The word “FOMO” stands for “fear of missing out”. This concept refers to people’s fear of being excluded from an event, trend or current popularity. FOMO is a psychological condition in which people find themselves worried about lost opportunities and feeling that they are missing out on something important.
It is a psychological phenomenon where people worry about being left out of an event, trend, or current popularity. Financial advisors may give their clients suggestions on how to protect themselves against FOMO and other emotional responses. For example, financial advisors may recommend:
- Define your financial goals: By defining your financial goals, you can try to understand what you are targeting and why you want to do something. This will make it easier to resist emotional responses like FOMO.
- Consider waiting: Before buying something, consider waiting and think carefully before making a purchase decision. This will make it easier to resist emotional responses like FOMO.
- Evaluate risks: Before buying something, evaluate the potential risks and think carefully before making a purchase decision. This will make it easier to resist emotional responses like FOMO.
- Assess your financial situation: Assess your financial situation and think about whether you can afford the purchase before making a decision. This will make it easier to resist emotional responses like FOMO.
Here are a few examples of situations where FOMO might have come into play:
- The rise of social media: With the proliferation of social media platforms, it has become easier for people to see what their friends and peers are doing at all times. As a result, people may feel pressure to keep up with the latest trends or events, leading to FOMO.
- The housing market: During times of rising housing prices, some people may feel pressure to buy a home before prices get even higher, leading to FOMO.
- Investment opportunities: When a particular investment opportunity is generating a lot of buzz, some people may feel pressure to get in on the action before it’s too late, leading to FOMO.
- Pop culture events: When tickets to a popular concert or sporting event sell out quickly, some people may feel pressure to buy tickets on the secondary market at a higher price, leading to FOMO.