Real Estate Investor Magazine South Africa October 2014 | Page 66

LESSONS

BY VANGILE MAKWAKWA

Why People Lie

About Money
How it impacts investor
behaviour

S

usan Shapiro Barash in her book, “Little White
Lies, Deep Dark Secrets”, argues that 75% of
women lie to the people they love about money
in order to manipulate the way that others see them.
I don’t believe that this statistic is limited to women.
I have a suspicion that men also lie about money,
perhaps even more, simply because they are under
more pressure to look successful. And, let’s face it, the
more money you seem to have, the more successful
people think you are.
How does the need to look good affect investor
behaviour?
According to Shapiro Barash, people lie for selfpreservation. But in the long run, lies box us in, which
makes it difficult for us to have close relationships, in
case people find out the truth about us. This obviously
affects our financial behaviour too, in the following
ways.
1.
Fear of failure and criticism: Fear of failure and
criticism stems from the need to look good, which
affects our ability to innovate, take risks or go against
the crowd when making investment decisions.
2.
Investing in too many risky assets: If you’re lying
about money, you’ll eventually find yourself under
pressure to show that you have money, which will
lead to risky investments and get-rich-quick schemes
in order to make quick and high returns.
3.
Increased debt and spending and decreased
investments: We spend money we don’t have in order
to impress people we barely know, who are also only
trying to impress us. It’s a vicious circle that only
leaves you, the person who’s spending money, as the
biggest loser in the game.

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October 2014 SA Real Estate Investor

4.
Making financial decisions that aren’t in line with
your life’s purpose: When you start playing the “I
have to look good” game, you will make financial
decisions that aren’t in line with your values, for
example, taking on clients that you wouldn’t normally
take on in order to support your lifestyle and keep up
pretenses.
How to stop lying about money
1.
Start caring more about your finances than about
what others think about you: This is easier said than
done. It’s human to fear rejection and to want to
show we are doing well.
2.
Accept that everything is perception: Even if you
were perfect, there will still be people who dislike
you and criticise you for being perfect. Accept it and
move on. Most of the time, people don’t see the facts.
Instead, we choose to create stories about others and
others will create stories about us. It’s called being
human.
3.
Practice authenticity: Choosing to be authentic
means telling the truth and being honest with
yourself and others about who you are.
The fastest way to stress yourself out financially is to
use money to impress others and lie about the amount
of money you have. Yes, you want to play with the
big boys, but that doesn’t mean you have to bankrupt
yourself before you even get to the top. Take your time
and build your investment portfolio your way.

RESOURCES
Wealthy Money
www.reimag.co.za