The ‘Aughost’ Month

During August, some people postpone business launches while others delay property purchases, investments or major financial commitments. The reason is often linked to a belief that August coincides with the Chinese “Ghost Month,” a period during which spirits are believed to roam the earth and when major undertakings should be approached with caution.

According to tradition, the gates of the underworld are opened during this period, allowing spirits to visit the world of the living. As a result, some people avoid major decisions such as starting a business, buying a house, getting married, signing contracts or making large investments. Others become more conservative with money, preferring to wait until the month has passed before proceeding with important plans.

For many, these practices are expressions of cultural heritage and respect for family traditions. And I will be the first to say that there is nothing wrong with honoring customs that connect us to our roots. The challenge arises when superstition prevents us from making sound financial decisions that could improve our long-term well-being.

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Consider a business owner who has spent months preparing a promising expansion. Market conditions are now favorable, financing is available and customer demand is strong. But if the project is delayed simply to avoid the Ghost Month, the opportunity may be missed especially if competitors move first, costs increase or conditions change altogether.

The same can be said of investments. Studies have shown that outperformance is delivered 92 percent of the time by allocation, 5 percent by stock selection, 2 percent by timing the market and one percent by sheer luck. This does not mean that caution is unnecessary. In fact, one positive lesson we can draw from the Ghost Month is the importance of thoughtful decision-making. Before making a major purchase or investment, it is wise to conduct due diligence, evaluate risks and seek professional advice.

Beyond the Ghost Month, Filipinos observe many other money-related superstitions. Some believe certain dates are luckier than others for opening a business. Many favor the number eight because it symbolizes prosperity. Some carry lucky coins in their wallets or place prosperity symbols in their homes and workplaces.

Actually, these practices can reinforce good financial habits. A lucky coin may remind someone to save. A prosperity symbol may encourage focus on financial goals. A favorable date may provide confidence and motivation when launching a new venture.

Behavioral economists have long observed that people seek patterns and rituals whenever uncertainty is high. Money is one of the most uncertain aspects of life. Markets rise and fall and businesses succeed and fail.

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Understandably, superstitions serve as a way of creating a sense of control over events that are inherently uncertain. They help people cope with risk and unpredictability. The key, however, is to distinguish between traditions that encourage positive behavior and beliefs that discourage progress.

If observing the Ghost Month encourages you to slow down and review a major financial decision more carefully, then good. If it prompts you to examine a contract more closely or reassess investment risks, it may actually improve the quality of your decisions. But if it causes you to postpone building your retirement fund, delay purchasing needed insurance protection, ignore a worthwhile business opportunity or avoid investing altogether, then the cost of that superstition may be far greater than any perceived benefit.

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As we move through August, perhaps the most productive financial ritual we can adopt is one rooted in both cultural respect and practical wisdom. Reviewing your budget, reducing high-interest debt, protecting your family through adequate insurance and investing regularly toward long-term goals are prudent actions. They may not be accompanied by lucky numbers, special dates or prosperity charms. But they possess something even more powerful, a proven track record.

Financial freedom is rarely the result of luck alone. More often, it is the result of consistent habits practiced over many years. So, as the Ghost Month unfolds, respect the traditions that have been handed down through generations. Appreciate the cultural values they represent. But do not allow fear of bad luck to prevent you from taking steps that can improve your financial future.

After all, the most powerful protection against financial misfortune is not a charm, a number or a date on the calendar. It is financial preparedness. INQ

Send questions via “Ask a Friend, Ask Efren” free service at personalfinance.ph, SMS, Viber, Twitter, LinkedIn, WhatsApp, Instagram, and Facebook. Efren Ll. Cruz is a Registered Financial Planner and Director of RFP® Philippines, seasoned investment adviser, bestselling author of personal finance books in the Philippines and a YAMAN Coach