipulate you into spending money with them.

You’ve heard the “invest in yourself” rhetoric and “charge what you’re worth.” But they’re not actually trying to get you to invest in yourself or heal your money blocks, they’re trying to get you to invest in their services, specifically.

Every ounce of “heal your money mindset” content is geared toward convincing you to sign up for high-ticket coaching. Their high-ticket coaching, or that of their friends. And in the process, they condition you into their own belief system about how charging ridiculous amounts of money for your own services means you value yourself more, which then contributes to accessibility issues, wealth inequality, and causes you to rape your own clients’ wallets just like your coach did to you. Abuse is a cycle, after all.

What is a scarcity mentality?

A scarcity mentality is very much coupled with social Darwinism and it’s a key factor in why capitalism is toxic. It’s the idea that there is a finite amount of resources –– i.e. clients, money, etc. –– and we are in competition with one another over those resources, therefore, we must find ways to accrue and hoard those resources for the sake of our own safety and survival.

It’s true that there are a finite amount of resources on the planet, however, many of those resources are renewable and if they were used consciously and collaboratively, there would be no reason to hoard or compete. That’s the logical fallacy in social Darwinism, and its the hoarding of wealth and resources by a small group of elite billionaires and millionaires which leaves so many other people struggling.

A huge study of 20 years of global wealth demolishes the myth of ‘trickle-down’ and shows the rich are taking most of the gains for themselves

People with scarcity mentalities have issues with feeling abundant because subconsciously, they heavily believe in the concept of scarcity and competition. In business, these kinds of people feel as though there isn’t enough business coming in and they aren’t going to survive. That makes them feel out of control, and this drives them to take actions that help them feel back in control –– typically things like hard sales coaching people through objections to try to bring in money so they can feel safe. These are hardcore root chakra problems.

The irony in it all is that many of these same coaches talk about how you need to have an abundance mindset in order to get rich while SIMULTANEOUSLY writing their own sales copy from a heavy scarcity mentality. What they’re actually doing is passing the buck for that scarcity onto you: their fear causes them to use manipulative and coercive sales copy to trigger your fear so that you will “invest in yourself” by giving them your money and that money makes them feel like there’s less scarcity. It’s emotional and financial vampirism.

Just like I’ve pointed out before with victim mentalities, some people actually are victims. They have been victimized by predators and abusers. And in that same vein, some people actually are in a state of scarcity, typically people who are subjected to systemic inequality and poverty.

When you are actually experiencing poverty, you don’t have a scarcity mentality, you have a scarcity reality.

That reality has very real consequences on your mental health and physical well-being, and the circumstances that create that reality are not within one’s individual control.

What is poverty consciousness?

Obvious Law of Attraction bullshit aside, there is actually evidence that a lot of people who grow up in poverty approach money very differently than those of us who don’t, but the root of that approach goes much deeper than just one’s beliefs or mindset. It’s actual trauma.

By and large, when people who grew up poor actually do get money, they are often more likely to splurge on something they couldn’t afford before, or spend it stocking up on necessities to last them through the next drought than save it.

The reason is their history of constant scarcity. Growing up, they never knew when money would be coming again, so they had to survive the best they could with what they had. That meant using it when you had it because it would be gone before you knew it.

Here’s 33 real life examples of how that occurs, courtesy of Buzzfeed and Reddit.  

Samantha Leal writes about her personal experiences for Marie Claire:

A study by Princeton researchers in 2013 called “Poverty Impedes Cognitive Function” found that those growing up with limited resources had a reduced ability to make better future decisions when it came to, well, anything. Because they already had to mentally make so many trade-offs (“Do I buy my kids bread or do I buy those diapers?”), they couldn’t deal with larger choices that were mentally taxing—which impacts savings, buying insurance, going for a mortgage instead of paying rent, etc. All things that could, eventually, help you into a better place financially.


