Use Fear Smartly

Today seems like a good a day as any for talking about fear. I have my Twitter feed blowing up about coronavirus, factories shutting down in China, and the stock market dipping out of pandemic panic. In other words, investors are pulling a bit away from the market because they’re afraid.

You might see this happening and feel afraid, too. If these folks are lowering their contributions, should I do the same? Especially when my investments are also losing their value? You don’t want to lose more value and be left holding the bag! We’re due for another recession anyway, after the longest bull run in history! SHOULD I LOCK IN MY LOSSES NOW AND NOT WATCH HELPLESSLY AS I LOSE HALF MY NET WORTH???!!!

In a word: no. You’re feeling fear and it’s pushing you to act irrationally. You’re supposed to use fear smartly, which will look different today than it did when humanity was still pre-civilization. Way back then, fear was part of a very finely-tuned feedback system that kept you alive when there were predators nearby or other imminent dangers. Now that we have things like grocery stores and structured lifestyles, fear doesn’t serve that same purpose. You can still use your fear to make yourself very successful, but only if you use fear smartly.

And panic-selling is not the way to do it.

Unregulated Fear Makes You Do Dumbass Things

After my year from hell in 2016 my life has gotten astoundingly stress-free. My finances are on auto-pilot and I’ve structured my income and budgeting to always leave me doing great. Despite this, I can still be seized by fear and become its bitch.

Case in point: in winter 2018 I found a great deal on Craigslist for a queen-sized wool blanket, so I set out to go pick it up. It was a very cold day and the slushy-snow combo made it hard to navigate on my bike. When I reached the lady’s house she also threw in a couple of down pillows she hadn’t used after buying, which was great. However, I didn’t really have enough bike storage to bring all three items back comfortably. Maybe I should just lock my bike here and call a Lyft?

And just like that, fear took the reins.

But you don’t want to pay for a Lyft because you won’t get your exercise while making the environment suffer because you didn’t plan ahead. Also you CANNOT waste that $20 for fare and tip because you might need that $20 in your budget? Plus you can’t leave your bike chained here because SOMEONE MIGHT STEAL IT and cut through your lock and THEN how will you manage to get around without walking for 3 hours daily through the slush and ice which is so bad!!

And so on. The stream of fear-mongering got to me so bad that I ended up stuffing the pillows underneath my coat and riding away with much more insulation than I was banking on. So instead of getting home super-fast and properly enjoying my newest possessions, I biked all the way back through slush pits and snow banks, which made the trip far longer than it normally would be.

Fear is Deeply Rooted and Hard to Confront

Fear propelled me to bike for an hour with the comforter and down pillows. Before that, fear kept me living in a teeny apartment with no heat or A/C for two years after graduating. Fear made me keep my mouth shut when something went wrong at my first job, like when I had too many tasks or a manager was treating me badly. I knew nothing at all about how to use fear smartly.

I have a lot of stories about fear, even during the times of my life I thought I was fearless. My senior year of college, fear kept me in a mouse-infested apartment with creepy roommates and crap utilities. I also worked four (yes, four) jobs at one point, on top of my full course load, because I was terrified of going broke.

I know what I was afraid of, after having left my childhood home and vowing to never live there again. I knew the only safety net, if there was one even down there, would be living with people that are eager to tear me down. It would be even worse than before, however, as my going back there would prove that they won, that I really can’t function in the world on my own like I always hoped for. I was no longer willing to deal with the physical harm, the insults, the neglect, the bullying. I was afraid of that possibility – that I’d be forced back to my parents’ house for any reason whatsoever.

Now, I know from hindsight that I would have had others to rely on, such as dear friends who’d open their homes to me at the drop of a hat. It was my mindset that kept me from noticing these safe harbors; I didn’t know right away that this needed to be unlearned.

Using Fear Smartly as a Path to Financial Success

While I lacked in this skill, I did have something else that would help me through this: smarts. Smarts got me thinking this crucial question: how do I avoid ever needing to go back? Answer: financial security. A tall order for a soon-to-be-college-graduate, but I was willing.

So, I used fear SMARTLY to help me get my shit done. It was my initial motivator to learning about investing, how to budget, and how to make myself look like an amazing job candidate. That ground work continues to help me today when I see my investments dropping like they have for the last week; I already know, thanks to those fear-fueled research sessions, that the stock market experiences dips like this from time to time. I know staying invested will pay off more than panic-selling. No irrational fears here; the only fears I have are those that serve me well.

Note, however, that using fear and using smarts are both crucial. If I used my fear, but not my smarts, I’m sure my life would have been riddled with breakdowns and serious spirals; no way could I have begun to understand how to weave my own safety net. If I used my smarts, but without fear, I would have operated on the mistaken premises and viewpoints that help you survive abuse, but aren’t so helpful in the real world. It’s scary to think about how, if I didn’t know to be afraid of it, I could have fallen in with a bad crowd and renewed the cycle of victimhood just because it was most familiar to me.

Final Thoughts

In general, money is scary! In our world, money is the basic judge of whether you live super comfortably or live with suffering. Any suffering beyond the basics can, usually, be assuaged by more money. All that power is in an entity you can’t reason with and which cannot sympathize with your situation. And it seems like this behemoth thing of predictions and equations that emotionally takes you back to the times of oracles divining the will of the gods. It’s enough to make any newbie uncomfortable, let alone nervous and afraid.

With all this power and importance, money gets to be a very intimidating entity, especially if you have no one that’s guided you through it. Let’s walk through the fears now and use your smarts to make the scary stuff go away. What are your biggest fears around money and how do you plan to confront them?