Psychological Problems in Finance

META AI

Introduction

Hivians on Leofinance, in short all Hivians seeing this article, I welcome you to my report on my research on the psychological problems of finance using me and my close friends as case studies as well as additional information from the internet, so let’s delve deeper

Nature

The nature of the psychological problems of finance as the name implies, is a concept of the mind which is best visible as our behavior towards finance, this psychological concepts are concepts in the mind that reduces our chances of achieving financial health which is being comfortable with our financial status while still seeking to improve. Everything in life stems from the mind because the meaning of each and every activity is being made in the mind, which means value is also a concept of the mind and as such a conflict distorting this value from being achieved is usually a technical problem of carrying out the activity which is as a result of an undelaying concept in your mind buried deep in your sub-consciousness [you’re not aware of]; fighting your value concept from materializing.

Types of Psychological Problems in Finance

Fear of Missing Out [FOMO]

This is a core and common psychological problem, most people are familiar with this, it can easily be relatable to the feeling of being left behind; abandoned which a lot of people fear especially when it comes to finance, we all want to move together but that shouldn’t be the case of everything, pairs change consistently and refusing to let this happen after missing an opportunity because of any factor don’t try to join in, figure out if it’s late or not. If not you will jump right in at the end of a trend and lose while others gain, which is basically what this problem is all about.

Greed

This is also a core and common psychological problem, it involves going for more than is expected of an investment proposal all because it’s still looking good without applying risk management, the main reason investment proposal are created is to check the viability of the investment as well as it’s expected returns and while doing so be realistic [apply risk management] and when actually practicing, try your best to stay off holding the investment or pushing it beyond the planned expected return, if you feel too motivated to do so reduce the risk below your risk tolerance [save some profit] and let it ride.

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Worrying

This is a situation which usually occurs when one hasn’t set a risk tolerance level or goes beyond the planned risk tolerance or performs poor planning [doesn’t trust the information source] causing the individual to be too attached and misinterpret the data given and eventually lead to loss of investment or little reward due to not sticking to plan.

Financial excitement/Pride

It is quite on the opposite side of worrying, it also include worrying at a later stage as it causes the individual to go beyond their risk tolerance/poor plan and when it start looking fuzzy worry begins basically it causes excessive confidence. It’s because of this people get scammed majorly as the individual fails to seek proper information before engaging in it, it is a sensation highly impacted by dopamine.

This are the majors in my opinion aside Financial laziness and the following do well to research on them;
• Compulsive buying disorder
•Gambling addiction
•Perfectionism
•Workaholic disorder
•Financial infidelity
•Investment obsession [closely tied to financial excitement/Pride]

Conclusion

I do hope you enjoyed your read, thanks for stopping by, love to hear your thoughts.