The Psychology of Money - ABSLMF

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The Psychology of Money
The study of the psychology of money is known as
neuroeconomics. Studies show very intriguing
facts about how our brains process money
matters. Lets see the areas that influence and
execute our financial decisions in the Brain.
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The Prefrontal Cortex
The Wise Money-Master Associated with Planning,
decision-making, controlling impulsiveness.
Encourages Sensible, feasible monetary choices
and a desire to save more. Discourages
Unnecessary splurging and excessive expenditure.
Decisions like investing in SIPs, Mutual Funds,
budgeting, timely bill payments originate here.
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Nucleus Accumbens
The Trickster Associated with Positive emotions
like happiness and euphoria -BUT Encourages
Addictive activities like gambling or vanity
spending. Discourages Saving and planning
expenses.
In the world of finance, activities like
short-term trading, short selling, leverage
investing stem from here.
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Nucleus Accumbens
The Misunderstood One Associated with Negative
emotions of fear, pain, anxiety, anger -
BUT Encourages Alertness, cautious and careful
use of money. Discourages Suspicious investment
schemes and bad monetary decisions.
Indirectly encourages you to save more with
balanced investing choices that are supported by
proper research and alertness.
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The Limbic System
The Action Master Consists of the amygdala, the
hypothalamus, the thalamus, and the
hippocampus. Often under high pressure for those
in debt or other financial crisis. Triggers
fight or flight response in the body when
stressed. Prolonged stress may damage the
hippocampus leading to memory problems.
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So What Are You Thinking?
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Mutual Fund investments are subject to market
risks, read all scheme related documents
carefully.