By Kimberly Palmer

In Farnoosh Torabi's new book, Psych Yourself Rich: Get the Mindset and Discipline You Need to Build Your Financial Life , she doesn't just want to talk about money. She wants to focus on the bad habits, emotional hotspots, and prejudices that lead us to make the same financial mistakes over and over again. She's discovered, she says, that the main obstacle in so many people's way to financial success isn't a lack of math skills or budgeting prowess, but "emotional clutter."

"We're young, we're resourceful, we know how to find answers, but the variable that's missing is, 'How do I get this person psyched up mentally and physically to do what they need to do?'" says Torabi, who, as money coach on shows such as Soapnet's Bank of Mom & Dad, worked with many struggling young adults. That's why her book is about behavior more than finances. Torabi, who wrote You're So Money in 2008, says that she and her readers have matured, and now seek a deeper understanding of money.

So how is Torabi going to help you "psych yourself rich?" Here are five things she says young people can do:

Learn from the recession.

The downturn in the economy taught young adults that "nothing in life is guaranteed. Even though they might have had the college degree and great work experience, the ground could go beneath them at any moment. They might lose their job, or suddenly not be able to live on their own. It's been a very humbling time," she says.

That means young adults will likely be more careful about taking on debt as well as risks of getting downsized at work, so they'll find other revenue streams and become entrepreneurial, as Torabi herself was when she was laid off in 2009.

But don't be too down on your luck.

That's because in many ways, young adults are lucky that the recession happened at a point when there wasn't much on their plates in terms of mortgages or family responsibilities. "It was the best timing in some ways," says Torabi. "Being able-bodied, young, and having that unique energy of young adults puts us in a better position to stomach this recession."

Put pessimism in context. T

orabi warns not to let pessimism stop you from investing in the stock market, or taking necessary career risks. "It takes a lot of reminding people, especially young adults, that the economy is cyclical. You might need a history lesson. Things will get better," she says, and when that happens, you'll be glad you're invested in the market. "You can't argue with the fact that you want to retire with money in your 401(k), and the stock market is a great vehicle to do that."

Embrace -- and overcome -- your fear.

Imagine the worst, urges Torabi. Is it that you'll be forced to live in your car? That your house will get taken away from you? "Push that button and let the fear motivate you to a better place," says Torabi. It might mean saving more money, or working extra shifts, or automating your bill payments. Or it might mean educating yourself about how the stock market works and the history of economic fluctuations.

Find your inner entrepreneur.

"If you think you're going to work for a company for five years or ten years, forget it. It's too much of a gamble. This isn't just a recession thing, either," says Torabi. That's why she says it's essential to bring in money from various employers, whether it's catering, teaching guitar, or otherwise engaging in entrepreneurial activities.

That's a lesson Torabi applies to herself, everyday. "I'm a full-time gig-meister now," she jokes. "That's how you stay competitive and secure your finances."

Available at Amazon.com:

Psych Yourself Rich: Get the Mindset and Discipline You Need to Build Your Financial Life

Lifecycle Investing: A New, Safe, and Audacious Way to Improve the Performance of Your Retirement Portfolio

Worry-Free Investing: A Safe Approach to Achieving Your Lifetime Financial Goals

Spend 'Til the End: The Revolutionary Guide to Raising Your Living Standard--Today and When You Retire

The Hard Times Guide to Retirement Security: Practical Strategies for Money, Work, and Living

 

Personal Finance - 5 Ways to 'Psych Yourself Rich'

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