What is financial behavior? I am not an expert in this arena, but I have learned few of the financial terms over the period of time due to my interest. In simple terms, it actually refer to the psychology behind investments in our life. In this article I will try to collect some financial behavior many of us feel regarding investment. Not only that, sometime we feel over confident while expressing our feelings towards such investing decisions. Let’s find out such 5 overconfident financial behaviors among us, let’s which one you are carrying.
Common 5 overconfident financial behavior
Not Buying enough Life Insurance: I know many people who just not believe in life insurance plan or just doesn’t accept the importance of insurance, saying that he/she is confident enough that they will be fine in the long run as they have a very good habit or whatever the reason. In fact they never realize that an insurance policy is not for the benefit of him/her self. Rather it is for the sake of the family in absence of him/her.
Direct investing in Stock market/ Trading: Many people understand very quickly that the return from stock market can’t be compared to any other investment tools. But they took it in a wrong way, as most of them indulge in daily trading rather focusing on long term investment. I have seen couple of my friends sharing about their intra day gain and ample knowledge of stocks in many days, when they got profits. But at the same time I heard just few days when they said that all of their hard earned money is gone due to bad luck.
Thinking Him/Her-Self as Financial Planner: In our country still the concept of hiring a financial planner is not that smooth. Mostly people love to do self browsing and gather knowledge related to investments based on historical data provided by many websites & blogs. You may not be right all the time and there is no harm paying little money by hiring a financial planner in case you really need any assistance. Now a days things has been more smooth with the launch of robo advisers. take help from them to complete you financial planning & take investment decisions.
Buying a House beyond requirement: Buying a home is so easy these days with the help of home loans that one can plan to buy any kind of property. When the concept of affordable housing is rising in every part if our country, the concept of luxury housing also seeing a new heights. Who doesn’t want to have a luxury villa equipped with every amenities & facilities? And when there are banks to provide attractive home loans. But there are people who think its just few lakh more which can be easily achieved with little more home loan, without considering the upcoming planned family expenses like kids, education, travel, marriage etc.
Company Health insurance in Enough: Personally, I am belonging to this category till date as I was thinking the health insurance plan provided by my company is the best one. But like many people, I forget that this cover is till the time I am with the company. One should plan for outside health insurance plan as early as possible, because the late you do the cost will be high and the coverage will be compromised. And I believe the company provided health insurance plan will not continue with me till I die.
Personally, I did not try to hurt anyone, rather observed few financial behavior including myself which is actually not at all helping us in the long run. And many times we try to justify our decisions correct without doing 100% research & knowledge. I hope you will also agree with my points. There might be more such points and you can share the same by writing a simple comment below.