The Effect Money Has On Your Brain

As business owners, entrepreneurs and leaders there is no doubt that money flows in and out of our lives on a daily basis but did you know that talking and thinking about money actually has an effect on your brain.

We know the beliefs and stories we have around money can make some people fearful and bring about negative associations. For others money is empowering, easy and fun in their business.

In this blog post I’m going to take you through how to think about money from the outside in and how money can change our brain. It can even make people do irrational things or make bad decisions that they wouldn’t normally choose in a situation where money was not involved.

So what exactly happens to the entrepreneurial brain when money comes into play?

I recently came across a really great book written a few years ago by the former VP of J.P. Morgan, Kabir Sehgal. In it he wrote about the relationship between neuroscience and money, titled Coined: The Rich Life of Money and How It’s History Has Shaped Us , and he investigated the fMRI (functional magnetic resonance imaging) observations and which areas of the brain get stimulated when we make financial decisions.

Here are just 3 of the most fascinating findings and how it can help you understand what goes on in your brain when you are dealing with money and your business.

1. GOT THAT GUT FEELING?

As an entrepreneur or leader do you ever have a "gut feeling" about something you are about to invest in? That feeling and knowing instinctively in your gut when a decision to invest is either right or wrong, well it has a real physiological basis.

I invite you to play a game with me. Have you ever played the 2 player game "The Ultimatum Game?"

Here’s how to play: Player 1 proposes a deal to split a pot of money.

Player 2 One player decides to either agree to the split proposed and they both get their cut, or she disagrees to the split and neither party gets any money.

If Player 2 believes it’s a good deal, it has been found that the area of complex problem solving, self-awareness and reflection (dorsolateral prefrontal cortex) becomes activated and she decides to split the money. If Player 2 is offered what she believes as an unfair proposal, however, the emotional pathway (anterior insula) of the brain is activated and this area is responsible for feelings such as pain, and anxiety and because the brain likes to feel safe at all times, she declines the offer of the proposed split.

So where do the gut feelings come into this? Well, the anterior insula is partly composed of "spindle cells,"  and these are also found in your digestive tract. The spindle cells in your insula are firing in sync with your churning stomach.

So next time you get a 'gut feeling' that an investment (such as purchasing a programme or hiring a coach) is not a good one, you might not be imagining it.

2. MONEY ACTIVATES THE FIRING OF MORE NEURONS.

When you are negotiating about money or having a sales conversation, a part of the brain (your nucleus accumbens) that is part of the reward pathway is stimulated.

In one study researchers scanned the brains of 12 people as they gambled for money. Everyone in the group experienced "heightened neural activity," especially in the nucleus accumbens. When the researchers compared the gambling players brain scans with those of people who were addicted to and high on cocaine, they found the results were almost identical. 

"Nothing has an effect on people like money”  It gets people excited like nothing else.

"Like food provides motivation for dogs, money provides it for people."

3. RISKY BUSINESS.

Stanford Graduate School of Business looked into why investors make irrational financial decisions and found that in some of the test subjects just the thought of taking a greater risk around money led to naturally elevated stimulation of their nucleus accumbens.

 These people are then more likely to make the decision to purchase a riskier security such as a stock that was a higher risk than a bond that was of lower risk.

So many of us underestimate not only the external effects of money on our brain, but it goes much deeper and is such an ingrained part of who we are, what also goes on in our subconscious and our old money stories that need to be rewritten and the money pathways that need to be rewired in order to achieve the success and money that we want, and the great news is that you can achieve this.

Sarah xox

You've known for some time that a personal transformation is needed for you to grow your business, income and impact.
So, perhaps we should talk?

If you are finding you have a difficult relationship and beliefs around money that are holding you back in your business then I invite you to get in touch for a FREE call with me.

CLICK HERE to message me and let’s begin the conversation to get you on the right track using brain science and mindset techniques to increase your potential, possibilities and profits in your business today.