Financial FOMO: Avoiding 'Comparison Envy'

Summary

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WSJ Your Money Briefing

Episode Summary: Financial FOMO: Avoiding 'Comparison Envy'

Date: September 4, 2018
Host: J.R. Whelan
Guest: Joe Duran, CEO and Founder of United Capital

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Episode Overview

This episode explores the concept of "financial FOMO" (Fear of Missing Out) and the accompanying danger of "comparison envy"—the tendency to judge our financial success and happiness against the curated images of friends, neighbors, and social media connections. Host J.R. Whelan speaks with Joe Duran about why comparing your finances to others' can hurt your financial well-being, and they outline practical advice on how to avoid these pitfalls in pursuit of true financial security and happiness.

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Key Discussion Points & Insights

The Dangers of Financial Comparison

[02:53]

• Social Media Skews Reality: Joe Duran points out that we often see only the glossy surface of others’ lives on social media—luxury vacations, new cars, expensive meals—but not the sacrifices or realities beneath.
  • “You see the way that people live, but you don't see the cost of it... the cost is seldom left out of any conversation.” — Joe Duran [02:53]
• Hidden Costs & Trade-offs: The images don’t show, for example, missed family time or financial strain incurred for lifestyle appearances.

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The Impact of Social Media

[03:28–03:57]

• Influence on Self-Esteem & Spending: Social media amplifies comparison, tempting people to spend in ways that may not suit their means.
• “Not everybody can afford necessarily what they spend money on... they're not showing you the argument they might be having after that second glass of wine.” — Joe Duran [03:42]
• Memorable Moment:
  • “So history records the nice looking beef stew, right? But not what's happening around it.” — J.R. Whelan [03:53]

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The Fallacy of "Keeping Up"

[03:57–04:52]

• Personal Values Matter: Duran emphasizes happiness isn’t a zero-sum game. Others’ happiness or wealth doesn’t reduce your own.
  • “What makes one person happy is not necessarily what should make you happy.” — Joe Duran [04:09]
• The Pie Isn’t Fixed: “The pie is not a fixed pie. It doesn't mean because somebody has more of something that you're going to get less of it.” — Joe Duran [04:23]
• Investing Angle: Comparing portfolios or investment success—like boasting about catching Apple stock early—can lead to reckless or copycat investing moves.

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FOMO in Investing: Behavioral Risks

[05:07–06:49]

• Two Core Fears:
  1. Fear of Missing Out: “The market's already gone up so much... now I better pile in too.” — Joe Duran [05:42]
  2. Fear of Losing Money: “It is always the fear of losing money [that's stronger].” — Joe Duran [06:02]
• Cycle of Anxiety: Human nature leads people to oscillate between chasing gains and fearing losses, often influenced by others’ stories, rarely by the full truth.
• Selective Disclosure: Most people share their wins, not their losses. “You're never going to hear... I bought Apple, but... I also bought something else that went down a lot after I purchased it.” — Joe Duran [06:37]

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The Importance of Conscious Choices

[07:00–07:44]

• Live According to Values:
  • “This is your life. Other people's success does not affect your success. And other people's choices should not affect your choices.” — Joe Duran [07:09]
  • “Make conscious choices, make deliberate decisions that are aligned with your values. That probably is the most important lesson.” — Joe Duran [07:32]
• Resist Social Pressure: Don’t fall into the endless cycle of “keeping up with the Joneses.” Remember, appearances don’t reveal financial wellbeing.

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Living Within Your Means

[07:51]

• Most "Enviable" Lifestyles Are Built on Debt: “Most people spend more than they have. Most people live beyond their means. And most people will end up having to be supported by their children at some point. That's the sad reality...” — Joe Duran [07:53]
• Find Satisfaction in Prudence:
  • “Being prudent, living within your means, that's rewarding, too. You don't need to boast about it... you enjoy for you and for all the right reasons.” — Joe Duran [08:11]

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Notable Quotes

• “You don't see the cost of it... you don't see the extra time they had to put in to take that lovely vacation.”
  — Joe Duran [02:53]

• “They're not showing you the argument they might be having after that second glass of wine.”
  — Joe Duran [03:42]

