Why You Need to Be Broke (Before You Get Rich)
In this episode of The School of Greatness, Lewis Howes explores how financial hardship can shape our relationship with money and personal growth. Through his own experiences and insights, Howes examines how being broke can expose deep-seated beliefs about money, challenge our assumptions about self-worth, and create opportunities for developing self-awareness.
The episode delves into the practical and psychological benefits that can emerge from financial struggles, including the development of resourcefulness, budgeting skills, and financial discipline. Featuring input from Joe Dispenza, the discussion examines how childhood experiences form our money patterns and emphasizes the importance of viewing money as a tool rather than a measure of identity—insights that become particularly valuable when financial success arrives.
This is a preview of the Shortform summary of the Jan 28, 2026 episode of the The School of Greatness
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1-Page Summary
The Psychological and Mindset Lessons Of Being Broke
Lewis Howes explores how financial scarcity can serve as a powerful teacher, revealing deep-seated beliefs and values about money. He explains that being broke often exposes harmful money stories and limiting beliefs that were already present in our subconscious, providing an opportunity for awareness and change. Through his own experience, Howes discovered that financial struggles can help separate self-worth from bank account balance, leading to a deeper understanding that money should enrich life with options rather than measure personal value.
Skills and Habits Developed Through Financial Struggle
Financial hardship, according to Howes, can be a catalyst for developing crucial life skills. When money isn't available to solve problems, people are forced to become resourceful and creative, developing valuable abilities that often last longer than any paycheck. The necessity of managing limited resources cultivates strong budgeting habits, teaches prioritization, and builds patience in working toward goals. These experiences foster a healthy respect for money and financial discipline that proves invaluable when wealth does arrive.
Redefine Your Relationship With and Perspective On Money
Joe Dispenza discusses how our relationships with money are programmed from childhood experiences, forming lasting subconscious patterns. Both Dispenza and Howes emphasize that money should be viewed as a tool rather than an identity. Howes notes that wealth tends to amplify who a person already is, suggesting that whatever relationship one has with money during times of scarcity will be magnified when prosperity arrives. He credits his past financial difficulties as critical learning experiences that prepared him for sustainable wealth management through developing essential skills, discipline, and self-awareness.
1-Page Summary
Additional Materials
Clarifications
- Deep-seated beliefs about money are unconscious ideas formed early in life through family, culture, and personal experiences. These beliefs shape how we think and feel about money without us realizing it. They influence financial decisions and behaviors automatically, often limiting our potential. Changing these subconscious patterns requires conscious awareness and intentional effort.
- "Harmful money stories" are negative narratives people tell themselves about money, such as "I will never be wealthy" or "Money is the root of all evil." "Limiting beliefs" are subconscious convictions that restrict financial success, like feeling undeserving of wealth or fearing financial risk. These beliefs often originate from childhood experiences or cultural influences. They shape behaviors and attitudes that can prevent financial growth and stability.
- Financial struggles force individuals to confront their value beyond material wealth. They learn to appreciate personal qualities like resilience, creativity, and kindness. This shift helps detach self-esteem from financial status. Over time, self-worth becomes based on character and actions, not money.
- Money "enriching life with options" means it provides freedom to make choices, like pursuing interests or solving problems, without stress. Measuring personal value by money ties self-worth to financial status, which can harm mental health and self-esteem. True self-worth comes from character, skills, and relationships, not bank balance. Viewing money as a tool helps maintain a healthy mindset and reduces anxiety about finances.
- Financial hardship often teaches skills like effective budgeting, which involves tracking income and expenses to avoid overspending. It also develops problem-solving abilities by forcing individuals to find low-cost or no-cost alternatives. Time management improves as people prioritize tasks to maximize limited resources. Additionally, financial struggle can enhance emotional resilience, helping individuals cope with stress and uncertainty.
- When resources are limited, people must carefully track every expense to avoid running out of money, which forms budgeting habits. They learn to distinguish between essential and non-essential spending, developing prioritization skills. Waiting for goals to be achieved without immediate funds builds patience. These practices become ingrained through repeated necessity during financial hardship.
- During childhood, repeated messages and behaviors from parents and environment shape beliefs about money. These early experiences create subconscious patterns that influence how individuals think and feel about finances as adults. For example, witnessing scarcity or abundance can instill fear or confidence around money. These ingrained beliefs often operate automatically, affecting financial decisions without conscious awareness.
- Viewing money as a "tool rather than an identity" means seeing money as a means to achieve goals, not as a measure of who you are. It separates your self-worth from your financial status, preventing money from defining your value. This mindset helps maintain emotional balance regardless of wealth fluctuations. It encourages using money to enhance life, not to shape personal identity.