“When you’re poor, you can’t say, ‘I’ve had enough, I’m not going to be poor anymore.’ Or, ‘Forget it, I just won’t give my kids dinner, or pay rent this month.’ Poverty imposes a much stronger load that’s not optional and in very many cases is long lasting,” co-author Eldar Shamir said. “It’s not a choice you’re making—you’re just reduced to a few options. This is not something you see with many other types of scarcity.”

From a mental health standpoint, when you’re in a position where you’re exposed to longterm feelings of helplessness where you cannot escape, such as occurs when one grows up in poverty, you can develop complex post traumatic stress (CPTSD). This is the result of the physical toll that stress exacts on the developing brain in childhood.

Learn more about how trauma affects the brain and body.

This physical effect on the brain creates a conditioned trauma-response any time we are faced with similar feelings later in life.

But this impacts decision-making on a larger scale, too. As someone who grew up with a small bank account (and have been working since the age of 15), when I got my first influx of cash — I spent it. The $800 that came from my grandfather after his passing when I was 22 and had just moved to New York City went to things I couldn’t buy before — a dinner out with my new friends, drinks with co-workers, and a trip to see my best friend in LA. Did it go to paying off those student loans? Nope. Not a cent.


As one journalist wrote, “When a windfall check is dropped in your lap, you don’t know how to handle it. Instead of thinking, ‘This will cover our rent and bills for half a year,’ you immediately jump to all the things you’ve been meaning to get, but couldn’t afford on your regular income. If you don’t buy it right now, you know that money will slowly bleed away to everyday life over the course of the next few months, leaving you with nothing to show for it. Don’t misunderstand me here, it’s never a ‘greed’ thing. It’s a panic thing. ‘We have to spend this before it disappears.’”


It’s true, those who grow up poor are actually more likely to spend—especially in times of crisis—than their wealthier counterparts. It’s not only because we lack the money management skills, but it’s psychological: We don’t want that money to just slip away, and we also want the things that can make us “normal” to others.


“I hear it from people all the time,” financial planner Katie Brewer told “They spoil themselves as adults because they’re making up for all the ways they felt deprived as kids.”


So what do we do? We spend on things because we “deserve them”. We save very little. And we don’t learn about things that could save us heartache in the long run— like 401Ks and IRAs — because 1) We need the money now and 2) That’s what “wealthy” people have, not us. ––

The Surprising Ways Growing Up Poor Has Affected What I Do with My Money, Samantha Leal,

For anyone who hasn’t experienced trauma, this type of behavior would simply look like people being irresponsible when in reality, it’s a cognitive dysfunction resultant from trauma. And it’s not even totally about the trauma response. The study found that even people who didn’t grow up in poverty behaved the same way under the same set circumstances as those who were poor.

Some insight from the aforementioned Princeton study into how poverty consciousness really operates:

Poverty and all its related concerns require so much mental energy that the poor have less remaining brainpower to devote to other areas of life, according to research based at Princeton University. As a result, people of limited means are more likely to make mistakes and bad decisions that may be amplified by — and perpetuate — their financial woes.


Published in the journal Science, the study presents a unique perspective regarding the causes of persistent poverty. The researchers suggest that by being poor may keep a person from concentrating on the very avenues that would lead them out of poverty. The researchers suggest that being poor may keep a person from concentrating on the very avenues that would lead them out of poverty. A person’s cognitive function is diminished by the constant and all-consuming effort of coping with the immediate effects of having little money, such as scrounging to pay bills and cut costs. Thusly, a person is left with fewer “mental resources” to focus on complicated, indirectly related matters such as education, job training and even managing their time.


“Previous views of poverty have blamed poverty on personal failings, or an environment that is not conducive to success,” she said. “We’re arguing that the lack of financial resources itself can lead to impaired cognitive function. The very condition of not having enough can actually be a cause of poverty.”


