piggy bank sinking under water

Financially Motivated Suicide

Part of the mythology of the Great Depression includes stories of people who had lost everything in the 1929 stock market crash committing suicide by leaping out of buildings. It turns out this was more imagery than fact. Yet suicide rates did increase during that time. More recently, I’ve seen reports of suicides linked to financial losses by those who speculated in the volatile world of cryptocurrency.

Historically, financial crises have resulted in people taking their lives after suffering catastrophic financial loss. Suicide is the extreme “solution” to ending the intolerable pain and shame of losing everything, facing the prospect of being unable to provide for themselves and their families, and the deep humiliation of being unable to make good on their promises to repay creditors. Research showing the connection between financial stress and suicide is discussed in a September 8, 2020, article in Medical News Today by Professor Eric Elbogen from Duke University.

It’s also important to understand that there doesn’t have to be widespread economic catastrophe for a person to have a personal financial crisis. Even during an economic collapse, not all people are negatively affected. Even when the larger economy is thriving, people can lose jobs, have businesses fail, or lose their life savings to speculative investments or scams. Any of these could result in someone taking their life. 

Regardless of the specific cause of someone’s personal financial crisis, the common denominator that I see for the severity of that crisis seems to include one or both of two factors. One is being heavily in debt, and the other is being all in on a “can’t miss, guaranteed” investment opportunity or financial speculation. (Just to be clear, this is my opinion based on experience and observation.)

I think borrowing is probably the number one factor in a financial suicide. I remember my dad saying, “It’s a lot harder to lose everything when you don’t owe anyone anything.” There is a big difference in the stress level between losing 10% of your net worth in a speculative investment and losing more than $100% of your net worth because you borrowed heavily to take that risk.

Money difficulty is among the top 15 reasons for suicide. I think this emphasizes the spontaneity and impulsiveness of financial suicide, as opposed to those who may struggle over time with severe depression or other mental health issues. 

Obviously, suicide is a big topic, and I’m not going to pretend that I have the knowledge and training to fully address it. What I can do is offer some suggestions that may be helpful from the perspective of financial stress.

The first one is financial literacy, learning a basic understanding of how money works. 

Second, don’t over-borrow; it is typically the headwater of most financial catastrophes. Certainly, there are many times when borrowing, such as a home mortgage, is sensible and necessary. Overspending with credit cards is a risky form of borrowing. Borrowing for an investment does have its place, but it has to be done with great care, very consciously and with a lot of contemplation and due diligence. I strongly recommend against ever borrowing to purchase liquid investments like stocks, bonds, mutual funds, or commodities. There is wisdom in the old adage, “Don’t speculate with more money than you can afford to lose.”

Third, and perhaps most important, if you still find yourself with a compulsive financial behavior of risk taking and speculating, then the previous two points are meaningless. It doesn’t matter what the logic is behind the advice. If parts of yourself want and need to make these highly risky investments—which they may not view as risky—it’s time to look deeper. Changing the behavior requires understanding that it is not a calculated financial decision, but an unconscious attempt to cope with a deep emotional wounding. Most personal financial crises have their roots in emotional wounding and trauma. It may seem that the problem is a poor financial decision, but that’s just the tip of the iceberg. The underbelly is some type of underlying trauma and unresolved emotional pain. Until this is gently and curiously uncovered and resolved and healed, the speculative behavior is not going to stop. 

When someone considers suicide, it is a clear sign of the depth of the emotional pain they are in. The part of themselves that sees suicide as a solution has the good intention of ending that pain. Even in the worst financial crisis, there are typically ways to recover and go on, but someone who is in deep emotional pain often cannot see or believe those possibilities. Recovery is not a matter of trying to get rid of this “destructive” part of us or make it wrong. It’s about understanding why this part wants such an extreme solution, what it is protecting, and what is behind that deep pain.

There is real gravity in making sound financial decisions. My friend and mentor Dick Wagner’s saying that, “Money skills are 21st century survival skills,” is not usually interpreted as a literal life or death situation. But at times, it certainly could be. Asking for help, such as from a therapist or financial therapist, can be a lifesaving act of courage.

Check out The Financial Therapy Podcast by Rick Kahler concerning this topic.

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