Arjun was at a family wedding when his uncle asked the question.
“So, beta, you’re working now. Are you saving money?”
“Yes, uncle,” Arjun said. “I invest ₹15,000 every month in mutual funds.”
His uncle frowned. “Invest? Why not put it in a fixed deposit? That’s real saving. This mutual fund business is gambling.”
Arjun smiled politely but didn’t argue. He’d learned there was no point.
Later, his cousin Ravi pulled him aside.
“How do you do it?” Ravi asked.
“Do what?”
“Not care what people think. My dad says the same thing—FDs are safe, everything else is risky. So I just keep my money in a savings account. But then I see your portfolio growing and I wonder… am I doing this wrong?”
Arjun thought about it. “It’s not about right or wrong. It’s about identity.”
“Identity?”
“Yeah,” Arjun said. “Your dad sees himself as a saver. You’ve adopted that identity. I see myself as an investor. Different identities create different behaviors.”
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The Identity Trap
David Schwartz writes in The Magic of Thinking Big:
“You are what you think you are. If you think you’re defeated, you are. If you think you’re a success, you will be.”
This applies directly to money.
If you see yourself as a “saver,” you’ll: – Hoard cash in low-interest accounts – Avoid risk at all costs – Measure success by the balance in your savings account – Feel virtuous about “not losing money” (while inflation quietly erodes it)
If you see yourself as an “investor,” you’ll: – Deploy money into assets that grow – Accept calculated risk as part of wealth-building – Measure success by portfolio growth and net worth – Feel confident about compounding returns
Same person. Same income. Different identity. Completely different financial outcome.
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The Saver’s Dilemma
Ravi’s father had been a saver his entire life.
He’d worked for 35 years as a government employee. Every month, he put ₹10,000 into fixed deposits and PPF.
By retirement, he had: – ₹45 lakhs in FDs (earning 6% interest) – ₹18 lakhs in PPF – ₹12 lakhs in savings accounts
Total: ₹75 lakhs
Not bad, right?
But here’s the problem:
If he’d invested even 50% of that in equity mutual funds over 35 years (₹5,000/month in equity, ₹5,000 in debt), the equity portion alone would’ve grown to ₹2.8 crores (at 12% CAGR).
Total with mixed portfolio: ₹3.4 crores (vs ₹75 lakhs)
The “safe” saver’s identity had cost him ₹2.65 crores.
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How Identity Shapes Behavior
Schwartz observed:
“We act in accordance with how we see ourselves. Change the self-image, and the actions follow automatically.”
Let’s see how identity plays out in real decisions:
**Scenario 1: Market Correction**
The Sensex drops 15% in three months.
The Saver’s Response: “See? I told you the market is risky. Thank God my money is safe in FDs. I’m pulling out whatever I had in mutual funds before I lose more.”
The Investor’s Response: “Market’s down 15%? Good. My SIP is buying units cheaper now. When it rebounds, I’ll make even more.”
Same event. Opposite reactions. Because identity determines interpretation.
**Scenario 2: Unexpected ₹50,000 Windfall**
You get a performance bonus of ₹50,000.
The Saver’s Response: Deposits it in savings account. “I’ll keep it safe for emergencies.”
The Investor’s Response: Puts ₹40,000 in mutual funds (lump sum), keeps ₹10,000 as buffer. “This is a chance to accelerate my wealth-building.”
**Scenario 3: Friend Talks About Stock Market Gains**
Your friend made ₹80,000 in the stock market last year.
The Saver’s Response: “He got lucky. Most people lose money in stocks. I’m not taking that risk.”
The Investor’s Response: “Interesting. What was his strategy? Maybe I should learn more about direct equity alongside my mutual funds.”
See the pattern?
Savers see risk. Investors see opportunity. Savers protect. Investors grow. Savers fear loss. Investors manage risk.
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Arjun’s Identity Shift
Arjun wasn’t always an investor.
Three years ago, he was a saver just like Ravi.
He kept ₹2.5 lakhs in a savings account earning 3.5% interest. He felt responsible. Disciplined. Safe.
Then he read The Magic of Thinking Big and came across this line:
“What you think of yourself is reflected in your actions. Think of yourself as a success, and you’ll act like one.”
Arjun realized: I think of myself as someone who avoids risk. But is that who I want to be?
He asked himself a different question:
Who am I financially? What’s my money identity?
The honest answer: “I’m someone who’s scared of losing money.”
That identity had kept him safe. But it had also kept him stuck.
So he decided to try on a new identity—not fake it, but experiment with it.
“I’m someone who builds wealth through smart investing.”
It felt uncomfortable at first. Like wearing a jacket that didn’t quite fit.
But he committed to acting as if that identity were true.
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The 90-Day Identity Experiment
Arjun gave himself 90 days to live as an “investor” instead of a “saver.”
Here’s what changed:
**Week 1: Started a SIP**
Old identity: “I’ll invest when I have more saved up.” New identity: “Investors invest now and let compounding do the work.”
Action: Started ₹5,000/month SIP in a flexi-cap fund.
**Week 4: Read Instead of Avoided**
Old identity: “Finance is complicated. I’ll never understand it.” New identity: “Investors educate themselves continuously.”