- Wealth amplifies a person's existing character because money acts as a magnifier of habits and values. If someone is generous and disciplined, having more money often increases their generosity and discipline. Conversely, if a person has poor money habits or negative beliefs, wealth can worsen those traits. This concept highlights the importance of developing a healthy mindset before acquiring significant wealth.
- Sustainable wealth management means handling money in a way that maintains and grows financial health over the long term without risking future stability. Past financial difficulties teach discipline, budgeting, and patience, which are essential for avoiding impulsive spending and poor investment choices. These experiences build emotional resilience, helping individuals stay calm and make rational decisions during financial ups and downs. Ultimately, this foundation supports consistent wealth growth and security.
Counterarguments
- While financial scarcity can indeed reveal subconscious beliefs about money, it can also lead to increased stress and anxiety, which may not always be conducive to positive change or self-awareness.
- The idea that being broke is necessary to expose harmful money stories could be challenged by suggesting that there are healthier and less distressing ways to uncover and address limiting beliefs.
- Separating self-worth from bank account balance is important, but the text may understate the real psychological impact of financial insecurity on one's sense of self-worth.
- The assertion that money should enrich life rather than measure personal value is an ideal that may not reflect the societal pressures and judgments that individuals often face regarding their financial status.
- While financial hardship can lead to the development of life skills, it can also perpetuate cycles of poverty and limit opportunities, making it harder for some individuals to escape their circumstances.
- The idea that managing limited resources always leads to strong budgeting habits and financial discipline overlooks the fact that some individuals may not have enough resources to manage effectively, no matter how disciplined they are.
- The notion that financial struggle fosters a healthy respect for money might not account for the potential development of fear or resentment towards money due to negative experiences.
- The concept that relationships with money are programmed from childhood experiences might oversimplify the complex and dynamic nature of an individual's relationship with money, which can be influenced by a wide range of factors throughout life.
- Viewing money as a tool rather than an identity is a healthy perspective, but the text does not address the systemic issues that can prevent people from accessing the tools they need to succeed financially.
- The idea that wealth amplifies a person's existing character may not take into account the transformative effects that significant changes in financial status can have on an individual's behavior and values.
- The suggestion that past financial difficulties prepare individuals for sustainable wealth management may not be universally applicable, as some people may not have the resources or support to translate their experiences into future financial success.
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The Psychological and Mindset Lessons Of Being Broke
Navigating through financial scarcity can be a profound teacher, revealing deep insights into an individual's beliefs, values, and concept of self-worth.
Being Broke Exposes Harmful Money Stories and Beliefs
Being broke can be a powerful mirror, reflecting one's deep-rooted belief system, habits, fears, and insecurities, particularly in relation to money. Lewis Howes speaks about how a lack of funds can force you to think and feel differently about finances, challenging your internal dialogue about wealth and success. Being without money brings to light the narratives you've built around finances, whether it's a feeling of incompetence, the belief that money is hard to come by, or the notion that wealth equates to greed. These thoughts aren't created by the experience of being broke; rather, financial hardship unveils these hidden scripts because they were already present in the subconscious. Understanding that you cannot change what you're not aware of, being broke peers into these limiting beliefs, offering you the awareness needed to confront and rectify them.
Broke Separates Self-Worth From Bank Account
Howes shares from his own experience that, while struggling financially, he was forced to question his self-worth and why he seemed unable to generate income. This introspection led to the understanding that money should serve to enrich your life with options, not to measure your value as a person. Knowing individuals who possess significant wealth yet lack fulfillment highlights the disconnect between one's bank account and internal happiness or self-worth. The time Howes was broke provided a more profound understanding of money, self-worth, and the true meaning of freedom than any period in which he had abundant financial resources. He suggests that the state of being broke can guide individuals to shift t ...
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The Psychological and Mindset Lessons Of Being Broke
Additional Materials
Counterarguments
- While financial scarcity can indeed reveal underlying beliefs and values, it can also exacerbate stress and mental health issues, which may not be conducive to positive introspection or growth.
- The idea that being broke exposes harmful money stories assumes that all individuals have the psychological resilience and support systems necessary to confront and change these beliefs, which may not be the case for everyone.
- The notion that self-worth should be separated from financial status can be difficult to embrace in societies where wealth and success are often intertwined with social status and self-esteem.
- The text suggests that money should provide life options and enrichment, but it may overlook the reality that for many people, financial stability itself is a necessary condition for pursuing other life options.
- The assertion that wealth does not guarantee fulfillment may not acknowledge that a certain level of financial security is often a prerequisite for the peace of mind needed to pursue fulfillment in other areas of life.
- The idea that being broke can lead to a deeper understanding of money and freedom may not resonate with those who experience chronic financial hardship and the associated stressors, which can overshadow opportunities for personal growth.
