If Everyone Is Doing It, It Must Be Right… Right?
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Think about the last Indian wedding you attended.
Someone bought a bigger diamond.
Another family booked a grander venue.
Someone upgraded their car just before the wedding.
Within weeks, conversations begin.
“Maybe we should also…”
Not because we needed to.
Not because we had planned to.
But because everyone else seemed to be doing it.
Money decisions are rarely made in isolation.
They are deeply influenced by the people around us.
The same thing happens with investing.
A colleague starts a SIP.
A neighbour buys a second house.
A friend proudly talks about the returns from a new investment.
A relative insists that a particular insurance plan is “the best.”
Slowly, without realizing it, their confidence begins to influence our decisions.
Not because we have studied the product.
But because so many people seem convinced.
Psychologists call this Social Proof.
When we are uncertain, we naturally look to others for guidance.
If enough people believe something, our brain quietly assumes it must be true.
This tendency has helped humans survive for thousands of years.
Following the group often meant staying safe.
But financial decisions are different.
What is right for someone else may not be right for you.
Your colleague’s income is different.
Your neighbour’s responsibilities are different.
Your friend’s financial goals are different.
Yet our brain often overlooks these differences.
Instead, it tells us a comforting story:
“If so many people are doing it, it can’t be wrong.”
This is known as Herd Mentality.
Picture Source:https://in.pinterest.com/pin/111604896990105122/
It doesn’t begin with confidence.
It begins with uncertainty.
When we don’t know what to do, following the crowd feels easier than thinking independently.
Ironically, the crowd often feels most confident at exactly the wrong time.
Whether it’s buying property because everyone is buying, increasing investments because markets have been rising, or avoiding equity after a market fall because everyone is fearful—the crowd can amplify both optimism and fear.
Behavioural finance does not ask us to ignore others.
It simply reminds us that another person’s financial decision is based on their goals, their risk tolerance, and their circumstances.
Your financial plan deserves the same individuality.
Before making your next financial decision, pause and ask yourself:
“Am I making this decision because it is right for me…
or because it feels uncomfortable to be the only one doing something different?”
Because in finance, just as in life…
The crowd can offer comfort.
But it cannot offer certainty.