• “Remember, the pie is not a fixed pie. It doesn't mean because somebody has more of something that you're going to get less of it.”
  — Joe Duran [04:23]

• “The number one thing is to make conscious choices, to make deliberate decisions that are aligned with your values.”
  — Joe Duran [07:32]

• “Most people spend more than they have... and most people will end up having to be supported by their children at some point.”
  — Joe Duran [07:53]

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Practical Takeaways

• Focus on your own financial goals and values—avoid making choices just to imitate others.
• Social media showcases wins, not costs—never assume the full story.
• Comparison often leads to unnecessary spending and risky investment behavior.
• Conscious, values-driven decisions lead to genuine happiness and long-term wealth.
• Prudence and living within your means are achievements in themselves—even if they’re not Instagrammable.

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This episode provides a thoughtful reminder to stay grounded, value what you have, and avoid the costly traps of financial comparison and FOMO.

Transcript

[Podcast Announcer]

This episode is brought to you by Charles Schwab. Decisions made in Washington can affect your portfolio every day, but what policy changes should investors be watching? Washington Wise is an original podcast from Charles Schwab that unpacks the stories making news in Washington right now and how they may affect your finances and portfolio. [e-mail] WashingtonWise.

[J.R. Whelan]

With your money briefing. I'm J.R. whalen. You've heard of FOMO, or the fear of missing out? Well, that feeling could cost you dearly when it comes to your personal finances. We'll explain in a moment. First, these money and market stories you need to know. If you shop on Walmart.com and you see a product is out of stock, it could be because the company changed its e commerce systems to to avoid orders deemed too expensive to ship, the Journal Sarah Nassauer reports the change means that a bottle of detergent or a can of cat food stored too far away from a customer shipping address will be unavailable for purchase. Previously, Walmart would ship those items regardless of distance or shipping cost. The shift is part of a test to see if Walmart can deliver more products via ground shipping, which is cheaper than air shipping in two days or less, and reduce situations where online orders arrive in multiple packages or from different warehouses. The Wall Street Journal Heard on the street team says that investors looking for the next Gucci to put their money to work in the luxury fashion sector should not overlook, well, Gucci Heard on the street says that while alternatives such as Prada and Burberry might seem attractive, Gucci's sales have popped roughly 45% since 2016, and younger buyers account for half the company's numbers. And that's highly unusual in today's luxury market. And the Wall Street Journal Real Estate Bureau reports that TV personality Dick Cavett is cutting the price of his Montauk estate by 22% to $48.5 million. That's down from the $62 million he was seeking when he first listed it last spring. Cavett's 7,000 square foot estate, known as Tick hall, sits on six acres and has six bedrooms, a half acre pond, a reading perch with views of the ocean and a bell tower above a wraparound porch. The grass is always greener next door in the neighbor's yard. We hear that often. But developing comparison envy can not only impact one's sense of pride, it can damage one's financial health. United Capital CEO and founder Joe Duran is here to discuss. So Joe, we use measurements and benchmarks to gauge how well investments are performing, but when we compare ourselves to friends and neighbors, we often don't see what's going on below the surface.

[Joe Duran]

You know, we don't advertise. When you go on social media, you don't advertise what it costs to get things. You just show how lovely and glamorous your life is. And there are really three ways in which you get impacted. Two in really your lifestyle. The first is of course that you see the way that people live, but you don't see the cost of it, as you just mentioned. And so you don't see the extra time they had to put in to take that lovely vacation or the fact that maybe, maybe they haven't been able to spend time with their family and watch their kids sports because they needed to make more money. So the cost is seldom left out of any conversation.

[J.R. Whelan]

Now you mentioned social media. That's a big culprit here because whether it's posting photos of vacations, new cars, nights out at a fancy restaurant, it's easy to compare ourselves and feel down about things. But not everybody can afford necessarily what they spend money on.

[Joe Duran]

That's true. And it's also true that, that often the meal is not quite as lovely as you imagine it might be. They're not showing you the argument they might be having after that second glass of wine.

[J.R. Whelan]

So history records the nice looking beef stew, right?

