Fear of Missing Out (FOMO): How Social Media Affects Financial Decisions

How Fear of Missing Out Can Affect Your Decisions

Can the information on your phone make you anxious?

In modern life, our phones are rarely out of reach.

How long can you stop yourself from checking your phone?

Seeing more information from people in your social circle is almost unavoidable, and it can quietly affect your emotions.

Consider two common examples:

• “25 years old, earning five figures a month, driving a luxury car and living in a luxury home”;
• “Finally bought XX” or “Made money from XX again”.

Honestly, do posts like these make you anxious?

Not anxious? Good. You may be doing better than them, or you may simply be content with what you have.

Anxious? You may be experiencing Fear of Missing Out.

What is Fear of Missing Out?

Fear of Missing Out describes the FOMO you feel when you think you may miss a good opportunity or see other people becoming more successful.

It is part of human nature. People have lived in groups since ancient times, so it is easy to compare ourselves with others.

In a world flooded with social media, fear and anxiety can easily lead to blind following and herd behaviour, followed by rash decisions.

Three conditions for making a sound decision

A sound decision requires three things:

• First, understand all your choices;
• Weigh the pros, cons and possible outcomes;
• Make the decision while thinking rationally.

If a decision is made to fit in, avoid missing out or simply follow someone who appears to have made a huge profit, it may not suit you.

Many posts may exaggerate to attract attention, report only the wins and not the losses, or feature someone who does not even know how the profit happened and was simply lucky.

Do not let fear, greed, jealousy or impatience control you

The right mindset and way of thinking matter.

First recognise this natural tendency, then decide rationally. This helps you choose what you value, stand by your choice, avoid being shaken by rumours and avoid readily trusting a stranger's opinion.

Everyone's circumstances are different. How can one answer apply to everyone?