7 financial superstitions: Which ones are worth keeping?

Posted by Hakyun Morrissey.
We all have superstitions drummed into our heads by our moms, who in turn learned them from their mothers—and so it went, down the generations. We, however, are far too modern and much too rational to pass them on to our kids, right?
Actually, superstitions have nuggets of wisdom embedded in them—valuable, even in our digital age. Here are seven related to money and what they can still teach us:
  • A purse on the floor is money out the door. Treating your precious belongings with disrespect was once thought to tempt fate—perhaps even divine retribution. This proverb is still useful for anyone who carries a wallet or pocketbook around in public. Putting your purse on the floor instead of on top of a restaurant table, for example, makes you more likely to forget it on your way out—or for it to wind up in the wrong hands.
  • When gifting a purse or wallet, make sure it has a little money inside. Why? Because “money attracts money,” of course. And there’s no mysterious law of attraction at play. When you invest money, it can generate compound interest—as if by magic. Enclosing a dollar in the wallet gifted to a child sends the message that no account should ever be empty. Even a small initial deposit has the potential to snowball into something substantial.
  • Find a penny, pick it up, and all day long you’ll have good luck. This is a pretty rhyme that doesn’t always make good on its promise. I’ve picked up pennies before and had awful luck for the rest of the day! However, I teach it to my kids because it gets them in the habit of exploiting financial opportunities, no matter how small, wherever they encounter them.
  • Avoid the number 13. Ever played the lottery and included your “lucky” numbers? Or maybe your stocks went down on Friday the 13th and you attributed your misfortune to the date? Well, consider that in China, the number 4 is way less lucky than 13 because it sounds similar to the Cantonese word for “death.” While Americans favor 7, it’s number 8 that’s fortuitous on the other side of the world. Due to this superstition, Chinese consumers are prepared to pay more for a package of 8 than 10 tennis balls, for example.1 In order to feel “lucky” in financial decisions, people seem willing to pay a premium. Lesson learned: Actively avoiding “unlucky” numbers is not only irrational, it can cost you money.
  • Shaking your legs will make you lose money, according to Korean tradition. Seems like commonsense advice for anyone who carries coins or other assets on their person—especially those with loose pockets. Even if you don’t, there’s a sound physiological, if not psychological, reason for sitting still—it allows us to strive for inner peace and mindfully let go of that consumerist craving for more stuff.
  • Pay off your debt in the sunshine. In the Philippines, it’s bad luck to pay off your debt at night. There’s some logic behind that. You’re more likely to miscalculate at night when it’s dark and you’re tired. Although this advice has less applicability in our age of online transactions—if anything, sunlight makes your screen less visible—I do like the metaphorical aspect. We should expose our credit card and other debts to the light of day rather than brush them under the proverbial carpet.
  • Throw a coin and make a wish. Rome’s Trevi fountain brings in thousands of euros per day, not due to any admission fee, but rather our tendency to romanticize—we toss coins into water sources hoping that our wishes come true. Similarly, putting all your resources into a failing project that you’re emotionally attached to—hoping that it becomes miraculously successful—may not pan out. Economists refer to it as the sunken-cost fallacy, and the rest of us call it "throwing good money after bad." I love a good romance story, but when it comes to money, I recommend being disciplined and not clouded by cognitive biases.
     
Notice how I included seven superstitions instead of, say, 10? “Lucky” numbers and rituals still have a hold over us—perhaps they always will. Rather than dismiss these old-fashioned notions as a load of irrational nonsense, I think that many are worth keeping—as long as they’re viewed through a skeptical, scientific lens. After all, they enrich our language and culture—and give us moms more to hand down to the next generation.
Dollars have value—but so do the proverbs, idioms and superstitions that remind us to look after them and invest each one wisely.
1 “The effect of superstitious beliefs on performance expectations,” Academy of Marketing Science, September 2008, https://pdfs.semanticscholar.org/7d59/d109260d4ea48fed97e96485df9c1a8965cd.pdf.
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November 5, 2018
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