At the end of the 2017 year towards early December the digital assets known as cryptocurrency blew up. Their value grew from a total of 200 billion in November to over 850 billion by the end of the year. That means in about 2 months you could have turned 100 dollars into 300 which is over 200% growth. For those of you who have a 401K or retirement you are probably used to 8-10% growth each year, but why not 200% in 2 months? Well the reason is because of FOMO.
The fear of missing out is a phenomena that creates stress and depression with millions of people across the world trying to stay up to date with their social media, news, and investments. You goal in life is to do whatever you can to be happy and successful and so you don’t want to miss out on all the opportunities that can help you make it true. However the fear of missing out hurts you a lot more than actually missing out.
In this article we will use cryptocurrency as our example, but you can apply this example to anything such as social media.
The reason why the market blew up was because of this phenomena. People started to see how fast it was growing and wanted to get in on the action assuming that they were early enough to make millions. But when you have 30 million people who have not done their research or do not understand investing suddenly start taking out loans to be able to invest in cryptocurrency, well that is where issues start to occur. Most people don’t realize this but once you invest your money the only thing that happens is you benefit the people that invested before you at a lower price. So for you to make money you need other people to invest after you. But now think about if you were one of the very first people to invest and now an additional 30 million people invested on top of you. You are very well off now because all of that money increases the value of your assets. So you plan on selling the millions you made not realizing that you are taking that money away from the people above you and lowering the price. That is when the bubble occurs.
Let’s take Jerry as an example he spent $1,000 dollars 5 years ago to buy 10 Bitcoin. 5 years later you hear from Jerry that Bitcoin is blowing up so you spend $1,000 dollars to buy 1 Bitcoin because the value of it has increased. So you now have $1,000 dollars worth of Bitcoin but Jerry who waited 5 years and got invested early now how $10,000 dollars of bitcoin, so he is happy with that return and decides to sell it for a profit which in turn lowers your amount to $900 dollars since the value just decreased. Because you had FOMO you helped others gain lots of money while losing lots yourself. This will cause you to go into financial and social depression and other mental issues that constantly derive from FOMO. If you decided to just miss out you could have saved $100 dollars.
Now does this mean you should not invest? No it only means that FOMO is based off of what others are doing and telling you, investing your hard earned money should be based on what you believe in and see value in. If you would have researched Bitcoin and Crypto and Investing and would have believed in the technology then losing $100 dollars wouldn’t hurt since you know long term you will be better off.
When it comes to social media, setting time out of your schedule to catch up with your social life is better then constantly getting reminders and sitting their hoping to see something that everybody else is. If you schedule your social media activity you will get into a habit of learning everything once a day instead of knowing at the second it happens.
Don’t let FOMO take over your life, research, plan, and schedule your life to stay happy.