The Most Authentic Guide on Personal Finance and Investments


Words of Wisdom : "A successful man is one who can lay a firm foundation with the bricks others have thrown at him." ~ David Brinkley

Money and Human Psychology - Part 1 of 4

Money signifies different things to different people. To some it denotes security; to some it defines his/her social standing; and to some money is just a means to an end. All said and done, money is just a state of mind. There are people for whom even Rs.1 lakh is enough to feel rich and there are others who, even after having a bank balance of Rs.1. crore, may feel poor.

The human psychology — i.e. the perceptions and attitudes that a person has about money — plays a very important role in his financial well-being or misery (which, I repeat, has no relation to the quantum of money s/he owns)
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Behavioural Science is increasingly being used in many modern-day economic theories. Finance may be a fairly accurate mathematical subject. But it has been observed that in many financial situations the general human behaviour is anything but rational.

For example, there are misers, who will hoard and hoard money. They will live very poorly – old clothes, old house, old furniture, no vacations etc. And then there are the extremely extravagant ones...not only do they spend everything they earn today, but even consume their future income through personal loans and credit cards.

Many people, who either inherited or earned a lot of money, became penniless. Yet there are many who build considerable wealth through financial discipline.

One doesn’t have to become a financial expert to lead a life free of financial struggle. The idea is to become rational and judicious in one’s behavior. The idea is to analyse the various myths and misconceptions that we carry in our minds and correct them. The idea is to overcome illogical behaviour and become more money-confident.

A healthy and positive attitude will make us enjoy our wealth. If not, we will feel discontented even with crores of rupees. What’s the point in being a crorepati, if we still can’t be happy?

The first step to becoming financially successful is to prepare our minds. When we overcome our insecurities and set right our irrational behavior...that limit our financial success...we start understanding our psychological profile much better.
We are able to determine clear financial goals and the road-map to reach them.

We feel confident of achieving prosperity and start acting rationally and positively. 

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Ignorance is like a SIGNED BLANK CHEQUE... anyone can MISUSE it.

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