Action: Read one article per week about mutual funds, CAGR, asset allocation.
**Week 8: Stopped Checking Daily**
Old identity: “I need to monitor my money closely.” New identity: “Investors trust the process and play the long game.”
Action: Stopped obsessing over daily NAV changes. Checked portfolio once a month.
**Week 12: Increased SIP**
Old identity: “₹5,000 is all I can afford.” New identity: “Investors find ways to invest more as they grow.”
Action: Cut ₹2,000 in unnecessary expenses. Stepped up SIP to ₹7,000/month.
By Day 90, the new identity had started to feel… real.
He wasn’t pretending anymore. He was an investor.
—
The Three Identity Levels
Schwartz describes three levels of self-perception:
**Level 1: Victim Identity**
“Money is hard for people like me. I’ll never be wealthy.”
Behaviors: – Blames external factors (economy, salary, bad luck) – Avoids responsibility (“It’s not my fault”) – Takes no action (stays stuck)
**Level 2: Saver Identity**
“I’m responsible. I save what I can and avoid risk.”
Behaviors: – Protects capital obsessively – Chooses safety over growth – Ends up with modest savings but limited wealth
**Level 3: Investor Identity**
“I build wealth by deploying money into assets that compound over time.”
Behaviors: – Embraces calculated risk – Focuses on net worth, not just savings balance – Actively grows wealth through disciplined investing
Most people are stuck at Level 2. They’ve graduated from victimhood but haven’t embraced wealth-building.
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How to Shift Your Money Identity
If you identify as a “saver” but want to become an “investor,” here’s the process:
**Step 1: Name Your Current Identity**
Write it down. Be honest.
Examples: – “I’m someone who avoids financial risk.” – “I’m bad with money.” – “I’m someone who lives paycheck to paycheck.”
Once it’s visible, you can change it.
**Step 2: Choose Your New Identity**
Not what you wish you were. What you’re committed to becoming.
Examples: – “I’m someone who builds wealth through disciplined investing.” – “I’m learning to make my money work for me.” – “I’m becoming financially free.”
**Step 3: Act As If**
You don’t need to believe it yet. Just act like someone with that identity would act.
What would an investor do? – Start a SIP (even ₹1,000/month) – Read about mutual funds – Track net worth, not just savings balance
Do those things. The belief will follow.
**Step 4: Collect Evidence**
Every action that aligns with your new identity is proof.
– Started a SIP? “I’m an investor.” – Portfolio grew ₹5,000 this month? “I’m building wealth.” – Didn’t panic-sell during a correction? “I’m disciplined.”
The evidence builds the identity. The identity reinforces the behavior.
**Step 5: Reject the Old Identity**
When the old voice shows up—”You’re not an investor, you’re just pretending”—you have evidence to fight back.
“I have a ₹1.2 lakh portfolio. I invest ₹10,000 every month. I track my net worth. That’s not pretending. That’s being an investor.”
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Ravi’s Transformation
After that wedding conversation, Ravi started questioning his identity.
Am I really a saver? Or did I just adopt my dad’s identity without thinking?
He decided to run his own experiment.
Month 1: Started a ₹3,000/month SIP. Felt terrifying. But he did it.
Month 3: Portfolio: ₹9,400 (₹9,000 invested + ₹400 gains). Thought: I’m actually doing this.
Month 6: Increased SIP to ₹5,000/month. Felt natural.
Month 12: Portfolio: ₹67,000. Started advising a colleague on how to start investing.
Month 18: Portfolio: ₹1.1 lakhs. Realized he hadn’t thought of himself as a “saver” in months.
The identity had shifted. Not because he’d convinced himself with affirmations, but because he’d collected evidence through action.
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The Identity That Built Wealth
Two years later, Ravi ran into his uncle at another family function.
“Still doing that mutual fund gamble?” his uncle asked, half-joking.
Ravi smiled. “My ‘gamble’ is worth ₹2.8 lakhs now. Up ₹56,000 in gains. How’s your FD doing?”
His uncle paused. “FDs are safe.”
“They are,” Ravi agreed. “But I’m not trying to stay safe. I’m trying to build wealth. Different goals, different strategies.”
He said it without defensiveness. Without needing to convince anyone.
Because his identity wasn’t up for debate anymore.
He wasn’t a saver pretending to be an investor.
He was an investor. The portfolio proved it.
—
The Question That Changes Everything
Schwartz’s insight was simple but profound:
“You are what you think you are.”
So here’s the question:
Who are you, financially?
Are you someone who saves and hopes it’s enough? Or are you someone who invests and builds wealth?
Are you someone who avoids risk? Or someone who manages risk intelligently?
Are you someone waiting for permission? Or someone who takes ownership?
Your answer determines your financial future.
Not your salary. Not your background. Not your luck.
Your identity.
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Next in the series: The ₹10 Lakh Mistake: How Your Friends Are Quietly Sabotaging Your Wealth
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Disclaimer: This article is for educational purposes only. Mutual fund investments are subject to market risks. Please read all scheme-related documents carefully before investing. The author is a SEBI-registered Mutual Fund Distributor (ARN 351164). Past performance is not indicative of future returns.