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Money, Greed, and Fear


elephant rider conscious thought automatic behavior

❝Gratitude will act as an elixir that will gradually dissolve the hard shell of your ego.❞ -Sam Keen

I'm standing at the front of the room as a class full of children finds their seats. It's 2016, and my colleague, Rose, and I are giving an introductory presentation on investing.


I try to convey the difference between making financial decisions logically and emotionally. I tell them that many financial decisions made emotionally are done out of fear or greed. People who are too conservative and don't take enough risk do so because they are afraid of losing money. People who are overconfident and take too much risk are driven by greed. That seems to make sense to the audience, so I sit down with a feeling of pride.


Next, Rose describes the fear of missing out, commonly called FOMO. She makes the case that what I referred to as greed can be thought of as FOMO. After all, nobody wants to sit by with an average return when their friends make tons of money.


Suddenly it hit me that it wasn't just the audience getting a lesson today. I am getting schooled as well. I've not thought about greed in terms of fear before.


It turns out I’m always learning.

fear and greed

FEAR


Fear drives a lot of human behavior. Fear is an emotion that heightens our awareness of potential threats. Fear is directly related to our need for safety and security, one of our core needs.


Fear shows up in personal finance anytime the stock market starts to drop. People are afraid of losing money because their money represents their s