Broker Check

Financial Porn

| March 20, 2019
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The last 100 years have brought with them volatile stock markets, economic recessions, political scandals, natural disasters, and more. Just like the changing of the seasons, positivity and negativity are cyclical and you cannot have one without the other.

During vulnerable economic times, it’s often the salacious financial porn-type information that keeps us awake at night. When negative news hits our ears, it is easy to fall into the trap of spending precious time worrying about the things that are out of our control. Especially in this digital age when the news is accessible instantly at our fingertips, being addicted to the dark influence of bad news is something that many Americans are guilty of. So how do you learn to turn off the worrying and learn how to identify the difference between truth and scare tactic? Read on for more.

  1. Realize the true nature of media programs.

If you are stuck in a rut of stress and worry about your finances, learn how to receive your information with a grain of salt. Unfortunately, most news shows and television programs are not there to educate us, but to influence us. The media often uses apocalyptic language and drama to persuade us to do something, whether it’s to purchase a product or subscribe to a service. Their motive is to sell, not educate. Take the news you hear with a grain of salt, and research multiple media outlets instead of relying on just one.

 

  1. We are all in this together.

Everything is relative and we are all connected by the desire and stress that money gives us. So just remember, when market volatility hits and your account is down by 25% that means your neighbor’s account is down as well. It’s easy to feel isolated and alone, especially in times of immense financial stress, but take to heart that volatility affects everyone, not just you.

 

  1. Break the cycle of FOMO.

FOMO, or the fear of missing out, takes place financially for us by making us feel like everyone is getting rich but you. Especially in places like Seattle, Washington, it might be easy to feel that everyone but them is a Microsoft millionaire. In reality, most people are just like you: trying to solve life’s problems as they arise and making reasonable financial decisions so that they can have housing, good health and education for themselves and their children.

So what is the best way to break the cycle of FOMO? Take a breath, tune out the white noise of news outlets, and take a breath. Seriously, take a breath, take a pause and perhaps do something else like go on a walk or read a book with your child.

 

  1. Defeat the green monster.

Theodore Roosevelt once said that, “Comparison is the thief of joy.”  When we spend precious mental energy comparing ourselves to others, our inner critics are quick to run wild and sabotage our steps towards self-acceptance and love. This concept ties into the fear of missing out – as if everyone is bursting with the confidence, wealth, good looks or profession that we wish we had. Deep down, we all know that everyone has similar struggles to us, no matter what life situation they are in. If you seek to find more joy in your life, learn to let go of the comparisons and just be you.

  1. The “get rich quick scheme” doesn’t work.

It should be fairly obvious but still deserves to be said…but there are very few real-world examples of someone who was able to get rich quick. Of course, you have your lottery winners or beneficiaries of a rich family member, but for the most part, 99% of the rich people you admire are fueled by passion, talent, and a drive to work extremely hard for their wealth. Although tempting, if it sounds too good to be true (like a pyramid scheme), it probably is.

In order to rise above the temptations of financial doom and gloom, it is imperative to learn to look behind the hype.  Although negativity might seem like the state of the world at the moment, it is equally important to absorb your news with a discerning attitude. What are the credentials and experience of the person who is pitching their products?

I recently had a conversation with a friend who felt like she wanted to go to cash a few months ago. She felt that she had missed an opportunity to save her money during a messy, volatile time in the market.  She came to me concerned that by not converting to cash, she would only lock in losses.  When I was able to review the facts with her (and not just going off of what she was consuming in the media), we saw that her accounts were a higher value than what they had been a few months earlier.  She was indulging in Financial Porn – or the misinformation she was fed on the financial situation. 

Make the conscious effort to not indulge in financial porn.  Instead, choose what you consume carefully. If your mind is racing with salacious financial data, make the decision to instead take a break, leave the iPhone at home, turn off the television and radio and just go for a walk for an hour.  You will be amazed at the benefit that a physical break will give you, as well as keeping your perspective in check and remind you what is most important – for you and your loved ones.

IMPORTANT DISCLOSURES

Securities and advisory services offered through LPL Financial, a Registered Investment Advisor Member FINRA/SIPC.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual security. To determine which investment(s) may be appropriate for you, consult your financial advisor prior to investing. The economic forecasts set forth in this material may not develop as predicted.

Investing involves risks including possible loss of principal. No investment strategy or risk management technique can guarantee return or eliminate risk in all market environments.

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