Do you often get the urge to make decisions based on FOMO?
The past year certainly hasn’t been an easy one for people that suffer from FOMO. With markets being as volatile as they are, entrepreneurs and investors across all asset classes want to avoid missing out on the next big thing.
So I thought it would be a good time to share my framework in how I deal with FOMO.
What is FOMO
Fear of missing out.
In a business/investing sense, it’s the feeling we get when we see people making a ton of money in something that we are not already participating in. It might be a stock, a startup, or some other investment or business opportunity that you fear you might miss out on because you’ve seen someone else make money in it. It makes you want to drop whatever you’re doing and chase the shiny object.
We all know that feeling, and it sucks. It is a powerful emotion that leads us to make reckless decisions at times.
I don’t want to get too deep into human psychology here, but just understand that it is a perfectly normal human emotion. It happens to the best of us, including myself. There’s nothing that you can do to prevent having this feeling, but you can learn to manage it.
Events and processes
FOMO is created by an event or a result. A situation in which you compare yourself to highlights (of events and results) shared by others. A start-up that raised a ton of money, an entrepreneur that sold his business for a large sum, an investor that bought a stock that shot up in a short amount of time, or a tweet sharing outrageous investment results.
Events are visible in nature and often highly publicized which creates the propensity to cause widespread FOMO.
What isn’t visible or publicized are the processes that have been in place long before the FOMO-inducing event happened.
Whether it be the years of hard work, the failures, the experience accumulated, specific systems and network built, specialized skills acquired – these processes are never visible or publicized – but existed well before the event happened.
It’s like they say:
It takes a long time to become an overnight success.
Of course, there are always people that end up getting lucky. But, in my opinion, the vast majority of beneficiaries in events/results that give you FOMO were not just lucky.
This concept is illustrated in this incredible video with Michael Jordan:
Jordan beautifully articulates the differences between the events you see versus the processes you don’t see:
- highlights at the free-throw line (event you see) VS the gym (process you don’t see)
- game-winning shots (event you see) VS number of missed shots (process you don’t see)
- the flash (event you see) VS game built on fire (process you don’t see)
- Jordan’s successes (event you see) VS failure and pain giving him strength and motivation (process you don’t see)
- basketball being a god-given gift (event you see) VS something that Jordan worked for every single day of his life (process you don’t see)
The processes (that you don’t see) lead to events (that you do see). The lesson here is, don’t focus on other people’s events. You can’t see their processes, and by focusing on their events you will have a misguided perception that is solely focused on the outcome and not what it took to get there.
Ignore events, focus on processes
Focus your time and energy on your processes aka “hitting the gym“. Focus on getting your reps and sets in, tweaking your form, and most important of all, maintaining consistency. Whether this means acquiring industry-specific knowledge, building systems, honing skills, expanding your network, or just growing your experience. Don’t skip leg days, as a matter of fact, don’t skip any days. Every day you hit the gym, the effects compound, even though you won’t see visible results until far into the future.
A great book on this concept is Atomic Habits by James Clear.
As James mentions in his book, the results you’ve achieved to date are a lagging indicator of how you spent your time and the processes you had in the past. How you spend your time today and your current processes are a leading indicator of what your future looks like.
Most people focus on lagging indicators (their current results) and overlook leading indicators (their current processes). This is obviously backward in trying to get somewhere.
And even worse, FOMO is focusing on other people’s lagging indicators. This completely distracts you from “hitting the gym” and is incredibly counterproductive. It falsely makes you believe there is a shortcut as you likely have no idea what their leading indicators look like.
By focusing on your current processes you will ultimately lead to an event/result of your own at some point in the future. This event/result may cause FOMO in others, but you will know that it took a lot of “hitting the gym” for you to obtain it.
Fear of missing out is normal and unpreventable. Understanding this feeling and the flawed perception of FOMO will however help you to effectively manage it.
Every time I feel the FOMO urge, I remind myself that all that I’m looking at is a ‘result’ and there are a lot of processes that I cannot see that led up to the event/result. I stay focused on my own processes, content that they will lead to events/results in the future.
Hi there! I’m Jay Vasantharajah, Toronto-based entrepreneur and investor.
This is my personal blog where I share my experiences building businesses, making investments, managing personal finances, and traveling the world.
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