The mental tax that poverty can put on the brain is distinct from stress, Shafir explained. Stress is a person’s response to various outside pressures that — according to studies of arousal and performance — can actually enhance a person’s functioning, he said. In the Science study, Shafir and his colleagues instead describe an immediate rather than chronic preoccupation with limited resources that can be a detriment to unrelated yet still important tasks.


“Stress itself doesn’t predict that people can’t perform well — they may do better up to a point,” Shafir said. “A person in poverty might be at the high part of the performance curve when it comes to a specific task and, in fact, we show that they do well on the problem at hand. But they don’t have the leftover bandwidth to devote to other tasks. The poor are often highly effective at focusing on and dealing with pressing problems. It’s the other tasks where they perform poorly.”


The fallout of neglecting other areas of life may loom larger for a person just scraping by, Shafir said. Late fees tacked onto a forgotten rent payment, a job lost because of poor time-management — these make a tight money situation worse. And as people get poorer, they tend to make difficult and often costly decisions that further perpetuate their hardship, Shafir said. He and Mullainathan were co-authors on a 2012 Science paper that reported a high likelihood of poor people to engage in behaviors that reinforce the conditions of poverty, such as excessive borrowing.


“They can make the same mistakes, but the outcomes of errors are more dear,” Shafir said. “So, if you live in poverty, you’re more error prone and errors cost you more dearly — it’s hard to find a way out.”


“These findings fit in with our story of how scarcity captures attention. It consumes your mental bandwidth,” Zhongshan said. “Just asking a poor person to think about hypothetical financial problems reduces mental bandwidth. This is an acute, immediate impact, and has implications for scarcity of resources of any kind.”


“We documented similar effects among people who are not otherwise poor, but on whom we imposed scarce resources,” Shafir added. “It’s not about being a poor person — it’s about living in poverty.”


The researchers suggest that services for the poor should accommodate the dominance that poverty has on a person’s time and thinking. Such steps would include simpler aid forms and more guidance in receiving assistance, or training and educational programs structured to be more forgiving of unexpected absences, so that a person who has stumbled can more easily try again.


“You want to design a context that is more scarcity proof,” said Sharif, noting that the better-off people have access to regular support in their daily lives, be it a computer reminder, a personal assistant, a house cleaner or babysitter.


“There’s very little you can do with time to get more money, but a lot you can do with money to get more time,” Shafir said. “The poor, who our research suggests are bound to make more mistakes and pay more dearly for errors, inhabit contexts often not designed to help.” –– Poor Concentration: Poverty Reduces Brainpower Needed to Navigate Other Areas of Life,

(Interestingly, this is also why so many professional athletes go broke. Many of them grow up in poverty and athletics becomes their only way out. They succeed and make it into professional sports, but then have no idea how to manage the money they are given. “Champs” is a great documentary on this topic. They specifically focus on boxers Mike Tyson and Evander Holyfield. Watch Champs.)

Bored Panda documented 30 real life examples from Reddit users of how poverty creates more stress.

If that poverty trauma was recognized and addressed, as well as the circumstances which created it in the first place (read: wealth inequality as a result of rampant capitalism), then people raised in poverty might be able to manage money a little more wisely –– and they might not face the systemic disadvantages that keep them trapped in cyclical poverty in the first place.

Can a money mindset coach really help?

As it stands, no changes in thoughts and beliefs about money is going to change one’s brain’s trauma response to scarcity. This is classic Maslow’s Hierarchy of Needs in action: when we don’t have our basic survival needs met, we have little mental and emotional bandwidth to deal with higher cognitive functions.

“…we cannot willpower or mindset or shame ourselves into aligned, sustainable change and growth. Our nervous systems will fight like hell to keep us safe and if shutting down, dissociating, or numbing is the most viable option, we will be battling ourselves.” – Cassandra Solano, Trauma-Informed Therapist 

We have to look at the way that trauma is affecting one’s nervous system, and thus, their decision-making capabilities and work toward mitigating those affects before they can even begin to think about changing their thoughts and beliefs around scarcity.

