Unemployment on the rise. Small businesses closing left and right. Very minimal traveling. You’d be safe to assume that the stock market would follow suit. It makes sense – at least to my simple mind – that the value of stocks are driven by supply and demand.
You might be suffering from FOMO if you’re not in the market right now. The fear of missing out is real and many are experiencing it in today’s market. Even with the many surges in the market, one must remember how those stock surges occur.
Simply put, the lack of supply (consumers) means the demand (for consuming) drops and vice versa. Apparently the stock market of 2020 didn’t get the memo. Seems as if the normal factors that give stocks’ their value bear no connection to reality.
Even with the disconnect between stock prices and reality in the market, that isn’t stopping investors from jumping in to make a quick buck. Got me thinking that I’m missing out on an opportunity once again.
There was value to be gained from FOMO, I just had to allow myself to receive it.
I can’t help but remember a time in 2008 when the investing world turned upside down and I had absolutely no clue what was going on.
Can’t Fear What You Don’t Know
The year is 2008, my first year making really good money from my job. Money that could have catapulted my net worth into the stars had I known what I know now. Invest for the long term consistently and reap the benefits of compound growth.
The hard part was no one taught me the financial know-how back in the day so who could I turn to?
Luckily for me, I had a buddy give me a breakdown of what I should do. He basically told me to “buy Apple stocks right now, they’re super cheap and thank me later”. Sounded pretty simple in theory.
He didn’t mean for me to explicitly purchase shares of Apple. He implied that I jump into the market now before it’s too late. Hearing his excitement, I wanted to throw my money in the fire.
Then I thought about it more clearly:
- Where do I go if I want to invest my money?
- Don’t I need to be rich to invest?
- What is a stock?
- Does Apple give these stocks out to anybody?
- What is considered “cheap”?
- What is considered “super cheap”?
- How the heck do I invest?
So many questions filled my head that I ended up doing the one thing everyone should avoid like the plague. I was suffering from severe analysis paralysis.
With so many questions and not enough answers, I remained inactive while my buddy made a killing investing in the market. I’m not sure if he changed his investing style or played it more risky but he definitely leveraged the economic reality of that time.
It wasn’t obvious to me what my first step to investing should be so rather than attempting to learn, I decided to just sit back, do nothing, and listen to his stories of how successful his investments were doing.
Then FOMO crept into my life. The fear of missing out played on my mind for months after he initially gave me the golden advice of “just buy Apple stocks now!” Not sure why it did exactly. It wasn’t like I was actively pursuing to increase my net worth or build an emergency fund.
My mind was fixed on consuming. Finally had a good paying job and I felt I deserved to splurge on myself and my girlfriend (turned Mrs Simple FI) to enjoy the finer things in life.
But it pained me to think had I paid a little more attention to preserving my money rather than misusing it, I’d be in a much better financial position for years to come.
FOMO Did Bring Value To My Life
Fortunately for me, I put the feeling of FOMO behind me while citing what lessons were learned during this financial stagnation.
- It Could Have Been Much Worse
- Hindsight Is Always Twenty-Twenty
- Accept My Mistake And Move Forward
- Everything Happens For A Reason
- Regrets Are Wasteful
- Financial Literacy Is Valuable
- Curiosity Breeds Discovery
It Could Have Been Much Worse
With my luck, it would have been. For some strange reason, blindly pouring my money into an investment usually turns into a very bad decision really quickly. This probably goes for many other unlucky people as well.
There are a lucky few that reap the benefits of being, well, lucky. And while investing involves some luck, an entire investing strategy shouldn’t be based off of it. Imagine holding seminars for newbie investors explaining to them the cardinal rule of investing is just sheer luck.
That wouldn’t go over so well and neither should it be used as a viable strategy. I’m finally able to look back on my “missed opportunity” and realize it could have turned out very bad for me.
I’m the type of person that – when I’m highly interested in something – I give it my 100%. Had I known the basics of investing online back in 2008, the majority of my income would have been applied towards it. Not a bad idea looking back on it now but no one with a clear certainty could have proved that to me then.
“Forgive yourself for not having the foresight to know what seems so obvious in hindsight”
– Judy Belmont
Hindsight Is Always Twenty-Twenty
Always. “Shoulda, coulda, woulda” is the motto that comes to mind. Had I known that period was geared towards record breaking stock prices in the years to come, it would have been a no-brainer to invest.