[Joe Duran]

But not what's happening around it. Now it's possible that everything is as perfect as that picture you're looking at, but it's also equally likely that he's annoyed at how expensive the meal was, or she's annoyed at the fact that he won't stop boasting about it. So again, what we've got to remember is this is their life and it is not your life. And that their being happy takes nothing away from your being happy. And that what makes one person happy is not necessarily what should make you happy. And so this comparison, it's very important to remember two things. One, we all have different priorities and the way they live doesn't affect you. And that's the second point, which is the pie is not a fixed pie. It doesn't mean because somebody has more of something that you're going to get less of it. You certainly could take the time to go and have a lovely dinner and advertise about it. It's just not what you choose to do. It also has real significant implications in investing which can really harm you more.

[J.R. Whelan]

So when you see images and photos and videos of people who do things that you might want to do someday. It could inspire you then to build a good portfolio and build a good plan to be aspirational and get to that point. If that's what you want to do,

[Joe Duran]

yes, as long as it's what you want to do. So I always say to people who are in this predicament, and, you know, we all have kids and we see it with our kids, this what we call FOMO now, it's become a thing. Fear of missing out. And you can have fear of missing out in a lifestyle sense, wanting what people have, even though you might never even ever be able to get it. Watching somebody on a private jet, even though you know you probably can't afford it, and ending up making sacrifices to. To get to that private jet that might not be right for you. So I always say regulate your choices to things you actually want. But in an investing sense, you can bet that just like people don't advertise what things cost or what it costs them to make it, they don't advertise the mistakes they make in investing either. And in this environment where the market's been doing really well, a lot of people will start boasting about how well things are going. And in investing, you have two fears that you've got to always regulate. One is the fear of missing out. In other words, market's already gone up so much and they bought Apple when it was at 90. Now I better pile in too, already having messed up, but now you're going to go make the mistake of piling on and not necessarily the best time. Or you have the fear of losing money. And when that happens, you know which fear is actually stronger? It is always the fear of losing money. So when you have the two, the problem is we always bounce between one and the other as human beings. We're constantly in this, should I be going for more or should I be protecting? And that delicate balance can very much get affected by what we hear around us, what people tell us they're doing. You're never going to hear. Well, not never, but seldom hear somebody say, I bought Apple. But I've neglected to mention that I also bought something else that went down a lot after I purchased it.

[J.R. Whelan]

That's true. At a cocktail party, it's always the good news. And it's always, take a look at the great shirt I have or what I bought. On Wall street, you never really hear all the warts and all that go along with it.

[Joe Duran]

Right? Right. And again, you might be sitting next to Midas, but the highest likelihood is that the reason they're sharing it. If you have to boast about it, it's probably because it costs you a lot, either in mistakes or errors. So, again, it's very important to remember this is your life. Other people's success does not affect your success. And other people's choices should not affect your choices. You have to decide what matters to me, really, what are my priorities in this world? What are my intentions? And I say to everyone, the number one thing is to make conscious choices, to make deliberate decisions that are aligned with your values. That probably is the most important lesson. If you ever start feeling that other people have a lot more than you

[J.R. Whelan]

do and don't fall into a trap where you have to spend and spend to keep up with the Joneses and feel like you have that responsibility, there's

[Joe Duran]

no reason to, because, again, you can't see the cost of the lifestyle that they're having. And remember, most people spend more than they have. Most people live beyond their means. And most people will end up having to be supported by their children at some point. That's the sad reality of where we live. And so being prudent, living within your means, that's rewarding, too. You don't need to boast about it because you don't have to, because what you enjoy, you enjoy for you and for all the right reasons.

[J.R. Whelan]

Well, that is sound advice from United Capital CEO and founder Joe Duran, joining us here in our studio. Joe, thanks for being with us.

[Joe Duran]

Of course. It was great to be here.

[J.R. Whelan]

And that's your money briefing. I'm J.R. whelan in New York for the Wall Street Journal.

[Podcast Announcer]

This episode is brought to you by Charles Schwab. Decisions made in Washington can affect your portfolio every day. Washington Wise from Charles Schwab is an original podcast that unpacks the stories making news in Washington. [e-mail] WashingtonWise.