Feb 08, 2024

Our insights

Most people accept that investing and saving for retirement is necessary to grow their wealth to a point where they can live and enjoy their sunset years with a level of comfort.

But how they go about that task is heavily influenced by a range of factors around them.

Many of these factors can be attributed to social influence.

Family, friends, work colleagues and other external elements all play their roles in the decisions we ultimately make about investing and saving for retirement.

Here is a closer look at the factors which shape those decisions.

Social norms

People like to conform to societal norms when it comes to investing and saving for retirement.

If there is a perception that a particular investment strategy and a certain level of savings is socially acceptable, they are more likely to be comfortable with their choices and position.

If they fall outside of those social norms, they are more likely to make adjustments.

The social norms they observe may be dictated by just their inner circle of friends or a much wider group of people.

Social comparisons

People often engage in social comparisons with their family, friends and colleagues.

These social comparisons may include the type of house they live in, their political views, their occupations, how much money they earn and inevitably, their financial behaviours.

The investment choices of your peers can’t help but have an influence on you.

People tend to boast about their successes, be it shares, an investment fund or property and those around them will often follow suit. 

Peer pressure

Sometimes, that external noise or commentary can morph from boasting about one’s own successes to criticising another’s investment strategies or lack thereof.

If a person feels they are missing out on an opportunity that a trusted friend or group of friends have invested in, they are more likely to follow suit.

It is human nature to want to feel a part of team success and this mentality extends to investing.

Family and social support networks

Successful and wealthy families like to keep money within their bloodlines and pass on the wisdom of prudent investment strategies through their generations.

But having successful friends can also help people make positive financial decisions.

They may offer guidance, encouragement and practical advice regarding investing and saving for retirement, leading to more informed and responsible financial choices.

Cultural influences 

Australia is a country of many different nationalities and cultures.

Culture plays a significant role in shaping attitudes towards saving and investing, depending on how highly it prioritises them.

For example, India has historically been known as a ‘nation of savers’ although that trend is slowly moving toward investing.

Equally, different cultures tend to favour or prefer different types of investments.

Media and social media influences

Mainstream media bombards us daily via television, radio and print.

Much of its information is delivered in the guise of news.

A good part of it is obviously recognised as advertising.

While some of it will fall somewhere in between, a type of ‘infotainment’ appearing to be informative but more likely paid-up content designed to influence your decisions.

A great deal of that content will deal with investing or making other significant financial decisions or purchases.

Social media plays the same game but is awash with opinion, often presented as fact.

Financial education 

Growing your financial education is one of the savviest ways of positively influencing your investing and saving for retirement strategies.

You might immerse yourself in books, journals, magazines and trusted online content or tap into the insight of successful friends and colleagues.

By better understanding the mechanics of the economy, you are better equipped to make more solid savings and investment choices.

Get advice today

Social influences are all around us.

They weigh heavily on every choice we make.

But when it comes to investing and saving for retirement, there is a lot at stake.

Just as sound financial decisions tend to be rewarded exponentially over time, so too are poor ones punished.

It’s never easy to cut through all the white noise and sort the good advice from the bad.

That’s where Calder Wealth Management can help.

CWM are financial experts who can make sure your strategies regarding investing and saving for retirement are based on sound logic.

If you haven’t yet begun saving for retirement, we’ll create a well-balanced investment plan that aligns with your financial goals, time horizons and risk tolerance level.

It is the easiest and most stress-free way to establish, monitor and protect your investment portfolio.

Whatever your financial goals, we’ll work with you to devise and implement sound investment strategies.

No-one should do without quality financial advice from a team personally invested in their wealth accumulation.

At CWM, we pride ourselves on leading our clients into the future with structure, financial stability and confidence. 

Contact us today to discuss all of your financial needs and concerns.

Written by Ben Calder

The information contained in this article is general in nature and does not take into account your personal situation. You should consider whether the information is appropriate to your needs, and where appropriate, seek professional advice from a financial adviser.

Taxation, legal and other matters referred to on this website are of a general nature only and are based on Calder Wealth Management’s interpretation of laws existing at the time and should not be relied upon in place of appropriate professional advice. Those laws may change from time to time.

Calder specialises in wealth management with a focus on advice, investment, sustainability, insurance and finance.