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The Psychology of Money 2 - More on Money

by Sheldon Litt, Ph.D.(more info)

listed in psychology, originally published in issue 27 - April 1998

I knew it, I expected it. My last article in Positive Health on money, that perennially popular topic, aroused lots of interest and responses from readers. People, as I suggested, are fascinated by money (who's not?). Even the so-called spiritual gurus who claim not to be at all interested in material wealth on this earth certainly do go out of their way to amass enormous piles of this "illusory" stuff.

Recently I was invited to attend a lecture by one of the more famous (written up in TIME magazine) gurus who was lecturing on Seven Spiritual Steps to Salvation, or something like that – why is it always 7 – why not 6, 8 or 10? Despite the fact that he spoke of the need to forget about such mundane concrete things (moolah), I noted that during the "15-minute pause", his flunkeys were busy selling high-priced herbs, teas, health-cures, books, and assorted paraphernalia of the trade. In fact, the scheduled short intermission was extended to nearly 50 minutes to take care of all the profit-making business. Hypocrisy or good pecuniary priming?

O.K., some readers want to know about the psychology of money in the world of big business. I'm not an expert on such things as stocks, bonds, and industrial corporations, etc., so I asked a very successful colleague over dinner for some of his ideas – let's call him "The Sage"; an extremely wealthy psychologist and financial wizard who has made millions on various deals.

He said that some people are born optimists and others are pessimists. The optimists enjoy life from the very beginning at mother's soft breast, and go through a charmed existence, so it seems, always expecting the best of circumstances. They buy solid stocks, for example, and hold on to them until finally their patience and optimism pays off. Other people are less fortunate; they perhaps had less lucky childhood experiences, and as a result expect the worst. And generally receive it. Not trusting people, they buy lousy stocks, and then lose their money rapidly.

Trying to impress him, I said – sounds to me like William Blake – some are born to eternal delight, and some are born to endless night, or something like that.

The Sage ignored me, and started on the delightful dessert (this was a very fancy restaurant, since he was picking up the tab).

Then he went on to explain – it's not always that simple. Some people tend to lose on stocks even in a bull market. It's because these guys don't really want to win! Take the example of our mutual friend Ben, a born loser if there ever was one. He got lucky once in his life, bought a dollar stock and then watched it go through the roof, up to $3. His investment had tripled in just a few months! But being one of the "losers" in the game of money, he didn't sell out. No, explained the Sage, the loser really wants to lose. He doesn't feel comfortable making a big windfall; unconsciously, he may feel that he really doesn't deserve this huge gain, which he didn't earn by hard work. So what does he do? Unlike the rational, clever investor who plays the market to win, Ben held on to his stock until he saw it fall back down to one dollar, and then down to half a dollar, and even down lower. Now he could feel "at home"; he could moan and groan in his usual complaining style. He's a man used to losing in life; winning is something beyond his comprehension.

The Sage mentioned at this point a well-known and apt quote from Freud (and one of his best, I must add), to illustrate the opposite type of character – the winner; definitely not a "Ben".

This, in fact, describes the psychological make-up of my friend Harry, who is a well-liked successful businessman, a happy family man, and a real Mensch.

Freud: "A man who has been the undisputable favourite of his mother keeps for life the feeling of being a conqueror, that confidence of success which often induces real success."

Freud himself was, of course, much favoured by his mother, and thus he had this enormous confidence in himself and his own ideas.

And my friend Harry also was a much-loved son who has always beamed confidence, which in turn brings him success.

After this wonderful meal, the Sage was in good form, so we continued our conversation as we walked out into the pleasant evening.

For once I had the courage to ask directly about this own attitude about his riches. As usual, he offered me some more nuggets from his storehouse. As Somerset Maugham put it, rationally, money is like a sixth sense that enables you to make better use of your other five.

Now it certainly true that money doesn't solve all of one's problems. But it does, however, he was quick to add, bring on an entirely new set of problems; and that change can be exhilarating and challenging. But it is a mistake to expect, as many do, that heaps of money will suddenly bring a solution to life; that type of mythical thinking is simply an error.

Yes, and there are some minor drawbacks to having wealth. Some poor souls do feel guilt, comparing their state with some of their friends. Many who achieve a fortune complain that they can no longer socialise with their old friends, since their new state arouses too much envy. Another problem is that one is constantly annoyed by people who are trying to swindle them out of their money; and many are simply paranoid that everyone wants to separate them from their gold.

With this, he tired of our talk and walk, suddenly hopped into a taxi, said a quick farewell, and went off to another destination.


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About Sheldon Litt, Ph.D.

Dr Sheldon Litt is an American psychologist who trains professionals in modern methods of psychotherapy. He has taught at many universities in northern Europe. He was trained by Fritz Perls at the New York Institute for Gestalt Therapy.S. Litt, Inedalsgatan 25, S-11233 Stockholm, Sweden. Tel: +468 651 2489 Email:

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