But I didn’t know it then. The best part about it is – I know about it now. Now I can learn from what I didn’t do and design an investing plan for the future. A plan that will prepare me for that same exact instance should it ever happen again.
This doesn’t make me perfect or improve my foresight to twenty-twenty. This helps me make better decisions, better financial choices, and remove the FOMO effects I felt back then while moving forward.
Accept My Mistake And Move Forward
It was a misunderstanding on my part. The concept of building wealth wasn’t on my mind. Even though my friend and many other people I knew were succeeding financially in life, I wasn’t trying to.
My goal wasn’t to build a better future, it was to consume. While that feeling brought me joy, I quickly understood that wasn’t how I wanted to continue living my life. Once we started a family, it became unmistakably clear I couldn’t make the same mistake twice.
Putting them first meant something needed to change. My way of thinking about money – the way I viewed it – forced me to upgrade. The misconception of wealth preservation transformed me into the person I am today.
“Mistakes are always forgivable, if one has the courage to admit them ”
– Bruce Lee
Everything Happens For A Reason
No matter how big or insignificant an event is, it happened because it needed to. As every event occurred in my life, many of them were bound to take place with or without my consent. The moment is always right to take action on something, but knowing what action to take is the tough part.
I had a choice to draw lessons I want to learn from or remain idle dreaming about what could have been. The former puts the power in my court while the latter gives it away. I walked away from that time with more power to take action than ever before.
Honestly, I’d rather have the wake up call in my early twenties, like it did, vice later in life. While it wasn’t evident at the time, I began marching down a journey to become financially independent all because of that experience. There is much to be thankful for.
Regrets Are Wasteful
If missing an opportunity wasn’t painful enough, living with regret only made it exponentially worse. There was no value in regretting what I didn’t do. In fact, I became financially foolish in my thoughts and my actions.
Thoughts of spending more of my hard earned money crept into my mind. I gave myself the “pass” to splurge. My closet filled more and more with name brand clothing which I assumed would bring me ultimate happiness.
“Too many people are buying things they can’t afford, with money that they don’t have, to impress people that they don’t like!”
– Will Smith
In fact, I felt the complete opposite. Those items weren’t really for me. Like Will Smith said, they were to impress people I didn’t care for. The feeling was mutual surely. But now I had a closet full of stuff with the feeling of regret for ever buying them.
It was an endless cycle I had to abandon if I wanted any chance of financial survival. Luckily I did and now live with none at all. Regretting what happened pushed me to build my financial acumen.
Financial Literacy Is Valuable
To go from knowing nothing about saving, investing, or FI, I basically became a sponge. Absorbing as much financial material as I could, I found myself with definite purpose.
The fact is I’m an extremely slow learner. It takes time for me to become educated enough to take action on an idea. While some may look at it as a downfall, I know I sure did, taking my time to think through a plan played a huge role in how I arrived today.
I thought that I needed to know everything about a certain topic before pursuing it. But it isn’t true. I just needed to know enough to be dangerous. Not dangerous as in risky but more like confidence to stop over thinking and take continuous action towards financial independence.
Curiosity Breeds Discovery
I can honestly say being curious lead me down this path toward financial freedom. Discovering FI forced me to read more, learn more, and do more than I ever did before with my money. Suddenly, I was interested in anything involving building wealth.
As an adult, it remains a high priority for me to continue discovering more about. Going through 2008 revealed I had much to learn about my relationship with money. That spark has fueled me ever since.
While I don’t care to get too into the weeds or over complicate financial material, I am farther along compared to my younger self. I take personal finance seriously but will only dive into certain topics that I can really benefit from. All of this because of being curious.
Conclusion
Weathering the FOMO storm gave me some valuable mantras to apply in my daily life. Some people will look at that moment and only remember what they didn’t do. I choose to build myself positively (and hopefully profitably) by recognizing what I didn’t do and doing something about it. Maybe I don’t reap any financial benefits in the future. I know for sure that I’ll be a better person regardless.
What was the greatest lesson you learned from FOMO? What do you do in the moment of FOMO? How does missing an opportunity move you to take action?