The ability to do well with money has fewer things to do with how smart you are, your college degrees, training, background, formal education, or connections, it's more about how you behave.
I have said before that the emotional part of the money is better than the technical side. Because with money, behavior is the paramount thing. You have witnessed time and time again how the market is influenced by news, interest rates, political views, inflation, etc. This should tell you just how much your finances are affected by how you and the next person behave.
Did a lot of people not flog to those coins that were promoted by Elon musk that season? Of course, they did. Did other people not feel he was being childish and refused to join the train? Surely they did. It's clear that money is deeply ingrained and rooted in our emotions, and behavior, more than in what we know.
Most people get into debt because of greed, insecurities, and lifestyle inflations. Some investors pull their money out of businesses if they feel the risk of losing it all is too much. I have heard stories of celebrities who lost their positions as brand ambassadors because of a scandalous event.
Everything they held onto went down the drain because the brands they promoted were afraid the scandal will take their customers away. Yes, most customers leave behind certain businesses and organizations because of such scenarios. All these are basic proof that your finances are psychological, behavioral, and emotionally influenced.
Additionally, it's worthy of note that people have certain behavior toward money because of their experiences. You can never truly understand why a person who can't afford three square meals a day would steal to survive unless you are experiencing it. And this human cannot fathom why those who have enough food would throw some away in the dust bin either unless they experience the abundance too.
The former might likely want to save and scrimp with everything he has, and the latter might never consider saving to be a good option. Both can switch positions when it comes to savings as well. None of them can tell with exactness why one is behaving the way they do. Why? They are not in either of their shoes, they are not experiencing any of what the other is experiencing.
If you move these behavioral dynamics to employment and unemployment rates, you'll see that the reason we were taught to get schooled and work for our pension and retirement plans had been because of what our parents experienced. In a way, our parents were only trying to shield us from the harsh realities they faced as a result of not having college degrees or watching their mates/children do better financially with a degree.
We can proceed and say that we are all new to this investment, and saving thing because it wasn't a thing in the past. The fact that the pension the government promised wasn't forthcoming is the reason 401(k) was introduced. That way individuals could learn to save their income and be ready for retirement.
This means your feelings about money might shock your neighbor, and his thoughts would do the same to you, but it doesn't mean both of you are crazy. Thus, it's the way you think the world of money, wealth, and fame works that determines your financial decisions and standings. All this and more shows that each of us is new to the game of money, thus, we shouldn't think of one another as crazy folks.
Reference: The Psychology of Money by Morgan Housel
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