- The emphasis on shifting focus from wealth accumulation to enriching life with meaningful options may not take into accoun ...
Actionables
- You can start a "Money Beliefs Journal" to track your thoughts and feelings about money daily. Write down any negative thoughts that come up when you think about your finances, and then challenge them by writing a positive counter-statement. For example, if you catch yourself thinking, "I'll never be able to afford a house," counter it with, "I am learning to manage my money better every day and will create a plan to save for a house."
- Create a "Values-Based Budget" where you allocate funds not just based on expenses but on your core values. For instance, if you value education, you might set aside money for books or courses even when money is tight. This helps you align your spending with what truly matters to you, rather than just accumulating possessions.
- Engage in a "Purposefu ...
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Skills and Habits Developed Through Financial Struggle
Lewis Howes brings to light how grappling with financial challenges can serve as a catalyst for personal growth, instilling resourcefulness, discipline, and healthy financial respect that can benefit individuals long after their monetary situation has improved.
Being Broke Teaches Resourcefulness Before Riches
Howes emphasizes that financial hardship necessitates resourcefulness, as money can't be thrown at problems. This scarcity can drive creativity and prompt the development of valuable skills. It requires people to face their fears and insecurities and to persist despite failures. This muscle for resourcefulness—honed when funds are low—often lasts longer than any paycheck.
Develop Creativity and Skills When Money Isn't an Option
He asserts that when you're broke, your creativity is stimulated; you learn to ask more insightful questions and to figure things out without financial aid. Being broke can push individuals to take courageous actions and develop the ability to create value without relying on money. Howes notes that the challenge of being broke allows for the development of skills that contribute to later success.
Being Broke Instills Financial Discipline and Delayed Gratification
During this financial struggle, Howes stresses the importance of being disciplined with money, setting priorities, and delaying gratification. These lessons, learned out of necessity, become crucial as one's financial health improves. Howes reflects on his days of earning little from internships, focusing instead on improving skills like public speaking and online marketing. He suggests that such discipline and long-term view are half the battle to a successful financial future. He insists that these skills don't vanish once more money comes in; rather, the lessons from a time of scarcity stick around when the financial situation turns around.
Managing Limited Resources Cultivates Budgeting, Prioritizing Needs, and Working Patiently Towards Goals
Howes explains that when resources are tight, it forces one to be more intentional with each dollar and to avoid wasteful spending. Learn ...
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Skills and Habits Developed Through Financial Struggle
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Counterarguments
- While financial struggle can indeed foster resourcefulness and creativity, it can also lead to significant stress and anxiety, which may hinder personal growth and well-being.
- The idea that being broke teaches valuable lessons can sometimes romanticize or trivialize the very real hardships that come with financial insecurity.
- Not everyone has the same opportunities to develop skills or creativity in the face of financial hardship, as individual circumstances such as health, family responsibilities, or lack of access to education can limit one's ability to overcome financial struggles.
- The assertion that the lessons of financial discipline and respect for money learned during times of scarcity will persist as financial situations improve may not hold true for everyone, as some individuals may revert to previous spending habits once financial pressure is relieved.
- The text may underestimate the role of systemic issues in financial struggles, such as economic inequality, job market conditions, and lack of social safety nets, which can make it more difficult for some individuals to simply "bootstrap" their way out of financial hardship.
- The notion that financial struggle is necessary for personal growth could be seen as dismissive of the experiences of those who have not faced such challenges but have nonetheless developed financial discipline and respect for money.
- The emphasis on individual responsibility in managing finances does not fully acknowledge the impact of external factors such as inflation, cost ...
Actionables
- You can start a "No Spend Month" challenge to cultivate financial discipline and creativity. During this month, avoid all non-essential purchases and find alternative ways to meet your needs, such as borrowing items, using up what you already have, or finding free entertainment options. This practice can help you identify what you truly value and force you to be more creative with your resources.
- Create a "Resourcefulness Journal" to track and reflect on instances where you solved problems without spending money. Each day, jot down at least one situation where you used ingenuity instead of cash to overcome a challenge, such as repairing an item instead of replacing it or bartering services with friends. This habit can help reinforce the skills and mindset developed during times of financial constraint.
- Develop a "Priority-Based Budg ...
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Redefine Your Relationship With and Perspective On Money
A deeper understanding of one's emotional relationship with money is essential to personal growth and financial well-being. Joe Dispenza and Howes discuss how money should be considered a tool rather than an identity and how wealth only amplifies pre-existing character traits and habits.
