Financial Psychology

Have you ever wondered why money seems to work so well in some people’s lives and so destructively in others? Why some people control money while others allow it to control them? Or why some of us can manage it so effortlessly to fulfill life’s plans and goals, while others never stop to question how they want it to serve them?

Questions like these are not typically explored. Why not? Its probably because the answers do not lie in cold financial facts. One must look at both the financial and psychological factors involved in money matters to make sense of why people do what they do with money.

Emotions, culture, religion and personality has the major play while talking about Financial psychology.

Culturally, many societies have a believe that Money is evil, and cause of evil. So this is ingrained in the mind since young. So as adults, there is an aversion to money.

Most religion preaches against Greed and somehow Money gets associated with Greed.

Personality. There are many money personalities and the blue print for each is different. This has to be evaluated and analysed.

You only attract what you want subconsciously. That is the reason why we find different people having different ways of handling money.

If you are keen to know more about your personal money blue print, do give me a buzz... Swarna

Financial Literacy

Many people have asked me " why is the markets behaving like this all of a sudden? Why is credit crisis in US affecting us in Asia, etc. etc...

This proves one one thing. Financial literacy is very low. We all know about earning, saving, spending etc. but how to make the best of what we earn is something one has to learn.

Today, I want to talk on some books that a good to start the learning process. You can see some favorite books under my Money books.

I am not going to review any book in particular but most books want to convey the message of good Money management and how to achieve it. Here are some points which are important aspects of Money management

• Make financial security a priority- For everything in life we need a Goal. Without a priority in place, its like driving in the dark. Its also important to have a budget to work on.

• Spend less than you earn- Isn't it logical to say spend less than you earn. However, most of us have problems doing it. Its not what you make, its what you spend makes the difference.
  

• Save and invest regularly.- Its important to save and do that regularly. Its important to have a habit of saving and investing instead of do it by chance

• Pay down debt - The credit crisis now is an example for debt management. Credit card is just for convenience and treat it like the ATM. you can draw out only your money when u go to an ATM, isn't it?

• Own a home- According to Federal Reserve in USA, home owners save 34% more than renter. I think in Singapore, thanks to our visionary leaders, 95% of Singaporeans are home owners. However, the key point to consider a home, is it should be within the budget and affordable. If not in times of despair, losing a house is a problem. This is the major problem in USA now.

Read some of these books listed below and send me your views. If there is any other book you like and would like to share with me do let me know.

Signing off with this quote-"Education is a progressive discovery of our ignorance"-Will Durant (1885-1981) U.S. author and historian

Year of the OX

Gong Xi Fa Chai to all who are looking forward to the Lunar New year tommorrow.

Today, the radio was full of quotes like, the last trading day of the rat year, last working day of the Rat year, traffic news ont he last working day of the lunar new year etc etc....

Rat year was almost like a Rat race. So many highlights. Bad news after another in the Financial markets. The good news was change of Presidency in US and a ray of hope for change.

Why is the world rejoicing so much about him being the President. Apart from the fact he is Afro-American, I think personally think its because we all want a change.

Somehow in the sub-conscious it is registered that the reason for the bad economy or the bad times is because of Bush. Is'nt it the same people who elected Bush twice.

Anyways, we all love change, whether it is a change in year, change in status, change in market, change in presidency. (We just celebrated the English New year and still as excited to celebrate another one)

Its the hope that keeps us all going. The hope that this year will be better than last one.

I too hope that the Year of OX will give me better business opportunities, better friends, better position, better revenues & better relationships and wish that all of you have a good year too.

I am now signing off the watch the last trading day of this Rat year, on NYSE. Swarna