This also means that no amount of changing one’s beliefs and attitudes will lift anyone out of poverty that is created by systemic oppression because they are actively being traumatized for so long as they exist within those circumstances, and as the adage goes, you cannot heal in the same environment in which you got sick.

The only exception to this, of course, is if changing one’s beliefs and attitudes result in having no morals or ethics, in which case, we can absolutely amass wealth much more quickly, and that’s exactly the sort of Kool Aid the coaching industry is serving you with their money mindset mumbo jumbo.

As you can see from the articles linked above — a lot of people with real money mindset problems aren’t hanging onto money, they’re spending it! So when a coach tells someone like that that they need to invest in themselves, they are actually manipulating that person’s trauma, not helping them heal it.

Most of them are just trying to sell you the Think and Grow Rich mindset, which has no basis in reality.

What should psychics and healers charge for their services? Here’s my thoughts.

As far as the financial coaches go, they are on the right track at least, but they’re missing the important context around trauma and systemic issues which means that they typically can’t solve the root of many people’s problems, either. For a person to make real change in their patterns of behavior around money, they need to do more than just change their thinking: they need to reprogram their nervous system’s response to financial stress AND they need the societal systems they rely on to better support them.

None of our beliefs and attitudes are going to make as much of a difference in how much wealth we amass as our existing class, racial, and gender privilege does, so we need to separate the two and understand that a “money mindset” is only going to affect an individual’s upward mobility to a certain degree, at which point those with privilege will always have a distinct advantage over those without.

Most of the approaches in the coaching industry only focus on the individual, not the systemic. And that’s okay –– to a certain degree, the individual is all any one person has any control over, however, if a coach does not understand this in the greater context of trauma and systemic oppression, the way they approach the individual problems may result in more trauma.

For example, if the coach in question uses any kind of rhetoric that blames the individual for their circumstances –– like shaming them for buying that $5 latte when that $5 latte was the thing they needed in that moment to help them cope with the stress of living their daily life in a state of restriction –– that doesn’t help their client. It only hurts them and further compounds their shame around being poor and reinforces the idea that they don’t deserve the same conveniences and luxuries that people with more money have.

It’s not altogether that different from the feelings that drive a binge eating disorder. You’ve restricted yourself for so long that you want to splurge and the splurge results in a lack of control. The solution to an eating disorder is to understand which emotions its compensating for while destigmatizing shame around food and eating, and you do that with the help of a qualified therapist who understands the nuances of human emotions and behavior.

Would you go to a business coach to help you heal from an eating disorder? Would you expect a business coach to be well-versed in the nuances of human emotions and behavior as they apply to a stigmas and shame? No?

Then why the fuck would anyone expect one to help them heal a money mindset?

No business or money mindset coach is qualified to help “heal” trauma unless they also have a background in trauma-informed counseling, social work, therapy, etc.

Additionally, coaches need to be making a concerted effort through their own business to mitigate the effects of those systemic issues and mitigate their contribution to those systemic effects. One way that has to be done is by making their services more accessible to people who actually have money mindset problems. If a coach has to convince you to spend tons of money on their services by telling you it an investment, then they probably aren’t accounting for the fact that people with money mindset issues typically don’t have a lot of capital to begin with. Which means they aren’t even targeting the people who actually need their help, they’re just mindfucking people expendable income –– or worse, manipulating people without expendable income into putting themselves in debt to afford them.

I don’t need to point out the ethics issues inherent in that practice.

PS: If you found today's topic intriguing and you're an entrepreneur or practitioner who offers services to others, I would recommend checking out my articles on conscious business and subscribing to get notified when there are new posts. Learn how you can work with me here and be sure to check out my new online course, Ethical Entrepreneurship.

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  1. That was a long read but absolutely WORTH it. Thanks so much for the time, insight and research you put into this article.

    • Thank you for taking the time to read it!


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