How labeling may affect your financial decisions:

The Rosenhan experiment, a renowned 1973 study conducted by David Rosenhan, a psychologist at Stanford University, is a seminal example of the labeling phenomenon. A total of eight participants without a documented psychiatric history simulated auditory hallucinations to secure admission to different mental hospitals. Despite the provision of truthful information regarding their lives and the assertion that auditory hallucinations were not true, all participants were diagnosed with severe mental disorders. This phenomenon can be described as “labeling.” The participant’s structural placement in the mental health hospitals led to the subsequent labeling of them as mentally unwell.

Society has a tendency to assign labels to individuals often influenced by preconceived notions and past experiences. This tendency can be seen as a form of “labeling” that targets humans based on their neurological subconscious perceptions , rather than on other factors such as their real behavior, environment reality, or real and actual experience.

This labeling is applicable to the majority of financial decisions made by companies. In accordance with the conclusions of the Rosenhan theory, there is an inherent risk of making financial decisions based on prejudice, incomplete or past information, and the allostatic load without conducting adequate verification or validation through one’s own methods, expertise and reality. It is then imperative to exercise caution when making financial decisions, ensuring that one’s past experiences, or emotional conditioning are not taken into account in the decision making process.

In the current age, characterized by an abundance of information, stress, instant processing, and the pervasive influence of artificial intelligence, it is necessary to acknowledge a fundamental truth: the need to comprehend the neurological boundaries of the human brain. The phenomenon of the transition from subconscious to conscious reality: integration, awareness,  realization.

Money without brains is always dangerous “- Napoleon Hill, 1937 –

By Professor López