Psychologists have demonstrated that people are “ what you think and feel,” a loose translation of a very serious reality that run our lives. What we experience from you is what has been brewed in your mind. It is your external expressions of your reaction to the same environment i and others are reacting to concurrently. For example, whenever people are handling an investment decision, and they have the same amount of money and similar opportunities, they would take on different levels of investment due to their difference in risk appetite.
Some people would put the money on safe bank deposits because they fear they could lose it all, while others taken on risk business ventures and actually lose it all or double their fortunes. The bank deposit does not grow, and the interest paid is a mere adjustment for the purchasing power lost over the waiting period. On the other hand, taking on a business venture exposes the person to having to manage the risks inherent in the business carefully even just to recover the money invested in it, and possibly make something extra.
Perhaps, we should be asking the cardinal question, why do people respond so differently to their environment?
When we little children, our parent told us what to do (not do) and we were consistently reminded of things we did which had been cautioned against. Our failures were pointed out by well meaning parents and teachers in away that made us feel that something was wrong with us rather than the fact that something could have been wrong with our behaviours.
The resulting self doubt is detrimental all through your life even into old age because it is resident in your mind ; in the sub-conscious part of the brain, where all experiences are stored and recalled on need basis. You have to deal with it, because it impedes learning such as from taking risks. For example, take a look at the events at the Nairobi Stock Exchange since the Kengen Initial Public Offer of shares (IPO). The economic environment during the Kengen IPO, the stock valuation and the pricing was so right that anybody who put some money in the share made some money. People who had sold their cows to buy shares made money and convinced themselves that their decisions were right, whether they were well informed at the time of such action or not. The resulting bouyance was to be seen in how the masses subscribed to a very poor share – Everready Batteries, and harvested as much loss, when any well meaning investors should have known that this company had not future.
It matters that people, express their inner situations in their external interactions and that indeed the much needed change starts with a change in the thinking. Perhaps we would be much better people, if we considered consulting with other people who had similar experiences, to further inform our opinions before taking any on big risk actions.
We have to overcome our inner-self to taste the feeling. If you feel a chill before investing, take it head on with small portion of your money. Study the investment while holding it , because you will not focus on it if it does not affect you. How you feel cause your mind to go to work, to start finding out more information.
Investing is one school where people learn while at it. You have to buy shares to experience the movements in share prices and to imbibe the reasons behind a collapsing share price or those pushing it up. In the other hand understanding real estate require you to engage face to face with drivers of value, and in particular the specific driver of value operating on the ground where the investment is located. It is amazing how fear can impede learning.
Patrick Wameyo, Financial Literacy Educator and Entrepreneurship Coach. Email This email address is being protected from spambots. You need JavaScript enabled to view it.