You’ve been there.
You’ve had to face the fear of rejection, fear of loneliness, fear of missing out, fear of being exposed as an imposter, fear of uncertainty, fear of money, fear of failure, fear of endings, fear of losing your freedom.
There are so many ways fear can push into our psyches and stop us cold.
But fear, believe it or not, has gotten a bad rap.
So says Farnoosh Torabi, author of the new book “A Healthy State of Panic: Follow Your Fears to Build Wealth, Crush Your Career, and Win at Life.” “Fear,” she writes, “has been the victim of some unfortunate PR.”
“We’re told it’s a barrier to living our best life,” said Torabi, a personal finance expert who also hosts the podcast So Money. We’re told that “if you let fear drive your decisions … you’re headed for dead ends, collisions, and hellish embarrassments.”
In fact, being fearless is not a great thing.
“I’m not saying to let fear boss you around,” Torabi writes. But you’re better off thinking of it as an emotion that’s there to help you navigate the world.
Here’s what Torabi recently told Yahoo Finance about how fear can actually make us better, edited for length and clarity:
So, Farnoosh, why is a healthy state of panic good for us?
This pursuit of happiness and emphasis on always being happy all the time is just not realistic. Fear can be very healthy … it is quite literally the emotion that has helped save us in so many cases. We wouldn’t be here today if it hadn’t been for fear. It’s an evolutionary benefit to being humans. We experience fear because it wants to protect our lives.
It’s important when fear shows up to listen to it, that’s the healthy move, as opposed to pushing it away, combating it, pretending it doesn’t exist.
There’s a really interesting section in your book about fear of money in a big picture way, say, fear that there will be a recession. Can you talk a little bit about that?
We often fear money in the abstract. We fear these big juggernaut issues like recessions and stock market crashes and bank failures, which are legitimate fears because they happen, and they’re not fun to watch and witness and experience.
To make those fears a healthy stimulant to be motivated to take actions as opposed to a fear that keeps you spiraling and stuck, is to distill it. Find a way to use that fear as a catalyst to give you a sense of urgency.
Next time you’re fearing a financial matter in the abstract, like the fear that you might get laid off if there is a recession. Personalize it. What would a layoff look and feel like in your household? How would it impact your spending, your ability to do things, your ability to invest?
If I’m actually afraid that there is going to be a recession, and I pretend to anticipate a job loss tomorrow, or income stopping for the next six months, that will make me go look at my budget. I’m going to look at my spending. I’m going to look at things that I might be able to cut back on. You start to create a plan. Use fear as a stimulant to come up with a plan for your money. And so in the event that that might happen, you can hit the ground running with action.
You made some changes in your own investment portfolio based on fear. Can you elaborate?
As a financial journalist, when the market is shaky and volatile, I know that’s what the market does and you have to play the long game and stay the course. I went through the recession without moving my stock positions. But recently it has made me fearful. It wouldn’t go away. It kept showing up and that surprised me. I had to think about it … It was signaling to me that something was a little off. I chose to act on my fear.
I’m in my forties. I have two kids. I have a mortgage. I have a business. Can I really invest so much in the stock market as I was in my twenties? And no, I can’t. I didn’t make any knee-jerk reactions, but I listened to the fear and I said, okay, I think I need to just get more educated at first. So let me see where my stocks in my portfolio are. How am I allocated in this portfolio? I retook the quiz that the online platform asks of you before they decide on your breakdown of stocks versus bonds. And it turned out that I needed to scale back with equities because of where I was in my life, my risk tolerance and all of those things.
But your retirement accounts might not end up as robust as you had imagined down the road now, right?
I knew that the math is not going to add up anymore if I only scaled back my stock holdings. I’m risking perhaps arriving in retirement with less. So when you follow your fears, you need to be aware of the risks. What are the trade-offs? Then there’s more work to do. For me, I increased my cash contributions every month to my retirement savings portfolio so I can sort of make up for the fact that I am potentially going to get a smaller return. But I’ll invest more of my money to be able to get to that target amount that I want in retirement.
Fear of money in general can have roots in our childhood, correct?
When you’re a kid, you experience things. You witness things. Things are modeled for you. And so, of course, that’s going to shape your relationship with money. Now as an adult who’s making her own money, you have a choice. We forget sometimes that we have this choice and this power to sort of decide what kind of a financial life we’re going to live.
We might think that if our parents were bad with money, we’re going to inherit that. We don’t trust that we might have a different path and that we’re capable of something different. This is a very psychological barrier.
And so when you fear money, often the first healthy move is to figure out, what is the root of this fear? You’re afraid that you’ll never have enough. Or if you’re afraid that talking about money is going to elicit a fight in your relationship, and you’re going to get divorced, well that didn’t just come into your brain out of nowhere. There’s a story there. You may realize that this fear is actually a fiction. And now you have the opportunity to change how you want your relationship with money to be for yourself.
Have you confronted financial fears?
When I was in my thirties, I was afraid of my financial ambition. I didn’t trust that a woman like me could try to make more money without it costing me big things like loneliness and rejection and maybe a divorce and missing out on my kids’ lives because I was going to be pursuing more money. I just didn’t trust that it could work out for me. And also it was a fear for me because I didn’t see it modeled as a kid and never ever saw women being financially powerful.
Our society paints financially ambitious women as women who are not virtuous or morally driven. They can’t hold down a family. They’re greedy — all these things because again money is a man’s domain and we live in a patriarchy and it becomes what we buy into.
For all these reasons, I feared being able to pursue my career and be successful at it. And then I realized that the fear was really pointing to me wanting to protect my time and my relationships in this pursuit. So then again, it became my job to figure out how to do that. And the first thing I did was I raised my prices, which requires no time.
Many people fear that they will never make enough money or feel rich, so what is rich?
Rich is having access to resources. We think rich is how much is in your bank account. And, of course, that’s part of it. It’s important to get out of this mindset of, “I’m only rich if I have an accumulation of money.” Richness is the measure of so many other things beyond dollars and cents. It’s the measure of your health, your mental and your physical health, your relationships, your satisfaction at work, your contributions in your community, your feeling of connectedness, your access to basic resources and basic freedoms.
There are different levels of it, but I think that’s what being rich is really all about. It makes you feel grateful, right?
Kerry Hannon is a Senior Reporter and Columnist at Yahoo Finance. She is a workplace futurist, a career and retirement strategist, and the author of 14 books, including “In Control at 50+: How to Succeed in The New World of Work” and “Never Too Old To Get Rich.” Follow her on Twitter @kerryhannon.
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