Your investment strategy might have less to do with market data and more to do with the dinner table you grew up around. The way you think about money, the risks you take, the risks you avoid, often trace back to lessons you didn’t even know you were learning as a kid.
Scarcity vs. Abundance Mindsets
If you grew up hearing “we can’t afford that,” you may carry a scarcity mindset into adulthood, focusing on protecting what you have rather than pursuing growth. On the other hand, an abundance mindset often fostered in financially stable households can make you more comfortable with taking calculated risks. Neither is inherently right or wrong, but both can quietly influence your investment choices in ways you might not realize.
The Impact of Economic Events
Formative experiences like living through a recession or a market boom can leave a lasting imprint on your risk tolerance. A teenager who saw their parents’ savings vanish in 2008 may be more conservative in their 30s, while someone who came of age during a bull market might have a higher appetite for volatility. These early encounters with economic cycles can shape your comfort zone more than any financial textbook.
Unlearning Unhelpful Money Scripts
Financial psychologists use the term “money scripts” to describe the unconscious beliefs you carry about money.1 These scripts like, “debt is always bad” or “investing is only for the wealthy,” can serve you well in some situations, but they can also hold you back. The first step in rewriting them is recognizing they exist.
The Danger of Inherited Investment Biases
Sometimes, we adopt family investment habits without questioning whether they fit our goals or the current economic climate. Maybe your parents avoided the stock market, or maybe they chased hot tips from friends. While these choices may have worked in their time, they’re not automatically the right fit for you today.
Your financial story started long before you ever made your first investment decision. The good news is, you can choose what comes next.
Source
1 Klontz, B., Britt, S., & Archuleta, K. (2015). Mind over money: Overcoming the money disorders that threaten our financial health. Wiley.
