Tag Archives: financial behavior

Why smart people do stupid things with money?

Smart people

It’s a pretty good question, is not it? How do intelligent people manage to do things with money and after a while become totally disappointed with their “successes”?

I suggest you think a little bit!

And here I do not mean people without financial education or any other kind of education.

Let’s think of intelligent people who have completed a faculty or a master and who have obtained a job because of their competencies or who have developed a start-up that has become a “small profitable money machine”. How do they become totally disappointed with their own financial situations, even though they have earned a lot of money over the years?

Here are three of the most common reasons:

  • They have a disastrous financial behavior. Although there are people who have extraordinary professional, social or family behavior when it comes to financial behavior, they completely ignore it!

          They are implusive consumers, meaning “perfect” for traders. Buy anything at any price. If they like something, they put in a basket without considering how much money they have available until the next salary. “I even withdraw money from my credit card if I do not have any money left in my salary account”. You’ve heard of such people, right?

         The first step in changing financial behavior is definitely analyzing your own behavior. If it’s not one you can be proud of, you can change it. Instead, if you go like a ostrich – just put your head in the ground and deny your own financial situation – it takes only a short while until the frustrations and shortcomings will arise.

  • They omit the financial planning activity. They do not have financial goals, they have no clearly defined plans to follow, and this is why they do not take into account the financial planning activity. Surprisingly, all people know that without a plan whatever it is financial or any other type, the chances of success tend towards zero.
    To increase your chances of succeeding in what you propose, take a pen and a sheet, write down your short, medium, and long-term financial goals, make plans for action, and set up tight financial targets.

          If you want a house, set the amount of money you need, the detailed plan to get that amount, the intermediate targets delimited by clear terms and get to work. Without action, the results are always zero!

  • They do not have information, skills or financial skills. The result of not very profitable investments is often the lack of understanding of financial products and services and business investment in areas that they do not know.

          I’m sure you’ve heard questions like “I have 10,000 euros and I do not know what to invest in.” Or “What are the most profitable businesses?” Often, those who ask for such questions are people who lose money because of their lack of skills and entrepreneurial experience.

         Lack of understanding of financial products and services such as savings accounts, deposits, investment funds, shares or the Forex market can also cause a small amount of trouble if you do not understand how they work.

       Developing a “healthy” thinking, how the most important financial products and services work, and developing entrepreneurial skills can help you increase your personal income.

Do the money come to you at the speed of the turtle and go with the speed of the rabbit?


If you feel the money are coming to you very rarely or hard and going very fast, you should do something different than what you have done so far, that’s clear!

What can you do differently?

Here are some suggestions:

1. Manage your finances. This would be the first step to see where the money comes from and where they go. It is also the oldest advice you have received from grandparents, right?

Perhaps too simple, but once you start managing your money you will become more aware of the decisions you have to take and act smarter.

2. Change your mentality. If you grew up in a family where money is not being discussed, or if you feel that you are not earning the money you deserve, you probably have a poor man mentality.

You may think that everyone is “busy”, that you can not develop a lucrative “honest business” or that “you are not ready enough to get a good job”. If you think so, I advise you to talk to people who are business owners or friends who have financially worthwhile financial situations.

3. Change your financial behavior. It can not change overnight, but right now you can change the way you spend your money.

4. Answer the question: “Why do money come to me with the speed of the turtle and go with the speed of the rabbit?” Try to answer this question, I’m sure you know the Solution! … and with perseverance I am convinced that you can improve your financial situation.


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