Money: The Source of All Evil?

Psychology 101: The 101 Ideas, Concepts and Theories that Have Shaped Our World - Adrian Furnham 2021

Money: The Source of All Evil?

I sell, therefore I am. You buy, therefore I eat. (Craig Dormanen)

What better way to prove that you understand a subject than to make money out of it? (Harold Rosenberg)

Money changes people just as often as it changes hands. (Al Batt)

The entire economic system depends on the fact that people are willing to do unpleasant things in return for money. (Scott Adams)

Bankers, economists and financiers assume that people, like themselves, are rational with respect to their own money. Their models and marketing strategies are based on homo-economicus: the rational human being. They could not be more wrong. People are ignorant, irrational and a-rational with nearly all aspects of their money. The belief about what money is good for; how best to acquire, multiply and store it; and about the happiness it brings are often demonstrably false.

Studies show that parents rarely talk about money to their children but that children acquire many of their money habits from their parents. Profligate parents beget profligate children; obsessional miserly hoarders are copied by their children or in oppositional triumph spend it all. Surveys show that over 90 per cent of adults would like their children to know more about the financial reality of life than they currently do, but that they are not really confident enough to ensure their children are financially literate, sensible and mature.

The dream to become rich is widespread. Many cultures have fairy tales, folklore and well-known stories about wealth. One story is that money brings security; another that it brings freedom. Money can be used to show off one’s success as well as to repay those who in the past slighted, rejected or humiliated oneself. One of the many themes in literature is that wealth renders the powerless powerful and the unloved lovable. Wealth is a great transforming agent that has power to cure all. Hence the common desire for wealth and the extreme behaviours sometimes seen in pursuit of extreme wealth.

There are two rather different basic fairy tales associated with money. One is that money and riches are just deserts for a good life. It should be enjoyed and spent wisely for the benefit of all. The other story is of the ruthless destroyer of others who sacrifice love and happiness for money, and eventually gets it but finds it is of no use. Hence, all an individual can do is give it away with the same fanaticism with which he or she amassed it.

Money has powerful emotional associations. Ask people what emotions are most frequently associated with money and research provides the following rank-ordered list: anxiety, depression, anger, helplessness, happiness, excitement, envy, resentment.


Money as Security. Emotional security is represented by financial security and the relationship is believed to be linear — more money, more security. Money is an emotional lifejacket, a security blanket, a method to stave off anxiety. A fear of financial loss becomes paramount because the security collector supposedly depends more on money for ego-satisfaction. Money bolsters feelings of safety and self-esteem and so is hoarded.

Money as Power. Because money can buy goods, services and loyalty, it can be used to acquire importance, domination and control. You can use money to exploit others’ vanity or greed. With loads of money one can bribe and control and so feel powerful. Money can be used to buy-out or compromise enemies and clear the path for oneself.

Money is Love. For some, money is given as a substitute for emotion and affection. Those who visit prostitutes, ostentatiously give to charity; those who spoil their children are buying love. Others sell it: they promise affection, devotion, endearment and loyalty in exchange for financial security. Money is used to buy loyalty and self-worth. Further, because of the reciprocity principle inherent in gift giving, many assume that reciprocated gifts are a token of love and caring.

Money is Freedom. This is the more acceptable and more frequently admitted attribute attached to money. It buys time to pursue one’s whims and interests, and frees one from the daily routine and restrictions of a paid job. Money buys escape from orders, commands; everything that restricts autonomy and limited independence.

There are a number of pathologies surrounding money because of all the complicated emotions and associations it has. Five are well-known:

1 Misers who hoard money. They tend not to admit to being niggardly, have a terrible fear of losing funds, and tend to be distrustful, yet have trouble enjoying the benefits of their own money.

2 The Spendthrift who tends to be compulsive and uncontrolled in his/her spending, particularly when depressed, feeling worthless and rejected. Spending is an instant, but short-lived gratification that frequently leads to guilt (and debt).

3 The Tycoon who is totally absorbed with money making, which is seen as the best way to gain power, status and approval. These people argue that the more money they have, the better control they have over their world and the happier they are likely to be.

4 Bargain hunters who compulsively hunt bargains even if they do not really want them, because getting things for less makes people feel superior. They feel angry and depressed if they have to pay the asking price or cannot bring the price down significantly.

5 Gamblers feel exhilarated and optimistic when taking chances. They tend to find it difficult to stop, even when losing, because of the sense of power they achieve when winning.

So what do people in finance need to know about the psychology of money? First, that many well-educated, sophisticated, adults remain ignorant and embarrassed about money issues. They might not understand the simplest concepts and need education before sales. It is a fine line between educating and patronizing a professional and sellers need to be aware.

Second, find out what people think about and do with their money. It will help understand their emotions and associations and ’hot buttons’. Each money type needs a different sales strategy: and probably a different product.

Third, explore more the mythology, symbolism and imagery associated with money and use it in advertising. Using trees for growth is hardly very psychological. Marketing products need more emotional understanding.

Four, remember that you are dealing with sensitive issues. You may be prying into areas where people are very uncomfortable. You may need counselling skills before anything.

Five, give lots of examples and let people take their time. Befriend the client: they may become clients for life because they see you as a wise confidant. Like a psychiatrist or gynaecologist, people have to share intimacies with you. You may think it’s all pretty bland and dull but they don’t.


Forman, N. (1987). Mind Over Money. Toronto: Doubleday.

Furnham, A. (2014). The New Psychology of Money. London: Routledge.

Lea, S.E.G., & Webley, P. (2006). Money as tool, money as drug: the psychology of a strong incentive. Behavioural and Brain Sciences, 29, 161—209.