01st June 2025, Gaurav Kumar Singh
Introduction: The Mind Behind the Money
Money isn’t just about numbers—it’s about behaviour, emotions, beliefs, and habits. In India, despite rising incomes, many still struggle with wealth creation. Why? Because our financial habits are deeply rooted in culture, family values, and societal expectations.
Understanding the psychology behind money is crucial if we want to break free from the cycle of earning and spending and move towards sustainable wealth creation.
In this blog, let’s explore 7 common Indian habits that unknowingly sabotage wealth creation and how you can change your mindset to secure your financial future.
1. The “Beta Ghar Le Lo” Obsession – Prioritising Real Estate Too Early
For most Indians, buying a house is the ultimate financial goal. The pressure to own a home early in life, often before 30, stems from deep-rooted beliefs about stability and success.
Why It’s Harmful:
Early home loans reduce your ability to invest in high-growth assets.
Real estate is illiquid and has low short-term returns.
High EMIs kill your monthly cash flow.
Better Alternative:
Start by investing in diversified mutual funds, PPFs, and SIPs to build wealth.
Rent if needed, and buy a home only when financially ready.
2. Over-Reliance on Gold – Emotional Investment, Poor Returns
Gold is traditionally seen as a symbol of security and status. Families buy gold for weddings, festivals, and savings. But this emotional attachment often replaces sound investment planning.
Why It’s Harmful:
Gold gives lower long-term returns than equities.
Physical gold involves making charges and storage issues.
Emotional buying leads to impulsive decisions.
Better Alternative:
Limit gold to 5–10% of your portfolio. If you want exposure to gold, consider Sovereign Gold Bonds or Gold ETFs.
3. Fear of the Stock Market – Risk Aversion that Kills Growth
Many Indians consider the stock market as “gambling” due to lack of awareness and fear of losses. This results in a heavy tilt toward fixed deposits and savings accounts.
Why It’s Harmful:
FDs offer low post-tax returns (often below inflation).
Avoiding equities delays wealth creation.
Fear prevents financial literacy.
Better Alternative:
Start with Systematic Investment Plans (SIPs) in mutual funds.
Educate yourself gradually.
Use Robo-advisors or certified financial planners.
4. Living for Others – Social Pressure and Overspending
Indian society is tightly knit, but this also brings immense social pressure—lavish weddings, gifting, festivals, and lifestyle expenses to match others.
Why It’s Harmful:
Spending to maintain image = poor savings rate.
Taking loans for weddings or functions = debt trap.
Constant comparison = dissatisfaction.
Better Alternative:
Live within your means, not by societal standards.
Invest in experiences and learning, not appearances.
Learn to say ‘No’ politely.
5. Ignoring Financial Literacy – Depending Too Much on Elders
Traditionally, Indian families depend on parents or elders for money matters. Young adults rarely learn how to budget, invest, or manage taxes on their own.
Why It’s Harmful:
Financial illiteracy = poor decisions.
Blind trust in others = fraud risk.
No financial independence = long-term insecurity.
Better Alternative:
Take charge of your finances.
Read books like The Psychology of Money, attend workshops, and follow credible finance blogs.
Learn the basics of budgeting, investing, and insurance.
6. Procrastinating Insurance – Misunderstanding Its Purpose
Most Indians see insurance as an investment, not protection. Many delay buying term insurance and health insurance thinking they are “young and healthy”.
Why It’s Harmful:
Late insurance = high premium or rejection.
Poor cover = family suffers in emergencies.
Wrong insurance = poor returns.
Better Alternative:
Buy a pure term plan early.
Get a comprehensive health insurance policy.
Don’t mix investment and insurance—ULIPs and endowment plans rarely deliver.
7. No Retirement Planning – “Bachhe Dekh Lenge” Mentality
The most dangerous belief is that children will take care of us. As life expectancy increases, retirement can last 25–30 years. Without proper planning, old age becomes financially dependent and stressful.
Why It’s Harmful:
No pension = no income in old age.
Healthcare costs are rising.
Children may not be financially able to support parents.
Better Alternative:
Start investing for retirement in NPS, EPF, and mutual funds from your first salary.
Treat retirement planning as a non-negotiable financial goal.
How to Break the Cycle: Actionable Tips
Track your expenses and create a monthly budget. Invest before you spend—follow the Pay Yourself First rule.
Start small, be consistent—compounding needs time. Use apps to automate SIPs and bill payments. Learn, unlearn, and relearn about money.
Final Thoughts: Wealth Begins in the Mind
India is changing, and so must our mindset about money. The journey from financial survival to financial freedom begins by challenging old habits and embracing new ones.
It’s not how much you earn—it’s how much you keep, grow, and protect that determines wealth.
Change your relationship with money today, and you’ll thank yourself tomorrow.
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THE MIND UPGRADE 
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