Updated: July 23, 2021
I’ve spent a good deal of time talking to people about their financial problems.
In most cases, their money troubles can be traced back to bad decisions they’ve made, and continue to make unconsciously.
Particularly, emotional mistakes that they repeatedly commit severely affect their ability to change their financial circumstances.
Check yourself against these four emotional mistakes that might be causing you to remain poor.
Not managing your FEAR
A lot of people are afraid to invest because they don’t want to lose money.
However, these same people are not afraid to go out on the streets and risk getting hit by a car, being struck by lightning, or falling into a manhole while walking – all of which could lead to death.
Why? Because they have learned how to properly cross the street. They know that the chance of getting struck by lightning is remote. And they just need to watch where they’re walking to avoid falling into an open manhole.
To manage your fear of losing money in investments, you just need to adequately educate yourself.
Learn how investments work, choose those that complement your risk appetite, and monitor your portfolio regularly.
Education is the best way to manage your fear when it comes to investing.
Not controlling your GREED
Greed is an unhealthy addiction because it makes you want more than what’s necessary, which puts you at risk of losing what you already have.
It’s important to realize that you will never get enough of what you don’t really want, and this includes money. Yes, you don’t really want lots of money. However, what you do want is to be able to afford your dreams.
So what’s the difference?
You don’t really want millions of cash. What you do want is to take that trip around the world. You don’t really want lots of commas in your bank statement. What you do want is to give your family a secure future.
You are not working, saving, and investing to simply accumulate wealth, but because you want to be able to live life to the fullest with your loved ones.
Knowing the difference means selling your stock market shares because the money you’ll get is enough to fund your child’s college education, and not feel regret if the price continues to go up.
Knowing the difference means redeeming your mutual fund because its value is already enough to buy your dream house, and not feel bad when the market spikes upward the day after.
The best way to control your greed is by setting financial goals, so you’ll know exactly when to cash in on your investments.
Living simply on HOPE
Being hopeful for the future is good, but it must be coupled with action.
I’ve seen too many people dream of a financially free tomorrow, but never do anything concrete to achieve it. They simply wish, and then wait for something good to happen in their life that will change it for the better.
I’ve seen it in people who play the lottery every day. I’ve seen it in people resigning to just look for a rich spouse. And I’ve seen it in people choosing to drift through life because they’re expecting a big inheritance in the future.
There’s nothing wrong with hoping for good things to happen, but realize that doing nothing else but hope puts a pause on your happiness, and life is not meant to be lived that way.
There’s always something you can do other than just living simply on hope.
Lingering too long on REGRET
Regret happens when we feel that we have lived our life the wrong way.
When we commit mistakes from which we believe we can no longer undo, it can be something that we did or failed to do.
All of us have that feeling, and it can be as small as missing a party you’re supposed to attend, or as large as wishing you never invested in a particular company that turned out to be a scam.
We all make mistakes, and we will continue to commit them. When this happens, accept the consequence, learn the lesson, and do your best to move on; avoid having your thoughts linger on what should or could have been.
Being mindful of your actions, and never losing that desire to become a better person will help you overcome the paralysis of lingering regret.