Money Is a Tool, Not an Identity
Learn to Find Self-Worth Beyond Your Bank Balance
Joe Dispenza discusses the idea that relationships with money are formed and programmed from an early age based on past experiences, especially from childhood. This suggests that at an impressionable period, children can develop subconscious programs about money that last into adulthood. Dispenza has never really lived in lack and believes being proactive and staying ahead is crucial. Similarly, Howes sees money as a tool to serve and support his highest self rather than defining who he is. He has detached his decisions from being controlled by money and has an emotional response to transactions that do not define his identity.
Wealth Amplifies Who You Already Are
Tackle Money Mindset in Scarcity; Rising Income Magnifies Habits
Howes' journey from being broke to financially free implies that his wealth amplifies who he was without money. He notes that a relationship with money will not suddenly change with a change in finances. Instead, it will only amplify the existing relationship a person has with money. Both earning and losing money tend to have an emotional impact and reflect the current relationship one has with it. Howes believes money magnifies existing character traits and habits, stating that whatever relationship one has with money in scarcity will be magnified when more money comes their way. This concept highlights the importance of managing money effectively when in struggle, to prevent larger issues when one has more wealth.
Lessons Of Being Broke Prepare You For Prosperity
Financial Hardship Cultivates Skills, Discipline, and Self-Awareness for Sustainable Wealth Management
Sharing the lessons learned from financial struggles, Howes suggests that being broke can teach valuable lessons about money, self-worth, and freedom. These hardships cultivate the skills, discipline, and self-awareness necessary for sustainable wealth management. Financial struggles help c ...
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Redefine Your Relationship With and Perspective On Money
Additional Materials
Clarifications
- Joe Dispenza is a well-known author and speaker specializing in neuroscience, meditation, and personal transformation. He explores how thoughts and emotions influence reality, including financial mindset. Howes likely refers to a financial coach or entrepreneur who shares personal experiences on money management and mindset. Their perspectives are relevant because they combine scientific and practical approaches to understanding and improving one's relationship with money.
- "Subconscious programs about money" refer to deeply ingrained beliefs and attitudes about money formed without conscious awareness. These develop in childhood through repeated experiences, observations, and messages from family and environment. They influence how a person feels and behaves around money throughout life. Changing these programs requires conscious effort to recognize and reframe limiting beliefs.
- Money as a "tool" means viewing it as a means to achieve goals, solve problems, and support well-being without letting it define your self-worth. Seeing money as "identity" means tying your value, status, or sense of self directly to how much money you have. This can lead to emotional distress if financial situations change, as self-esteem becomes dependent on external wealth. Treating money as a tool encourages healthier emotional detachment and more rational financial decisions.
- Wealth "amplifies" pre-existing character traits and habits by increasing the impact of how a person naturally behaves with money. For example, someone who is disciplined with small amounts will likely be disciplined with large sums, while someone who is careless may become more reckless. This happens because having more money provides greater opportunities to express existing tendencies. Essentially, money acts as a magnifier, making underlying habits and traits more visible and influential.
- Changes in financial status trigger shifts in self-perception and emotional security, influencing money-related behaviors. Scarcity often activates stress and survival instincts, leading to cautious or impulsive financial decisions. Increased wealth can reduce anxiety but may also amplify existing habits, whether positive or negative. These psychological shifts are rooted in conditioned beliefs and emotional responses formed over time.
- Financial hardship forces individuals to prioritize essential expenses, enhancing budgeting skills. It requires consistent effort to meet financial obligations, building discipline. Facing money challenges increases self-awareness about spending habits and emotional triggers. These experiences teach resourcefulness and long-term planning for financial stability.
- "Rewriting one's money story" means changing the deep-seated beliefs and emotional patterns about money formed from past experiences. Practically, it involves identifying negative money beliefs, challenging them, and replacing them with positive, empowering ones. This process often includes consistent affirmations, visualization, and mindful financial habits to reinforce new attitude ...
Counterarguments
- While money should not define one's identity, it is often deeply intertwined with societal status and self-esteem, which can make it challenging to completely detach self-worth from financial success.
- The idea that subconscious programs about money are formed in childhood may not account for the ability of individuals to change and adapt their financial behaviors and beliefs in adulthood.
- The concept that wealth amplifies pre-existing traits may oversimplify the complex ways in which money can influence behavior and personality, potentially leading to significant changes in character.
- The notion that managing money effectively in times of scarcity will prevent larger issues when wealth increases assumes that the skills needed at different levels of wealth are the same, which may not always be the case.
- The lessons learned from being broke might not always prepare one for prosperity, as different skills and mindsets can be required to manage wealth effectively compared to surviving financial hardship.
- The belief that financial struggles inherently cultivate discipline and self-awareness may not recognize that some individuals may become demoralized or develop negative behaviors ...
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