What are you missing out on?
Probably not as much as you think.
But in our hyper-connected world with its 24/7 news cycle, the Fear of Missing Out (FOMO) has made many people focus more on what they’re not doing than on what they are doing. That can lead to bad decisions and missed opportunities to improve Return on Life.
The phrase “return on life” (ROL) refers to the total financial worth that an individual derives from their lifetime investments and expenditures. It computes the net value of the return an individual receives in terms of financial stability, happiness, and personal fulfilment after accounting for all of their income, assets, expenses, taxes, and other financial commitments.
The ROL is determined by deducting all lifetime costs from all lifetime income, including all income sources such as wages, investments, inheritance, and Social Security payments. Taxes, inflation, and other elements that can affect a person’s financial security are considered in the calculation.
Fear of Missing Out (FOMO) is a well-known phenomenon in today’s fast-paced world. People experience a feeling when they believe others are enjoying life experiences or financial opportunities they are missing out on. This feeling can significantly impact financial decisions, leading people to make impulsive and often unwise choices.
Here is how FOMO can distort your perspective on what's important:
Losing perspective on your portfolio.
Most investors who build wealth through the markets do so by making consistent contributions to a balanced, diversified financial plan. That might not sound as exciting as jumping on the latest social media investment craze. But over time, this tried-and-true strategy is a lot more reliable than trying to take shortcuts.
For example, the “meme stock” craze boosted shares of GameStop and AMC in 2021. But those companies came crashing back down to earth in 2022. And while all securities experience ups and downs, many folks suffering from FOMO “bought high” right before the meme stock bubble burst or overinvested in these trendy stocks instead of diversifying into traditional brokerage or retirement accounts.
Will some of these FOMO investments rebound and turn profits over time? Maybe. But if you treat investing like a slot machine, you may “miss out” on the ability to build a strong foundation for long-term financial growth.
Losing perspective on your time.
According to Statista, in 2022, the average person spent 147 minutes per day on social media. Some of that time educates us about what’s happening in the world, connects us with friends and family, and brings an extra smile to our coffee breaks.
But a big chunk of those 147 minutes is spent seeing other people do things that we’re not doing. Not surprisingly, more and more scientific studies are finding a link between high social media use and FOMO. And when we’re looking at exquisite snapshots of meals we can’t afford or tropical vacations we can’t find time for, that can lead to feelings of low self-worth and even depression.
Rather than worry about what everyone else is doing, it might be worth reexamining your daily schedule to ensure you spend time on the things most important to you. If you’ve always hated running, training for a half-marathon just because your friends are will only make you — and them — miserable. Instead, consider unplugging at the beginning or end of every day to do something you love, whether half an hour of yoga or reading an extra bedtime story to your children. Using your time your way will be much more fulfilling than eating food you don’t really like, planning for a trip you don’t really feel like taking or buying a boat you’ll never drive enough.
Losing perspective on Return on Life.
As we age, FOMO can take on some complicated new dimensions. Seeing colleagues promoted ahead of you might make you worry that you’ve peaked in your career. Market fluctuations and global economic challenges might make you worry about your retirement security. Packing your kids off to college might make you worry about missing out on their lives.
Acknowledging, planning for, and celebrating all the important moments in your life is an essential part of our Life-Centered Planning Process. Looking back on the $Lifeline milestones you’ve crossed should fill you with pride and gratitude. Hopefully, those feelings can help you stay focused on the personal goals you’ve plotted for the future and the financial plan we’re working on that will help you achieve them.
To mitigate the negative effects of FOMO on financial decision-making, it’s important for individuals to understand the power of this emotion and take steps to manage it.
Here are some tips for avoiding FOMO in finance:
Educate yourself:
Research the market and the investment you’re considering before making any investing decisions. This will enable you to make thoughtful choices instead of rushing into things out of fear of missing out.
Keep your eyes on your objectives:
It’s simple to lose sight of your long-term financial objectives while the market is exciting. You can prevent making judgements based on a fear of missing out by focusing on your objectives and making investments that align with them.
Avoid the hype:
It’s important to avoid the hype surrounding certain investments or the market. Instead, focus on the fundamentals and do your own research to determine if an investment is right for you.
Be patient: Investing can be a long-term game, and it’s important to be patient and give your investments time to grow. Don’t make hasty decisions based on fear of missing out or the current market conditions.
Seek advice:
If you’re feeling overwhelmed or unsure about an investment decision, seek advice from a trusted financial advisor. They can provide valuable insight and help you make informed decisions.
In conclusion, FOMO can significantly impact financial decision-making, leading to hasty investments, panic selling, and increased debt.
Financial Solutions Inc. can assist you in planning your wealth to complement your objectives and risk tolerance.
We offer comprehensive financial planning that considers every aspect of your financial situation. To achieve your aspirations, goals, and desires for your life, we can assist in developing a personalised roadmap and offer advice on how to make the most of the resources you already have.
We provide a full range of accounting, bookkeeping, consulting, outsourcing, payroll and business services to Shopify business owners, either online or at our location. With us, you get qualified accounting professionals who ensure that your financial records are maintained correctly and accurately.