Insights ... at your fingertips

Call Us Today(514) 745-3189
Toll Free:1-888-855-6975

Locus of control and the wealth mindset

Posted by Deb Muoio

Oct 29, 2015 10:58:52 AM

I read a story about a man who took a bus trip to a city he had always wanted to visit. He ended up losing his return ticket, and had no idea how he was going to get back home because he was low on funds. He decided to line up at the bus station ticket booth anyway, not knowing what he would do once he got to the window; he just hoped he’d have some plan figured out by the time he got to the head of the line. He only had a few people ahead of him when, suddenly, the man in front of him turned around and asked him if he wanted to buy his ticket at a discount price, because he wouldn’t be needing it anymore.

Talk about flying (or in this case, traveling) by the seat of your pants! What is most striking about this story is how the person’s mindset played a crucial role. He not only believed in possibility, he fully trusted that he would somehow work it out, regardless of his current circumstances.

Bookshelves are bursting with books on how to develop a “wealth mindset,” or a mental attitude that is conducive to success. Although this may sound like nothing more than new-age hokum, research does in fact indicate that wealthy people think differently, particularly as it relates to “locus of control” (the conviction that we have the power to control or change our circumstances).

When we compared the beliefs of people in the highest and lowest economic brackets in our own study using the Locus of Control Test, here’s what we discovered:

 As it relates to success…

  • 68% of wealthy people believe that they are in full control of their destiny, and can change it at any time (compared to 41% of low income people).
  • 82% of wealthy people attribute their successes to personal factors like intelligence, skill, and effort, rather than chance, luck, or other external factors (compared to 68% of low income people).
  • 96% of wealthy people fully believe in that they have the ability to achieve whatever they set their mind to (compared to 85% of low income people).
  • 84% of wealthy people believe that a person can rise above his or her background, even if he/she comes from a poor family (compared to 74% of low income people).
  • 81% of wealthy people believe that a person can overcome a difficult childhood and use the experience to become a better, stronger, and wiser person (compared to 70% of low income people).

 As it relates to life in general…

  • 78% of wealthy people believe that their vote makes a difference (compared to 67% of low income people).
  • 78% of wealthy people believe that they can take steps to initiate change if they see an injustice (compared to 67% of low income people).
  • 10% of wealthy people believe that their health is predetermined by their genes (compared to 17% of low income people).
  • 23% of wealthy people believe that being at the right place at the right time is essential to getting what they want in life (compared to 36% of low income people).
  • 7% of wealthy people assume that anyone who is happy has probably had a very easy life (compared to 16% of low income people).

 On a side note…

  • When asked to rate their self-esteem, 67% of wealthy people classified it has high, 28% as moderate, and 5% as low. For the low income group, 32% rated their self-esteem as high, 47% as moderate, and 21% as low.

One could argue that the more internal locus of control of the wealthier people is ex post facto; essentially, the more money you have, the more you are free to change your life in whatever way you choose. Money offers stability, and with stability comes a greater sense of control over our circumstances.

That being said, creating wealth is not a passive endeavor. Action must be taken – the creation of a new invention, the opening of a new business – in order to create that wealth. The wealthier people likely choose to believe that every decision they make or risk they take has the potential to change their life. And if things don’t pan out, they can simply choose a different path.

 

How to develop a healthy locus of control

Developing an internal locus of control is all about shifting your perception, and looking at your circumstances from a different perspective. It is an active process; changing your mindset requires conscious effort on your part.

Here are some tips:

  • Assess yourself. Awareness is the first step to changing your perception. One easy way to begin this process is to take an assessment that will systematically evaluate your attitudes and provide some initial insight into your way of thinking. Our Locus of Control and Attribution Style Test is available here: http://testyourself.psychtests.com/testid/2109 (you will get a free Snapshot report and will be able to upgrade to a Full report for a small fee).
  • Keep track of your thoughts with a journal. When something happens to you (good or bad), write your thoughts about the situation. Do you believe that something you did led to the result, or did you feel like outside forces were at work? The extent to which you take responsibility for your actions and the events around you can significantly influence your feelings and behavior in the workplace.
  • Look for patterns. Look over your journal, and evaluate how you attribute your successes and failures. If you notice that you attribute most of your achievements to something out of your control (a lucky break, help from someone else) then take some time to re-evaluate the situation. In reality, did something you do lead to the result? Was it your patience, your ability to work under pressure, or that good idea you came up with? If you catch yourself casting credit or blame on other people (or other factors) when it was your own actions that played a role, stop that pattern of thinking in its tracks. From this point on, write down every success and failure, and how you played a role. Eventually, you will start taking more responsibility for your actions, and will feel more accountable as a result.
  • Be on the lookout for black-and-white, absolutist thinking. Look out for thoughts in your head like "I always perform poorly on important projects at work", "I will never get over this failure", or "Now that the first part of the project went poorly, the whole thing will be ruined". When you think this way, you are generalizing one negative experience and blowing it out of proportion.

Oftentimes, when we make these grand claims, there is little (if any) proof to back them up. When you catch yourself thinking in absolutes, like “I always” or “I never,” consciously change them.

  • “Sometimes, I don’t perform as well as I would like to on projects, but if anything, it pushes me to do better next time. Besides, there are at least some projects where I do a decent job, if not better.”
  • “This is a tough failure to swallow, but it teaches me an important lesson on what not to do next time.”
  • “The first part of the project didn’t go as well as expected. Now that I know what went wrong and what should have been done, I can develop a better plan for the second part.”

If you’re interested in using LCAST - R2 (Locus of Control & Attribution Style Test - 2nd Revision) or other assessments for HR purposes, request a free trial for ARCH Profile here.

Want to learn more about using psychological tests for hiring, leadership development, career development or talent retention? Download our free eBook loaded with down-to-earth information about psychological testing for HR purposes.

  Request your free trial of ARCH Profile!

 

Topics: Employee Attitude, Mentoring, Personal Development, Coaching

Subscribe to Email Updates


Request your free trial of ARCH Profile!

 

Recent Posts

Share on

   

Follow us on