The Psychological Trap Keeping You From Financial Freedom

Most people are stuck because they fear failure and losing what they already have. This fear of loss keeps them from taking risks and pursuing their dreams.

We’re hardwired to cling to security, even if it means staying in situations that no longer serve us. Psychologists call it “loss aversion,” the idea that losing something feels twice as painful as gaining something of equal value feels rewarding. While this instinct might have helped our ancestors survive, it’s not doing us any favours when trying to build a life of time and financial freedom.

I’ve seen this play out repeatedly — whether I struggled to step away from a stable military career or the hesitations of clients too afraid to invest their savings or pivot their careers. Loss aversion keeps us in our comfort zones, safe but stuck.

And let’s be honest — it’s not just fear of losing money — it’s the status, the routine, and the sense of control that comes with it. The irony is that clinging to the familiar often stops us from creating something far greater: a life where our time is truly our own and financial decisions aren’t ruled by stress.

That’s why I want to discuss this today. Recognising the grip of loss aversion is the first step to breaking free from it.