I recently read Dan Sullivan and Benjamin Hardy’s enlightening book, The Gap and The Gain. The central theme is adopting an attitude of appreciation and gratitude in place of one that dwells on deficits—a valuable lesson in both our personal and professional lives. In this post, I’m going to apply the principles from the book to our financial lives and discuss the benefits of shifting our attitudes when it comes to our money.
Understanding the "Gap" and the "Gain"
The book defines “The Gap” as an “unhealthy need or attachment to something outside of yourself.” When you have this type of mentality, you fixate on what you lack and the distance between your current state and your aspirations. It’s like constantly measuring the space you have left to travel, without acknowledging the ground you’ve covered.
Conversely, “The Gain” shifts the focus. It’s about being “in harmony with what you want and knowing that you don’t need it.” This perspective doesn’t just look at where you want to go but also celebrates how far you’ve come. It’s the difference between seeing a glass half empty or half full.
Applying these insights to financial planning
In my practice, I’ve noticed that many of us (including myself) sometimes view our accomplishments through a lens of scarcity. Thoughts like, “I haven’t reached my financial goal yet,” or “I need more to be happy,” can dominate our thinking and plunge us into ‘gap’ thinking.
However, I’ve found one simple strategy that works as a powerful antidote to this line of thought: I show clients a visual representation of their financial growth. Every year, we review a chart that displays changes in their financial net worth over time. For most, this graph trends upwards—a testament to their financial growth and efforts.
When clients see this retrospective glance, they often reconnect with a sense of accomplishment and motivation. For instance, a client recently shared feelings of financial inadequacy prior to our meeting. Yet, upon reviewing their net worth chart, they remarked to me how this simple reflection snapped their situation back into perspective. They felt better and more motivated. They shifted from dwelling in the gap to celebrating the gain.
Read More: The Power of Incremental Change in Your Financial Life
Why shifting perspective matters
Sullivan and Hardy advocate that this reframing is not only psychologically uplifting, but it can more effectively motivate us to act, too. Recognizing our incremental achievements can provide the fuel we need to keep going.
How to Embrace the Gain in Your Financial Life:
- Reflect on your journey: Regularly take stock of how far you’ve come financially, not just where you’re heading.
- Celebrate small victories: Instead of fixating on a distant, major goal, focus on the smaller, consistent progress you make.
- Cultivate gratitude: Make it a habit to appreciate your current financial state and the resources you have at your disposal.
The Gap and The Gain teaches us that how we view our progress fundamentally affects our motivation, satisfaction, and happiness. By choosing to focus on our gains rather than our gaps, we can lead more fulfilled and productive lives.
In embracing this mindset, we not only enhance our financial well-being but also enrich our overall life satisfaction. Let’s commit to recognizing and celebrating every step forward, no matter how small.
Jim is a financial advisor and owner of Thinking Big Financial, Inc. Thinking Big Financial is a fee-only registered investment advisor offering financial planning and investment management services. Specializing in working with the LGBTQ Community.
Please read my legal disclaimer here.