Comprehending the Behaviorism of Investing and Making Money
Comprehending the Behaviorism of Investing and Making Money
The recent global financial crisis have made us think of various innovative ways to fight against monetary issues and deficiencies, apart from taking help of debt relief companies and their debt cure options like Debt settlement, credit counseling etc. Till date we have taken help of many known and renowned options like debt consolidation and debt management to tackle our debts, but how many of us actually spare a thought in comprehending our money psychology and behaviorisms that compel us to either make wise actions towards proper investing and making money, or make mistakes regarding the same! Knowing the psychology behind our financial investments and how personality traits influence our investment portfolio can actually change the way we invest in low risk mutual funds, medium-to-high risk stocks and bonds, or our company's 401K plan. Let's discover how personality traits affect money habits:
Research and observations state that we somehow inherit our parents' financial attitudes and investment styles. Whether our parents invested in real estate, or they liked mutual funds or they put their money in a secure low-interest savings account, defines to some extent our drive and investment inclinations. Our financial perspective is shaped to few extent by the way our parents treated money in our childhood.
According to the famous author Jacob Bernstein, "Very often traumas during early childhood or elementary school days will have an unconscious effect during adult life." Thus he suggests us to relive those bad financial experiences in a non-threatening environment to release pent-up emotion and fear of handling money. This can free your emotional and mental energy, and allow you to focus on your financial investments which can translate to earning more money in mutual funds, stocks, and bonds.
Explore and comprehend the influence of your relationships on your investment attitudes. Regardless of your social status and whether you are in a relationship, married, single, or widowed, try to view and understand how the opposite gender affects the psychology of your financial investments. For instance a married man with family and children tend to avoid risks due to added responsibilities and in other times we fear the negative responses of our spouse or partner. To make better investments, make sure you and your partner have a common purpose behind your motivation to earn money.
Determine the sole factors which motivate you to earn money. Think about the short and long term goals which influence you to invest money. Define your priorities of life, like an early retirement, a lavish life with luxuries or a superior education. Thus before you proceed to make more money comprehend the factors of motivation and the goals behind it. As knowing and setting a target about where you want to see yourself in few years down the line will help you get there.
Assessing your money psychology does not require any financial and psychological counseling. It is a simple thoughtful action of deciding your innate and acquired personality, attitude and psyche to help you deal with your finances successfully.
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