The Most Authentic Guide on Personal Finance and Investments


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Money and Human Psychology - Part 2 of 4

Further to Part 1, we look at various ways to develop a healthy and positive attitude towards money in the balance three parts of this series on Money and Human Psychology.

Developing an optimistic money behavior
Many of us have been brought up with the belief that money is bad. We believe that we can make lots of money only either by cheating or by winning a lottery. We believe that too much money leads to indulgence and extravagance.

The problem gets compounded by the fact that we don’t learn much about money and investing in our schools and colleges.


Therefore, we develop a negative attitude towards money. One cannot expect to attract money and become rich with a pessimistic mind-frame. As a first step, therefore, we should remove all the guilt feelings associated with money.

Money earned and spent in a fair manner is not a sin. Money by itself is neutral; it is we who make it black or white. Lack of money doesn’t make us saints, that we fear that too much money will spoil us. Honest hard work can also make us wealthy. It does not warrant adopting wrong means.

Overcoming the fear of losing
The fear of loss scares us and we opt for the low risk options. But low risk means low returns. This attitude will not create wealth. We may continue earning risk free income, but will lead a life of unfulfilled desires. We will only be left trying to balance our budgets.  

Losses are a reality and we should accept it as a fact of life. It should not deter us from investing. No one likes losing money. It’s not as if the rich never lose. The difference is that they do not avoid risk, but try and manage it.

Knowledge helps us to overcome the fear of losing. Once we have a basic understanding of the risk and rewards associated with various investment options, we can take calculated risks, matching our risk profile.


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