{"id":19778,"date":"2023-03-10T09:00:06","date_gmt":"2023-03-10T08:00:06","guid":{"rendered":"https:\/\/my-life.lu\/?p=19778"},"modified":"2023-03-27T08:03:11","modified_gmt":"2023-03-27T06:03:11","slug":"precarity-what-we-can-learn-from-the-rich-51080","status":"publish","type":"post","link":"https:\/\/my-life.lu\/en\/precarity-what-we-can-learn-from-the-rich-51080\/","title":{"rendered":"Precarity: what we can learn from the rich"},"content":{"rendered":"
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In recent years, both the COVID-19 crisis and rampant inflation have contributed to a much weaker overall economic situation. Alongside companies, households have also seen their means dwindle and their financial security eroded. This impoverishment can be overwhelming and we may struggle to see light at the end of the tunnel. This is not surprising \u2013 we tend to take a blinkered approach in such situations! It may be useful to look for inspiration from a better understanding of the state of mind of successful people to help us shake off this feeling.<\/p>\n

As well as material difficulties, becoming poorer creates a psychological burden that only increases over time. And this is exactly what we need to address first of all in order to break this downwards spiral. As we become poorer, it occupies all of our attention and eventually erodes the mental resources that we desperately need in order to cope and improve our situation.<\/p>\n

Limited mental resources<\/h2>\n

Everyone knows that if you don\u2019t get enough food it has an impact on both your mental and physical ability. When we are undernourished, our body and mind activity slows as we try to save energy, and we are more susceptible to weaknesses and mistakes. But are you aware that when we are short of money this also has an impact on our cognitive ability?<\/p>\n

When we are short of money this has an impact on our cognitive ability.<\/p><\/blockquote>\n

When we are faced with financial difficulties and misfortune, our brain is faced with a huge quantity of complex information to process, things to prioritise and decisions to take. We are required to make difficult financial trade-offs, just as our body prioritises different organs when faced with a lack of food. When we mobilise a major part of our limited cognitive abilities to tackle financial decisions, this situation tires our brain to the same extent as a physical shortage!<\/p>\n

Scientific research has shown that our state of mind when we take decisions when we are short of money is similar to that of a person who is permanently sleep deprived! The impact is so great that the same research suggests that a major loss of income or poverty can temporarily reduce an individual\u2019s IQ by 13 points. In addition to objective material difficulties, reduced cognitive ability hampers the ability to find solutions and improve the situation. This explains why being short of money stops us taking the right decisions.<\/p>\n

What does this mean in real terms for someone who feels trapped in an endless tunnel of poverty? They are unable to improve their financial situation, not because they are less capable than the next person, but because their situation undermines their abilities at that specific point in time. A different person in the same situation would struggle in the same way. Recognising this simple fact removes the onus of guilt and should act as a confidence booster.<\/p>\n

For example, there is one study entitled \u201cPoverty impedes cognitive function\u201d carried out in India among farmers by Mani, Mullainathan, Shafir and Zhao. Their research highlighted that farmers took worse decisions for their financial wellbeing just before harvest time (a period when they lack income and financial resources) than afterwards, i.e. when they were in a better position to cover their requirements and envisage the future more calmly.<\/p>\n

So it is worth stressing this point again: with a few exceptions, precarity is not caused by a lack of ability \u2013 financial precarity reduces our mental ability! A personal financial crisis<\/strong><\/span><\/a> is the source of both material and cognitive difficulties. The good news is that this cognitive impact is reversible. Neuroplasticity means that our brains can be rewired to follow more virtuous decision-making processes.<\/p>\n

To achieve this, we must first understand the biases that take over our brains when we are faced with major financial challenges, before then looking for inspiration from the positive practices of those who achieve financial success.<\/p>\n

The parasitical thought processes at play in precarity<\/h2>\n

There are many thought processes that are damaging for a person who is struggling financially. Here are just a few of those:<\/p>\n