FOMO: The Worst Financial Trait – Fear of Missing Out
JAN 19, 2023 by Morgan Housel@morganhousel
Afunny thing about money is that it’s a negative art. You often have a better chance of accumulating more of it by getting rid of bad traits vs. acquiring good ones. Most ambitious people’s intuition is to ask, “How can I get smarter? More informed? Find new skills?”
In many fields those are the right questions. Money is a rare exception where asking questions like, “How can I be less dumb, less greedy, less impatient?” can be more effective.
And there’s one trait whose removal from your personality can do more to improve your financial situation than anything else: The fear of missing out.
Having no FOMO might be the most important investing skill. Being immune to the siren song of other people’s success – especially when that success is sudden, extreme, and caused by factors outside their control – is so powerful and important that it’s practically impossible to do well over time without it. When strategizing, Dwight Eisenhower used to quote Napoleon, who said a military genius is “the man who can do the average thing when everyone else around him is losing his mind.” Same with money.
FOMO is recklessness masked as ambition. You see someone else getting rich and think, “If they can do it, I can too.” That feels like a good emotion – it feels like you’re learning through observation and following a data-driven path to success.
But what’s actually occurring is you are outsourcing your emotions to people whose quick windfall has probably left them in a fragile emotional state to begin with.