By: Catalyst Wealth Management
January 7, 2022
It is a popular acronym to describe a phenomenon that is particularly prevalent on social media websites because people often love to post pictures of their wonderful experiences. Those reading these posts feel they’re missing out on a better quality of life. FOMO may be harmless because it merely leads to a mild feeling of jealousy. People may feel envious that their friends on social media get to go on marvelous vacations or to the latest pop music concerts.
However, FOMO is not always harmless when it comes to people sharing about how well they are doing in business or investing. This type of FOMO can lead to readers taking many unnecessary business risks or choosing high-risk investment strategies. As a result, they may often lose large sums of money and experience a variety of financial hardships.
Here are some erroneous financial misperceptions triggered by FOMO.
People believe they are falling behind when it comes to improving their financial situation. While all their friends are getting wealthy, they are still struggling to make ends meet. Since they feel they need to take some drastic action to catch up, they make foolish financial decisions. But instead of making money, they lose it.
People become dissatisfied with their current level of wealth even if it’s considerable. Rather than appreciating how far they’ve come in life, they feel inferior to people who are earning more or who have a better return on their investments.
Afraid of always being stuck in the rat race, people make rash decisions about employment, business, or investments. They want to earn the right to brag about how well they are doing financially and living life on their terms.
People spend money on things that they don’t need. They want to show other people how well they’re doing in life. For instance, someone may buy an expensive sports car just to impress others. Unfortunately, the money they spent on the car would have been better used to build a large retirement income.
In sum, financially-based FOMO often causes people to make unsound business or investment decisions. By ridding yourself of erroneous beliefs based on this type of FOMO, you are far more likely to make smart decisions on how to manage and grow your wealth.
You are also more likely to make sure that your children will enjoy financial success when they grow up by investing your money properly. Making sound investments today will ensure that your children will go to good colleges and get excellent jobs tomorrow.