Investiphobia: The fear of not keeping up with the Joneses
Apr 14, 2011 03:39 EDT

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family finances | investing | Personal finance | spending

Investiphobia cover REUTERS/HandoutThe following book excerpt is taken from Investiphobia: Overcome Your Deepest Investment Fears by Paul Puckett Jr.

The Joneses must be the richest, fastest, strongest, smartest, best human beings on the planet. That would explain why we are constantly reminded by our parents, school teachers, and mentors that it would be wrong, absolutely wrong, to even attempt to keep up with them!

Many people are concerned about outside appearances, for some it is their biggest priority. If their neighbor gets a boat, they need a bigger or faster boat. If their best friend takes a cruise, then they develop a sudden interest in travel. This is true for investors who are terrified they are not keeping up with other people.

The financial services industry knows many people want to feel like they are getting more than everyone else. So, their commercials often target those who want to keep up with the Joneses. Picture a slim, well-dressed guy named John on the golf course. He is talking with his chubby, not-so-well-dressed buddy, Steve, about the great tip that he received from his broker. His buddy, Steve, wishes that he was lucky enough to have a broker like John’s because then he would be happy, well-dressed, and slim. As the background music gets louder a beautiful woman, shown in slow motion, gives John a hug to congratulate him on his great game. As John gives Steve a sympathetic wink there is a tagline that says something like, “Don’t be like Steve; you can be like John simply by calling ABC & Company at 1-800-PERFECT.”

Think about the real message behind this ad. What is being advertised? Notice that there is no mention of an investment product or service, just a happy guy whose account is with ABC — and a sad, pathetic character who Paul Puckett REUTERS/Handoutapparently has no direction in life and certainly no women running toward him in slow motion to congratulate him on his most recent successes. This is the message: You will be happier than your friends, in fact, envied by them, simply by doing business with ABC. If this is compelling to you, then you may very well have a form of investiphobia that keeps pushing you to keep up with the Joneses.

People often ask financial professionals what they think about a particular investment. They often reference a friend or neighbor who was raving about it. It’s often not a good choice for their portfolio, but they still want it because their friend owns it. And they want a little bigger stake in the investment than their friend. Like the advertisement described above, it isn’t about the product at all. It’s purely about status and their perception of how they will feel about themselves once they have it in their portfolio.

If you have this compelling need, ask yourself a few questions: When you bought the last investment to keep up with the Joneses, did it make you happy? If so, for how long? Did Mr. or Mrs. Jones even notice what you had done, or even cared nearly as much as you did?

When the fear you will not keep up with the Joneses is driving your investment decisions, you are at a high risk for an investment scam. In high school, the coach always said not to worry about the other lanes. “Looking costs you time!” Coaches know their athletes will perform better when they focus on the only thing they can control, themselves. Do not worry about the other competitors, but strive for your new personal best. Hopefully your friends invest their money wisely, but resist the urge to look in their lanes. Unlike sports, the Joneses may not even share your personal objectives. Following them leads you to their destination, assuming they know where they are going!

Take a look at your portfolio and each individual investment. Did you invest in any of them just to keep up with the Joneses? If so, consider selling, particularly if it doesn’t fit with your current goals and objectives.

Never make an investment to keep up with somebody else — just let the Joneses do whatever they’re going to do … and stay in your lane.