A poverty mentality; Weird and whacky habits of the super rich; Amortisation explained; Rationalising with fear; Why I love my sister

By Amanda Morrall (email)

1) Too poor

Spiritually and in non-material ways, I think of myself as being super rich. Financially, I sometimes think of myself as poor even though I know I'm just 'average' Apparently, that kind of thinking is going to beggar me. Here's an explainer from Wellington's Liz Koh of Money Max on the adverse effect of having a poverty mentality.

Do you Have a Poverty Mentality?

The way you think about money can have a huge influence on your ability to create wealth. Poverty mentality is a mind set that people develop over time based on a strong belief that they will never have enough money. This mind set is driven by fear and can cause poor financial decision-making.

Here are some common characteristics of poverty mentality:

• Being constantly worried about money or thinking about it often. People with a poverty mentality spend a lot of time thinking about their lack of money, wishing they had more, and being envious of people who have more money than them.
• Having a strong dislike of ‘rich’ people, yet wanting to have what they have. This can lead to reckless acts where, as soon as money is acquired, it is spent on luxuries. This is self-sabotaging behaviour which makes it difficult for someone with a poverty mentality to accumulate money.
• Making decisions based on fear. This can often lead to financial loss. For example, fearful people can be afraid to set up direct debits for bills in case they don’t have enough money in their account when the bills are due. This in turn means they can be late in paying their bills and incur penalties or miss out on discounts.
• Thinking small rather than thinking big. Small goals lead to small outcomes. Big goals require an optimistic attitude and willingness to take risk whereas small goals arise from pessimism and fear.

Poverty mentality is commonly found in people who have experienced poverty in childhood. It is a barrier to enjoying happiness and financial security. The remedy is to find ways of changing beliefs about money and focusing on what you have rather than what you don’t have; a process which sometimes requires assistance from a counsellor.

2) Too rich

And conversely, this is what happens when you have too much money. And I thought teddy bear collections were for kids?!

3) Amortisation rates
When you buy your first home, you open yourself up to a whole world of bewildering financial terms, products and related debt that will enslave you to banks, insurers and lawyers for a long time.

Here's the skinny on amortisation rates and how that applies to other expenses.

4) Overcoming fear

Fear is a strange thing. Sure you might have a genuine fear of someone or something if they caused you harm but most fears are all in our heads. This blog by elevenminuteawesome.com explains how to overcome fear by imagining the worst case scenario and then diffuse it with reality.

5) The time traveller's guide

My sister is a ballet teacher but she should have been a travel agent. She's even figured out how to do Disneyland without ever standing in a line-up longer than 20 minutes, or somewhere thereabouts. I was reminded again how it can pay to have these Internet sleuthing skills when she beat my travel agent by around $1,500 on some flights (plus saved me another $300 at least on hotels because she found direct flights). Naively, I thought that travel agents knew their business better than Joe average. Perhaps I just had a dud. I've hired my sister and she works for free. One day I hope to make it up to her.

For DIY travellers here's a piece from Forbes.com on the best time to catch a deal. Apparently, it's six weeks before take off.

To read other Take Fives by Amanda Morrall click here. You can also follow Amanda on Twitter@amandamorrall