Friday, November 17, 2006

Changing Behavior Isn't Easy

A few weeks back, there was a short article on InvestorGeeks about "Why the Poor will Always Be With Us". I found the article thought-provoking, but the point made by <a href="">Jason</a> was particularly interesting.

Jason Commented:

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I'm thinking of my father, who in 2001 bought a brand new Jeep Grand Cherokee because he "needed something to make him happy". It didn't matter that a lot of what made him unhappy were financial problems, which the extra $20k he paid for that car vs. a comparable used car would have helped him out with.

I'm thinking of the guy you know who lives in assisted housing but has a more jewelry than you do and better stereo system than you do.

If either one of the people in the above scenarios had $30k in a "retirement account" they could gain access to, they would find a reason to spend it. The money feels idle and psychologically these people enjoy the scenarios and stories they get themselves into as "broke" people. They've been broke all their lives. They're used to it. They're comfortable with the idea in the same way a battered wife is comfortable. If they had money, they would feel bad for all of their broke friends. If they had money, they would have nothing to talk about anymore because a lot of their discussion revolve around their lack of money.

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Personally, my personal experience in life has shown me that this is true for some people; often times with people I am very close to. I don't think that there is any magic wand that can be waved to change people's behavior.

Some people, in fact, when pressed about their lack of motivation to make positive changes in their lives will get very defensive. I find this to be upsetting and inevitably generates a rift between you and the other person.

Similar to other issues which can have psychological roots, our treatment of money can become addictive. We can become addicted to trading, or investing. We can become addicted to becoming apathetic and lazy about our money. Behavior is repeated over and over and over again for most people.

I've recently applied the idea that I cannot force anyone to change to financial matters. However, by blogging and being up-front about what I am doing in my own finances, I have become more confident. And naturally it has helped people around me to start investigating their own finances and ask questions and get advice.

I don't think its about being right or wrong. Rather, it is about taking control and being responsible for the outcome of your actions (or lack thereof). Once we make conscious choices, we can be confident that they were the right ones and become content and satisfied. It's when we don't focus on finances that problems start surfacing.

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