Scarcity Mindset – Why is it difficult to think Long term?

scarcity mentality

Remember Rohit? The same guy who visited me last month and we discussed an importance of knowing net worth.

He called me yesterday and said that even though he’s doing exactly what I told him, but still somewhere he is not happy. The latest issue with him is that he got promoted.

What? Congratulations, Rohit. I wished him. This is good news, why is it bothering you?

One of my colleagues has also got promoted and now we are in equal grade. I know that he doesn’t deserve it and works too less as compared to me. Rohit replied. And now when he has been promoted, there are very lower chances of my promotion next year.

There are no Jobs in the market for my profile, and look at the education fees, I am not sure in this kind of high inflation scenario, and I would be able to save enough for kid’s education and my future.

This time, I bluntly replied him, “Tera Kuch Nahi ho Sakta”, and asked him to share his travel experiences of Himachal to change his mood.

But later on when I gave thought on this, I figured out that it’s no longer about money, now the issue pertains more to mindset. After googling a bit and flipping some of my unread books, I found out a term called “Scarcity mindset”, which is the cause of many people’s despair.

It is not about having fewer resources, but more about a feeling that what you have is always lesser than what is required.

Scarcity mindset is something that always leads you to think and believe that resources are always scarce for you, which in turn restricts your growth. You keep comparing yourself to others, rather than participating in other’s joy, you remain jealous of them; you don’t learn from their experiences and hard work but keep cursing your own luck. You don’t see the big picture and thus end up making short-term decisions.

Scarcity mindset people feel that everything that’s needed for future survival and progress is getting scarce or running out. There’s only so much of everything available in the world for everybody. If someone does well it must be at the expense of everyone else that’s doing poorly.

They are not happy with what they have but are jealous of what others have. They believe in accumulating and stay away from sharing. They always blame others for their own state. For them they are not doing well because of their Employer, Government, Parents, Spouse and others.

Scarcity mentality has its reference in Stephen covey’s book – “The 7 habits of highly effective people”, where he wrote

“Most people are deeply scripted in what I call the Scarcity Mentality. They see life as having only so much, as though there was only one pie out there. And if someone were to get a big piece of the pie, it would mean less for everybody else.

The Scarcity Mentality is the zero-sum paradigm of life. People with a Scarcity Mentality have a very difficult time sharing recognition and credit, power or profit – even with those who help in the production. They also have a very hard time being genuinely happy for the success of other people.”

Opposite of this is the “Abundance Mindset”, which again as per Stephen Covey –

“The Abundance Mentality, on the other hand, flows out of a deep inner sense of personal worth and security. It is the paradigm that there is plenty out there and enough to spare for everybody. It results in sharing of prestige, of recognition, of profits, of decision making. It opens possibilities, options, alternatives, and creativity.”

Scarcity mindset people look at everyone as a competition and believes in “I win- You lose” theory, whereas, abundance mentality people want to create a Win-Win situation. That’s why the main focus of Scarcity Mindset people is on costs, whereas abundant mind looks at long-term benefits.

Scarcity mindset person finds difficult to trust anybody, but abundance mindset people believe that to have healthy relationship trust is a must.

Scarcity mindset and Personal finance

It is very difficult for a person with a scarcity mentality to follow a long-term financial planning approach. As scarcity mindset doesn’t let the person think long term, it leads the person to focus on short-term decisions for immediate relief, as if the world is going to end tomorrow.

They believe in “Live today and forget tomorrow” theory.

scarcity mentality

They focus on immediate returns rather than long-term returns. Rather than a strategic asset allocation, they want their portfolio to have ever-performing Investments. Red color bothers them. That’s why they get attracted towards the stock market in the bull phase only, but the market never behaves the way you want, so when they see RED in their portfolio, they start blaming markets, government, news channels, Newspapers etc. for their loss. RED color bothers them.

Scarcity feeling results into fear…fear of not having enough, fear of losing what you have. That is the reason they are more concerned about the safety aspect and ignore growth factors. For such minds, resources are always less to plan.

Scarcity mindset also leads to more spending. Spending satisfies instant gratification though for a short term. Sellers also take advantage of this scarcity feeling, by using phrases – “Till stocks last”, “Only 2 left”, “ Out of Stock, check next week”, “Buy 2 get 1 free…only for today” etc. These phrases instigate scarcity feeling and let people spend more as there’s very less time left or only a few things are available.

And the worst part of this Scarcity mindset is that it doesn’t let people enjoy what they have. Even after getting what others have, the feeling of emptiness doesn’t go by. Such people are never content.

How to overcome this scarcity Mindset?

Scarcity mindset is not exclusive to certain people. Every one of us sometimes behaves with a scarcity mind. That doesn’t mean we never behaved with an abundant mind. It’s just which feeling overpowers you.

The overcoming scarce feeling is all about ingraining more of Abundant feeling.

You need to be thankful for whatever you have.

Make a list of all that you have and see how blessed you are. Look at the positive side of the story. And if you still feel you don’t have that much of positives then Realize that just because if you are in a tough place now, it doesn’t mean you will always be in that place.

“Gratitude is a powerful process for shifting your energy and bringing more of what you want into your life. Be grateful for what you already have and you will attract more good things.” – The Secret

Learn to share

Yes, the Abundant mind believes in sharing. They consider sharing as another form of investing. More you invest more you will get. Share your knowledge, Share your time, Share your money, Share whatever you have, you have abundant resources with you. You share your resources with others, they will share theirs with you.

scarcity mindset

Stop comparing yourself with others. What they are doing is what they value or what they want to do. You do what you value.

Think Long term.

List down your goals, make a plan or take help of planner to structure out how to achieve them. Take your financial life head on. There’s nothing you cannot change. It’s just you need to take the first step.


When you know where the problem lies, you should better face it rather than run from it. Scarcity mindset doesn’t let people grow,

I believe in having a rich life and this richness is what I try to bring in the life of my clients. The problem is not how and how much money you make (in comparison to others), but how you perceive it and make the best use of it. Enjoying what you have and use it in the best possible way, by keeping yourself happy, healthy and active is all that is required to lead a Rich Life. It is as much spiritual as it is financial.

One question for you – Someone who’s having multiple properties in his name and finding difficulty in managing those, wants to buy one more residential house just to save capital gain tax earned from another real estate. Do you think he suffers from “Scarcity mindset”?


  1. You have caught the nerve. I may suggest it as anxiety disorder an offshoot of OCD ( Obsessive Compulsive Disorder) We all have such thinking but to those who are unable to control fall prey.
    Think Long term is good but it should not form an obsession. Who knows what would happen tomorrow. The Sun may stop shining. A huge meteor may be lurking to destroy us.
    As most philosophers say ” live the moment”

    • Happy is the person who knows , what to remember of the past, what to enjoy in the present and what to plan for in the future – Arnold.H.Glasgow

  2. Scarcity Mindset indirectly relates to ” uski kameez meri kameez se white kyon ? ”
    We are jealous of other people indirectly in the deep cores of our heart,may be he is our colleague,relative or friend . We compare our assets with others. We should keep our mindset satisfied while side by side doing everything to the best of our efforts.

    • Yes, very true Sir. But a person with a scarcity mindset, always tend to find a shirt whiter than his and keep worrying about his shirt’s whiteness. he can never be contended. and i totally agree with you saying – We should keep our mindset satisfied while side by side doing everything to the best of our efforts.


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