The Emotional Side of Wealth
Wealth is about facts, figures and money, right?
No, that is only half the equation.
Wealth has an element of emotion in it. In essence, the management of wealth is about the management of self.
You are in control. You are no longer in control only if you adopt a ‘victim’ mentality whereby you let circumstances (in this case, finances) take control. That is why casinos make money year in year out. They are banking on one fundamental human trait – greed.
Financial institutions and credit cards do the same. They know most of us cannot resist the temptation to spend. Advertisers employ psychological tricks to get consumers to part with their money.
And they do it all the time. As long as they are able to appeal to your emotions.
“Logic opens the mind but emotion opens the wallet”?
The next time you make a purchase ask yourself whether the buying decision was based on logic or feelings. That’s how the word ‘impulse buying’ comes about. Of course, it comes hand in hand with the word ‘buyer’s remorse’.
My philosophy on maintaining wealth hinges on a much simpler model than the real financial consultants out there who will dazzle you with facts and figures. Let’s examine a few basic concepts:
- If your assets override your liabilities, you are ahead of the curve. (eg. If each month you are only spending 2000 while earning 3000, you are technically financially free (with the assumption that your lifestyle remains constant and the inflation rate is at 0 %.).
- Do you keep track of your expenses?
- Do you have a clearly defined set of financial goals? First of all, you need to determine your financial health. If you do not know where you are now (financially), how are you going to determine where you will be going?
- How can you have the lifestyle you want without hurting your finances and not sidetrack you from achieving your financial goals? Get creative with your spending, you will be surprise how much you can save and how far you can stretch your money.