Myth #1 The Finite Pie
The way we think is costing us money. We take it for granted that our society doesn't have enough resources or productive capacity to fulfill everyone's needs and desires. That notion causes us to horde selfishly.
Caught up in scarcity thinking, we make faulty financial decisions. We don't buy things we need because we can never have enough and we postpone appropriate purchases because we can't let go of our precious dollars. We pull money out of investments when we should be buying more and we buy investments at their peak when we should be selling.
When we live in scarcity, greed overtakes us and we behave irresponsively. Gunderson uses the example of a friend who lost fifty thousand dollars in a scam because he felt if he didn't act immediately, he would lose out. His friend, Cory, was approached by a company who asked him to invest in a debt-restructuring and assistance program that would pay a 10 percent monthly coupon.
Cory was so caught up with the "potential" returns that he wrote the check without doing any due diligence. If it sounds too good to be true, it probably is. Cory lost his entire principal amount and never received a dime of interest income. A quick Internet search would have revealed that this lucrative investment was actually a fraudulent scheme that had been used against others.
The opposite of scarcity is abundance. Rather than hoard goods because we think we might run out, we should consider the ways we are making scarce resources more abundant. Agricultural land is thought of as a fixed resource. Yet, with genetic engineering, crop yields have been steadily rising. The same acreage is producing a much greater harvest.
Crude oil wasn't thought of as a scarce resource until there was worldwide usage of automobiles. Yes, our supply of oil is diminishing but we might not be desperate if we switch to alternative sources of energy or if new methods of extracting oil become practical.
Sheryl Sostarich |