Meditation may be good for your brain — but bad for your finances – MarketWatch
Mindfulness meditation might be good for your well-being, but the process of non-judgmentally focusing on the present instead of, say, the future as most long-term investors are encouraged to do, could be bad for your wealth.
For one, individuals who practice mindfulness meditation are more likely to spend more now rather than save for later, according to new research on the subject. In fact, they allocate 20% more to near term consumption relative to a control group
And two, they are more disposed to selling their winning stocks, and that by doing so they generate about 4% less wealth relative to the study’s control group.
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“We find that individuals who meditate regularly report shorter financial planning horizons and allocate 9-14% less of their liquid wealth to investment assets,” wrote the authors of the paper, Carina Cuculiza, a professor at Marquette University and William Bazley and Kevin Pisciotta, both professors at the University of Kansas.
And that should give folks who have embraced mindfulness (some 65 million have downloaded mindfulness apps — Headspace and Calm) some pause.
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Self-help therapeutics, the authors wrote, “have negative financial consequences.”
Experts, however, are not convinced. They say the study’s conclusions are contrary to their expectations and other research on the topic. And they take issue with the study’s methodology.
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“I’m actually surprised at these results,” said G. Kevin Spellman, a senior lecturer and director of investment management at the University of Wisconsin-Milwaukee. “I’d expect that meditation could reduce anxiety and therefore increase the influence of the logic part of the brain versus the emotion side and result in better investment decisions.”
Indeed, other research on the topic does suggest that meditation can be beneficial to one’s personal finances.
“There is research with evidence that positive emotions lead to success in a variety of life domains and mindfulness is one of many intervention tools – positive psychology, therapy, and counseling fields for more tools – that can aid in managing emotions that otherwise might hinder productive behaviors,” said Sarah Asebedo, an assistant professor at Texas Tech University, editor of the Journal of Financial Therapy, and co-author of two articles on the subject: Three good things or three good financial things? Applying a positive psychology intervention to the personal finance domain and From Functioning to Flourishing: Applying Positive Psychology to …….