How I Conquered My Fear of Going Broke
“I’ve had a scarcity complex – always worried I’m about to go broke.”
James Altucher is an American hedge fund manager, entrepreneur, bestselling author, and podcaster. He’s founded or cofounded over 20 companies. He’s published about a dozen books, and is a frequent contributor to myriad publications. The USA Today named his book, Choose Yourself, as one of the “12 Best Business Books of All Time.”
I’ve had the privilege of working side by side with James when we were at TheStreet.com. And I’m honored to call him a friend. Although, it wasn’t until I interviewed him on my podcast So Money recently, that I learned a darker side to James’ financial history and the scarcity complex he’s combatted over the years.
For the full story, visit Money.com.
Here’s how he explained it to me on my show…and how he’s overcoming it.
JA: Psychologically, like internally, for a long time I’ve had what I’ll call a scarcity complex. I’m always worried, or I have in the past always been worried, that I’m about to go broke. And even though that’s not the case, every now and then that thought comes up.
FT: How did you develop the scarcity complex?
JA: think I was always worried. Every month, my father, he was an entrepreneur and he had a computer software business in the 1980s. And every month, every day, he would come into the door and say, “Next month is gonna be our big month. We’re gonna sign a big deal and everything’s gonna be huge.” And so, I was always thinking we’re about to be rich, and it never happened. It was always “the next month” and it just never ever happened. He never really achieved his financial goals. But there was always this constant sense of anticipation and then eventually, he went totally broke and his business went out of business. And I think that really scared me [to think] that I was gonna repeat his pattern.
I was always afraid that this was gonna happen to me and I guess I still am afraid. You never really give up on this things. I think it’s important to realize that, as they say in the investment world, “Prior performance…is not a predictor of future performance.” And, I think that’s what I’ve always had to convince myself of, and it’s only in the past few years that I’ve really, more or less convinced myself of that.
A few years ago I kind of hit bottom. I sold a company…and I sold it for a lot of money. And then I just kind of spent [the money] like crazy and it really was just insane the way I would just spend money like it was nothing. And so I ended up losing all my money, losing my house, getting divorced and really being too ashamed. I was ashamed to tell people about it. This has happened to me before. This happened to me like four, five times. The exact same thing. And so I had to say myself, “Well what worked on the way up? And what didn’t work on the way down?”
FT: How are you overcoming this?
I think less about money and more about my health. For me the key to having a good relationship with money is to realize that money is much less important than I always thought it was. What’s much more important is my belief in myself. I find that money is just a bi-product of living a healthy life. Am I constantly generating ideas and practicing what I call my idea muscle, exercising my idea muscle? And am I grateful for what I have? I started focusing everyday on improving my life physically, emotionally, mentally and spiritually…by just 1%.
Instead of going out drinking, and eating, and not exercising, and not sleeping I had to focus on my physical health. I had to focus on just being around people who I really enjoyed, and who trusted me and loved me.
The best predictor of a successful tomorrow is to have a successful today. And the only way to have a successful today is to be healthy in those areas I just described. If everyday I do those things, then…I will have money.
Subscribe to So Money to get daily doses of financial inspiration from the world’s top entrepreneurs, authors and financial luminaries.