Mad About
Money
FINANCIAL
FEAR 1
Financial fear refers to
the fear or anxiety that we
have in life regarding our
finances. One of the most
traumatizing financial fear
that people possess is
that ‘a catastrophe will
happen and drain all my
finances!’
Needless to say, this fear
wreaks havoc in many an
individual’s mind, limi-
ting him/her in taking
risks or other important
financial decisions in life.
For example, one hears
about someone’s relative
meeting with a serious
accident and immediately
your financial fear crops
up that what if this hap-
pens to you and all your
hard earned savings and
investments get drained
by sudden unforeseen
medical expenses! You
get traumatized just thin-
king about it!.
Well, the only way to
deal with this financial
fear is consciously and
gradually shifting from
the ‘what if’ to the ‘then
what’ approach! Simply
put, your strategy should
be to think about what
you could financially do
if such an event does
takes place. Remember,
you will always have
things that are under your
control and beyond your
control. Focus on the
former and gradually let
go of the latter. Always
keep 6 months salary as
an emergency fund and
tell yourself that only by
making little changes in
the factors that you can
control, can the uncon-
trollable factors have less
impact if they happen at
all. Lastly, deep breaths.
Everything doesn’t hap-
pen to everybody. Stay
calm and get rich!
FINANCIAL
FEAR 2
Financial fears almost
always keep one from
taking prudent financial
decisions leading to
losing out on great inves-
tment opportunities most
of the time. One of the
most common financial
fears happen to be this –
‘I will lose everything that
I have in the stock mar-
ket!’, and needless to say,
people shy away from
investing in the stock
market even in the face
of seemingly very good
investment options.
That is sad. We slog all
our life in order to make
it big and when such
an opportunity comes,
especially through the
stocks avenue, one shies
away from it just because
of the financial fear. I am
not asking you to put all
your saving in stocks. No,
never. But a well-planned
equity strategy gives you
more ROI than anything
ever can and if someone
cannot take the advan-
WELL, THE ONLY
WAY TO DEAL
WITH THIS
FINANCIAL FEAR
IS CONSCIOUSLY
AND GRADUALLY
SHIFTING FROM
THE ‘WHAT IF’ TO
THE ‘THEN WHAT’
APPROACH!
tage of this just because
of the inner anxiety, then
that’s sad.
So Step 1 – Assess your
risk tolerance level. Ask
yourself how much you
will be comfortable to
lose in case of a market
correction. Let’s say it’s
20%. Once you realisti-
cally think and arrive
at this 20% figure, you
can easily diversify your
portfolio against this
across asset classes and
size of companies, etc.
Step 2; tell yourself that
until and unless you give
100% of everything in the
stock market, you do not
stand a chance to lose
‘everything’. Lastly, always
rememb er that not
investing in stock market
also offers a certain level
of risk since then you are
assuming that inflation
will never erode the inte-
rest on your savings. So
worry less, earn more!
CHANGING
YOUR
MONEY
MINDSET
METHOD 1
Debts have destroyed
many people’s dreams
of becoming rich. Hen-
ce, it is essential you
keep a close eye on
your existing debts and
reduce them to zero as
soon as possible.
METHOD 2
Our typical middle
class outlook makes
us turn our face away
from money. We pre-
tend it is not part of our
life so we do not try to
manage it. This must
change.
METHOD 3
We learn how to ma-
nage our household
expenses basis our in-
comes. But we do not
try to play the market
and look for alternative
routes to make money.
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