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Rich people approach problems like this — and it helps explain why they're wealthy

MarketWatch logo MarketWatch 1/20/2019 Catey Hill

a man wearing a suit and tie sitting in a car© Getty Images Optimists are far more likely than pessimists to make smart money moves, new research reveals. Indeed, a new survey of more than 2,000 people released this week from Frost Bank found that while 90% of optimists have saved for a major purchase, just 70% of pessimists have.

Furthermore 75% of optimists have gotten creative with ways to save money versus just 60% of pessimists; and 61% of optimists have started an emergency fund, compared to just 43% of pessimists. And Frost found that even controlling for wealth and income, optimism is associated with an increase in financial well-being. 

And that’s not the only way that optimism can improve your bottom line. According to a study published in the Journal of Personality and Social Psychology in 2016, optimists tend to earn more money than pessimists. They’re also more likely to get promoted. And research by sociologist Rainer Zitelmann, author of “The Wealth Elite,” found that ultra-high-net-worth individuals overwhelmingly describe themselves as optimists, with just two of the 40 self-made multi-millionaires and billionaires he interviewed describing themselves as pessimists; no other personality trait he measured showed such a strong leaning. 

So why does optimism have such a positive impact on your bottom line? “Optimists have the expectation that good things happen and the belief that their behavior matters,” explains positive psychology researcher Michelle Gielan. “Optimists believe they can make a difference in challenging circumstances so they are much more motivated to act. For pessimists, circumstances overwhelm.” The ultra-rich in Zitelmann’s study almost all exhibited this kind of behavior, leading him to conclude that “what ultra-high-net-worth individuals mean when they use the term ‘optimism’ is identical to what psychologists refer to as ‘self-efficacy’” or the belief that “as a result of your own abilities, you are always able to identify solutions.”

To be sure, all is not rosy in the lives of optimists. One study found that optimists who start businesses are more likely to fail than pessimists who do that, possibly because they are more likely to start new ventures without realistically considering all that could go wrong.

Still, there’s a ton of evidence that optimism pays, so it may be worth trying to look at the world through rose-colored glasses. And experts say that you can change a pessimistic outlook to an optimistic outlook and reap the benefits from that. “While it may seem hard to believe, you can change how you think: Consider that thoughts are simply nerves firing in a certain pattern,” says psychologist Elizabeth Lombardo, author of “A Happy You: Your Ultimate Prescription for Happiness.” “If you take a course and learn new information, your brain literally rewires itself. Similarly, you can rewire your brain to go from pessimistic to more optimistic thinking.”

Here’s how to become an optimist: Spend five minutes every day imagining your best possible self; research shows that doing this will have an almost immediate effect on your optimism levels. Combine that with a gratitude practice. Psychologist Erika Martinez of Envision Wellness, a counseling firm in Miami, recommends starting or ending your day by thinking about what you’re grateful for.

And if you’re plagued throughout the day with negative thoughts, repeat positive affirmations to yourself, which can help you challenge those negative thoughts. For example: “Whenever you are in a situation that brings you stress (driving in traffic, dealing with an annoying colleague) stop and identify three things that are positive right now,” says Lombardo. “So, if you are stuck in traffic, it might be (1) I am safe, (2) I am listening to a great podcast and (3) I will be home soon. There is no right or wrong, just as long as the items you list feel positive to you.”

Related video: How to get rich in 4 simples steps (provided by GoBankingRates)


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