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When a child in an Indian family receives their first salary, advice begins arriving almost immediately.
“Buy gold. It never loses value.”
“Purchase a house as early as possible. Rent is wasted money.”
“Don’t put too much money in the stock market. It’s risky.”
“Take an insurance policy. At least your money is safe.”
Over the years, these conversations become more than advice.
They become beliefs.
Most of us don’t remember when we first heard them. We simply grow up believing them.
By the time we begin earning, these stories have quietly become the foundation of our financial decisions.
The interesting part is that these stories are rarely created with bad intentions.
They are born from someone’s experience.
A parent who lived through financial hardship values security.
A grandparent who saw gold protect the family’s wealth trusts it deeply.
Someone who lost money in the markets warns the next generation to stay away.
Every generation passes on its experiences as financial wisdom.
And that is where psychology enters the picture.
Psychologists describe this as Narrative Bias.
Human beings naturally understand the world through stories rather than statistics.
A story gives context.
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It creates emotion.
Most importantly, it makes uncertainty feel manageable.
Our brains are wired to remember a neighbour who lost money in the stock market far more easily than a twenty-year study on long-term investing.
We remember our uncle proudly saying, “This insurance policy helped me when I needed it,” long before we understand what the policy actually offered.
Stories stay with us because they are personal.
Numbers are forgotten because they are abstract.
This tendency is not a flaw.
It is how the human brain has evolved.
Stories helped our ancestors learn, remember and survive long before books, data and research existed.
The problem begins when a story becomes a substitute for evidence.
Behavioural finance reminds us that every financial product has a purpose—but no financial product is universally right.
A fixed deposit is not always the safest choice.
Gold is not always the best investment.
Insurance is not always meant to create wealth.
Mutual funds are not always risky.
Stocks are not always speculative.
The right decision depends on your financial goals, your time horizon, your risk tolerance and your overall financial plan.
Yet our minds often choose familiarity over suitability.
Not because we lack intelligence.
But because a familiar story feels more trustworthy than an unfamiliar fact.
Perhaps the most important financial question we can ask ourselves is not,
“Which product should I buy?”
It is,
“Is this decision based on careful evaluation… or on a story I have believed for years without ever questioning it?”
Because every financial journey begins with a story.
Wise investing begins when we learn to distinguish the story from the evidence.
Sakshi Deshmukh
Psychologist
