In this blog article, we’ll investigate deep into the psychology behind money addiction and its potential to disrupt your life. Join us as we explore the signs and symptoms, including compulsive spending, debt, and financial dependency, to help you gain a better understanding of this often underestimated issue.
The Context
Money has never changed anyone, it just magnifies who they are — Baylor Barber
In life, money is necessary, but it’s not the source of all evil. To advance and move on, you require it.
Is it conceivable, though, for someone to become unhealthily dependent on producing more and more leading to money addiction?
What is Money Addiction?
If this message offends you in any way, you are urged to come clean about it and get out of the hole. We can become depressed and put our quality of life at risk by adopting certain attitudes.
The outlines of most money addictions are not readily apparent, while few are. Some of these obvious expressions are simple to identify, such as a money gambler, investment speculator, or someone who is obsessively preoccupied with flaunting luxury clothing or brand-new, pricey possessions to impress strangers.
One of the defining characteristics of people with substance use disorders is an excessive preference for smaller-immediate benefits or satisfaction over larger-later rewards, also known as “delay discounting” or “temporal discounting.”
Surprisingly, this still applies if you experiment with investing. In his best-selling book “Coined,” American novelist, musician, producer, former naval officer, investment banker, and financial professional Kabir Sehgal explores the fascinating physiological impacts of money.
His citations highlight the peculiar impact money has on the brain, which is comparable to cocaine addiction.
According to Mr. Sehgal, brain scans on people who were about to make money were performed numerous times by neuroeconomics (scientists who study how money affects the brain), and the results were astounding. The research demonstrates that these people’s reactions to making money in their “pleasure regions” were comparable to those of cocaine users.
People with chronic cocaine use disorder showed increased activity in the dorsal striatum and the dorsolateral prefrontal cortex in a comparable but separate study (DLPFC) – Different brain regions. The dorsal striatum is thought to play a role in habit-building.
Dopamine levels, which are most closely linked to pleasurable emotional experiences or “pleasure centers,” are highly correlated with drug demand for quick satisfaction or pleasures.
Even while this sounds concerning, the difficulty seems to be in identifying the covert indicators of money addiction that anyone may be experiencing right now.
The Signs of Money Addiction
1. Being obsessed with money
This mindset is constantly focused on the thought of earning money or gaining more money. Therefore, this behavior is driven by a desire to make money.
Such activities could include developing unethical ways to generate money, gambling, purchasing lottery tickets, constantly pursuing stock tips, or becoming psychotic or cruel at work in the hopes of receiving pay raises, publicity, or other forms of instantaneous reward for the brain.
2. Being in denial
When someone has a money addiction, they often have difficulty understanding their income, gifts, savings, spending, and debt.
Many people frequently reside in a murky financial scenario where they are unaware of the amount of money in their bank account or the complete amount of debt they owe their credit card provider.
Additionally, they can be living in denial about their financial situation, which could lead them to splurge and lead an extravagant life. They eventually get buried in debt and declare bankruptcy as a result of this. Living in denial can also take the shape of not having any financial goals, such as a retirement plan or emergency fund.
In these situations, some people have the unrealistic tendency to believe that a solution will present itself as the issue emerges. Denial may affect anyone; it’s not just reserved for compulsive spenders and borrowers. People who hoard too much money and rarely spend it are more likely to experience it as well.
These people frequently fret about their bank balances and think that the more money they have, the happier and more content they will be. However, most of the time, the money in their accounts will never be enough.
Even while these elements continue to ruin people’s lives, denial prevents them from getting help.
3. Self-image and finances
People with a money addiction frequently think that their self-worth and self-image are dictated by their income, the quantity of money in their bank accounts, or the amount of money they spend.
To gain praise from strangers, some people display their glorified versions of private indulgences on social media, which is a common example of this kind of conduct.
On the other hand, hoarders go so far as to avoid social gatherings or occasions where they are expected to spend money out of fear of losing it.
4. Engaging in risky behaviors
This is a characteristic shared by those who are driven by money.
They frequently participate in risky activities including gambling, excessive stock market trading, and speculations in search of rapid gains and overspending.
This happens even if the over-spender or gambler cannot afford to sustain possible losses.
Contrarily, it is also to be noted that not everyone who qualifies as having a money addiction engages in risky activity to boost their income.
Consequences of money addiction
Money addicts need money to feel content and joyful, but the feeling is fleeting, so they end up thinking of additional ways to increase their income. Due to the shame that comes along with it, subjects could also feel the need to hide this damaging activity, which could lead to increased impulsive gambling or purchasing.
Consequences could be as detrimental as getting divorced, losing all of their possessions, or declaring bankruptcy. Due to these persistent practices, they could lose confidence in themselves and start to question their skills.
All of this eventually results in melancholy and darkness.
Conclusion
It’s critical to identify the psychology behind this very stimulating reward system to comprehend the fundamental goals of investing.
All of us cannot live a complete and meaningful life when we are overly dependent on anything.
Money operates similarly. Every person’s ability to make decisions is influenced by their relationship with money. Remember that while money is necessary to keep the wheels turning in today’s world, it only does so up to a point and must not become an obvious obsession. No matter how wealthy someone is, if it gets into their head, they generally won’t be able to make any progress in the world of serious investing.
Our goal here is to assist you in developing the solid viewpoint that a successful investor needs to have. As we prepare for our next piece, we would like you to assess your current circumstance and draw some boundaries if you see any warning signs. If you feel you are going through a phase of money addiction, please seek support here.
Frequently Asked Questions (FAQs)
1. What is money addiction, and how does it manifest?
Money addiction is an unhealthy dependency on acquiring more wealth, often leading to compulsive behaviors such as excessive spending, gambling, or risky investments. It can also manifest as an obsession with accumulating wealth to enhance self-worth or social status.
2. How can I recognize if I or someone I know is struggling with money addiction?
Signs of money addiction include obsessive thoughts about money, denial or ignorance of financial realities, tying self-worth to financial success, and engaging in risky financial behaviors despite negative consequences. These behaviors can lead to financial instability and personal distress.
3. What are the psychological factors contributing to money addiction?
Money addiction can stem from various psychological factors, including the desire for immediate gratification, a distorted sense of self-worth tied to financial success, and the pursuit of status or recognition through wealth accumulation. Additionally, neurological studies suggest that the brain’s response to making money can resemble that of addictive substances, contributing to compulsive financial behaviors.
4. What are the potential consequences of money addiction?
The consequences of money addiction can be severe, including financial ruin, strained relationships, and emotional distress. Individuals may experience bankruptcy, divorce, or loss of assets due to excessive spending or gambling. Moreover, money addiction can lead to feelings of shame, guilt, and depression, impacting overall well-being.
5. How can I address or seek help for money addiction?
Seeking support from financial advisors, counselors, or support groups can be beneficial for addressing money addiction. It’s essential to acknowledge the issue, set boundaries around financial behaviors, and develop healthy coping mechanisms. Additionally, practicing mindfulness, budgeting, and seeking professional guidance can aid in overcoming money addiction and restoring financial stability.
🔔 Investing is expensive, but leaving comments on this blog is free!
2 Comments
Money dependence is an epidemic of massive proportions now. I still miss the good old days when folks were happy with simple things and modest life.
The best thing I like about this blog is the choice of topics. Unusual, yet very effective to keep the readers glued.