By now we’ve all heard of FOMO. It means the Fear Of Missing Out and while it is often used to refer to people’s jealousy at missing out on cool events or socialising, FOMO is very present in the financial world.

When it comes to property, FOMO can refer to ‘Sheeple’ behavior or a flock mentality. If everyone is buying a property, someone with FOMO will want to put rational thinking to the side and join in the party, regardless of whether the timing, location or price best suits their situation.

FOMO can be much more serious in home buying than in the social world. While people might be disappointed to miss out on going to a concert, they can suffer sheer panic at the thought of missing out on owning a home because the stakes are so high. They need to live somewhere, or build wealth through investing, so if they have a chance and miss it, they are worried it could cost them years and a small fortune.

Fear is an emotion

Experts will always tell you to leave emotions out of financial decision. And when it comes to emotions, fear is one of the most dangerous for driving you to make a wrong call and make it fast.

As property values rise and fall, people can struggle to hold their nerve and may fall into the trap of thinking that markets will keep rising indefinitely, or keep falling. This is the reason some people make hasty decisions like buying at the top of the market or selling at the bottom. They are worried things might get worse, so end up making the polar opposite of a savvy investment decision.

These decisions can lead to increased debt, diminished returns, extra risk exposure and an overall loss of wealth, whether through missed opportunities or actual tangible value loss.

Building a FOMO-resistant mindset

If you have spent time to come up with an investment strategy and goals for the long term, it’s important to stay focused on those to shut out the outside noise.

If you trained to run a marathon, you wouldn’t freak out at every hill in the road along the way. You have a long term goal to achieve and have equipped yourself to do it, so you have faith you can ride out the obstacles.

There are steps you can take to build a FOMO- resistant mindset, prioritise rational decision-making and protect yourself from poor impulse decisions along the way.

1. Research and education

The first step is research and due diligence. Take the time to educate yourself, get to understand market trends and assess risks before committing to any investment.

2. Engage professional advice

Seek guidance from financial advisors, lawyers, accountants, buyer’s agents, other investors and anyone with lived experience or professional qualifications in the field. These people can impart knowledge, suggest ways you can achieve your goals and allow you to learn from their own experiences.

3. Define clear goals

Ask yourself what you want to get out of your investment journey. Do you want to save for retirement, generate passive income, or make a quick buck to leverage into a bigger opportunity? Having clear financial goals with defined ways to measure your progress will make you much likelier to achieve your dreams.