Understand The Power Of Assumptions And Their Influence So You Can Unlock Your Full Financial Potential

Welcome to the second installment of a four-part series that explores “limiting beliefs, interpretations, assumptions, and gremlins” related to money, business, and prosperity. Despite their dedication, many talented and creative female entrepreneurs often encounter obstacles that hinder the success of their businesses. To achieve financial success, two essential elements come into play: our inner world, composed of our thoughts and beliefs, and our concrete actions, i.e., our daily behavior. These two elements are closely interconnected, and it’s crucial to understand how your financial assumptions influence your actions and how transforming them can help you unlock your full financial potential.

But What Are Assumptions? 

To begin, let’s clarify what “assumptions” are. 

An Assumption is an expectation that, because something has happened in the past, it will happen again.

It is a belief or idea that we consider trustworthy without questioning them. Assumptions are often based on one past experience and can guide our thoughts, behaviors, and decisions to avoid taking risks or actions. They play a significant role in how we perceive the world and act accordingly.

So, what’s the concrete difference between limiting belief and assumption?

The terms “belief” and “assumption” are similar, but they have distinct nuanced meanings:

Limiting Belief:

A belief is a deep and enduring conviction in something often based on cultural or familial influences. For example, “Women earn 30 % less than men”, or “Women are lousy car drivers”.

Assumption:

An assumption is a hypothesis or conjecture made on one piece of evidence. For example, if you once had a business that didn’t take off and had to close the company, now you assume that if you open a new business, the same thing will happen. Or you don’t wear a watch because you’ve lost one and will surely lose the next one too.

Assumptions hinder decision-making and positive actions. For example, an assumption like “I failed my first university exam. I’m going to fail everyone else.” This assumption is very limiting because it can discourage people from taking further action to achieve their goals. They can hinder career growth, financial growth, financial management, and goal achievement.

Assumptions often create a scarcity and fear mindset. They tend to reinforce negative beliefs and limit perspectives. People with limiting assumptions struggle to take financial risks and explore new opportunities. But also to learn from failure. 

Challenging assumptions can sometimes be more involved than challenging limiting beliefs. This is because limiting beliefs are usually created from what you’ve been told, while assumptions are primarily based on personal experience. 

Story:

Claire’s Student Loan Assumption:

Claire had taken out a loan once in her life, and paying it back involved all kinds of deprivation, a miserable life, and running three jobs. This led her to avoid student loans and work part-time to fund her education. However, after challenging this assumption, she took out a student loan to pursue her studies. With her degree and a well-paying job, she quickly paid off the loan, realizing that responsible student loan management could be a wise investment in the future and not necessarily an obstacle.

Sometimes, it’s challenging to distinguish assumptions from limiting beliefs because they often sound the same. As we have already specified above, however, the limiting thoughts are based on concepts we have heard and the assumptions we have created from a single experience made by us.

Here are some examples of assumptions related to money and wealth:

• “No matter how hard I work, I’ll never have enough money.”: This is an assumption if you’ve already tried working a job, but your account has always been empty at the end of the month.
• “Investing in the stock market is like playing the lottery”: This is an assumption if you have invested once and lost your investment in a short period. This experience makes you compare investing in the stock market to a risky and uncertain activity.
• “Lending money ruins friendship”: This is an assumption based on personal experience. Have you ever given a loan, and when you asked for the money, the borrower, for example, told you that she did not remember giving you money, and this led to the end of the friendship for you because you fell asleep trusting her?
• “You don’t win the lotto. You’re just giving your money away.”: This is an assumption if you’ve ever played once, didn’t win, and decided never to play the lotto again because it’s a waste of money.

Remember that Assumptions are usually more internalized and emotional than limiting beliefs. 

The result is that, after an initial challenge, resistance is natural. You may have to delve a bit deeper to remove the emotion of the experience before moving forward.

We offer an exercise that we recommend to our clients and that you can also undertake independently. This exercise will help you explore your financial assumptions and determine if they align with your aspirations.

Coaching Exercise: Identifying Your Financial Assumptions

This exercise will help you become aware of your financial assumptions, challenge them, and create a concrete action plan to adopt new, more positive perspectives that favor sound financial management.

Step 1: List of Assumptions

Take a moment to write down all the assumptions you have related to money. List as many as possible. These assumptions can be positive or negative.

Step 2: Origins of Assumptions

For each assumption, determine its origin. Remember it is an assumption only if you believe this because you did it once and failed. 

Where does this assumption come from? What is the evidence?  

It is a limiting belief if your upbringing, family, friends, statistics, news, culture, media, etc, have influenced it.

Step 3: Challenging Assumptions

For each assumption, go through a process of questioning. Ask yourself the following questions:

“Is this assumption based on one or more real facts?”

“What kind of evidence contradict this assumption?”

“How has this assumption influenced my financial decisions up to this point?”

“How would my financial life be different if I didn’t believe in this assumption?”

The most important question is: “Just because something has happened in the past, why do I think it will happen again?”

Step 4: New Perspectives

Explore alternative perspectives for each assumption. For example, if you assume that “You have to work hard to earn money,” consider what could be a source of solutions and opportunities for you to easily earn a lot of money.

Step 5: Action Plan

Develop an action plan to incorporate these new perspectives into your relationship with money. What concrete actions can you take to change your financial behaviors based on these new perspectives?

Steps 4 and 5 are generally more effective when collaborating with a coach but can also be carried out independently.

Congratulations on your commitment to unlocking your financial success. This article marks the second step in a four-part series, each delving deep into different aspects of limiting beliefs, assumptions, interpretations, and gremlins related to your business. It’s crucial to remember that assumptions make us only see the risk but no opportunities for growth. You can choose how to interpret them and how they influence your journey.

The challenge is to consider these assumptions as growth opportunities by transforming them into assets to unlock your financial success or by eliminating them to silence these self-imposed limits. Understanding that your assumptions can either serve you or hinder you is essential. They serve you only if you choose to learn from them. Stay tuned for inspiring and practical advice to help you break down the barriers to financial success.

Your financial future is in your hands.

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