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Money and Human Psychology - Part 3 of 4

Ignorance is not bliss
Many of us have a mental block to numbers and finance. They all seem Greek and Latin.

We take lot of precautions, when it comes to protecting our house – locks, safety devices, watchmen etc. But it is sad that we don’t take similar precautions when it comes to managing our money. We will sign forms, issue cheques and invest our hard-earned money, without even understanding at least the basics of it. We blindly trust our broker or friend or relative.  

As far as our money is concerned, ignorance is definitely not bliss.

The risk of fraud is of course a point that one must consider. More important, however, is the mismatch that may happen between our investment needs and the scheme’s objectives.

Since only we are aware of our financial perspective, only we can decide whether a particular scheme suits our profile or not. Sure, we must consult a financial expert, but the final decision must be made by us after suitable assessment.

Therefore, some education and understanding is a must. The investment world is huge and sometimes a bit complex, but still not difficult enough for one to remain completely ignorant.

Herd mentality
Should we buy the latest model of the car, just because our neighbour has bought one? Should we invest in gold, just because everyone is doing so? Is money is the only symbol of success?

We face a lot of financial misery, when we try and emulate others. We only create grief and jealousy for ourselves when we live our lives based on the others’ standards.

Each one of us is unique. Therefore, we need to have a unique definition of happiness, which applies to us only. Many times when we get what others have, we realize that it was not really worth it.

If we equate our self-worth with our bank balance; if we flaunt our wealth to make others jealous; if we are easily influenced by others’ opinion; we are only reflecting our ‘poor mindset’. Such thinking only demeans and limits ourselves.

We have to stop being part of the herd and make our own identity.

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

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