You were there.
They had to face the fear of rejection, the fear of loneliness, the fear of missing out, the fear of being exposed as a fraud, the fear of insecurity, the fear of money, the fear of failure, the fear of the end and the fear of losing your freedom.
There are so many ways fear can enter our psyche and scare us away.
But fear, believe it or not, has a bad reputation.
That’s what 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,” says. “Fear,” she writes, “has become the victim of unfortunate PR.”
“We were told it was a barrier to living our best lives,” said Torabi, a personal finance expert who also hosts the “So Money” podcast. We are told, “If you let fear guide your decisions, you will end up in dead ends, in collisions, and in hellish embarrassments.”
In fact, being fearless is not a good thing.
“I’m not saying you should let fear control you,” Torabi writes. But you’re better off thinking of it as an emotion that helps 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 is simply not realistic. Fear can be very healthy…it is literally the emotion that has helped us get saved in so many cases. Without fear we wouldn’t be here today. It is an evolutionary advantage of being human. We experience fear because it wants to protect our lives.
When fear arises, it is important to listen to it. That’s the healthy move instead of pushing it away, fighting it and pretending it doesn’t exist.
Fan of Fear: Author Farnoosh Torabi. (Photo courtesy of Farnoosh Torabi) (Farnoosh)
There’s a really interesting section in your book about fear of money broadly, such as fear of a recession. Can you tell us a little about it?
We often have an abstract fear of money. We fear these huge problems like recessions, stock market crashes, and bank failures, which are legitimate fears because they happen, and they are not fun to watch, witness, and experience.
The story goes on
To turn these fears into a healthy stimulant to motivate you to action, as opposed to a fear that keeps leading you astray and stuck, you need to distill them. Find a way to use that fear as a catalyst to give you a sense of urgency.
Next time you’re worried about a financial matter, like the fear that you might be laid off in the event of a recession. Personalize it. What would a layoff look and feel like in your household? How would it affect your spending, your ability to act and your ability to invest?
If I’m actually worried about a recession happening and pretend I’m expecting a job loss tomorrow or a loss of income for the next six months, I’ll take a look at my budget. I’ll look at my expenses. I’ll look at things I might be able to save. You start by creating a plan. Use fear as a stimulant to develop a plan for your money. And if that happens, you can take action.
(Court of Farnoosh Torabi) (Simon and Schuster)
You’ve made some changes to your own investment portfolio out of fear. Can you explain this in more detail?
As a financial journalist, I know that when the market is unstable and volatile, that’s exactly what the market does and you have to think long-term and stay the course. I weathered the recession without moving my stock positions. But lately it’s been scaring me. It wouldn’t go away. It kept popping up and that surprised me. I had to think about it… It signaled to me that something was wrong. I decided to act on my fear.
I’m in my forties. I have two children. I have a mortgage. I have a business. Can I really invest as much in the stock market as I did in my 20s? And no, I can’t. I didn’t have a knee-jerk reaction, but I listened to the fear and said, “Okay, I think I just need to educate myself better first.” So let me see where my stocks are in my portfolio. How am I assigned to this portfolio? I repeated the quiz that the online platform asks you to take before deciding on your allocation between stocks and bonds. And it turns out that because of my current life situation, my risk tolerance and all of those things, I had to reduce the equity portion.
But your retirement accounts might not end up being as robust as you imagined, right?
I knew that if I just reduced my stock holdings, the math wouldn’t add up. I risk potentially retiring with less money. So if you follow your fears, you need to be aware of the risks. What compromises are there? Then there is more to do. I personally have been increasing my cash contributions to my retirement portfolio each month to compensate for the fact that I may receive a lower return. But I will invest more of my money to reach the target amount I want in retirement.
Fear of money in general may have its roots in our childhood, right?
As a child you experience things. You witness things. Things are modeled for you. And of course that will shape your relationship with money. As an adult who earns your own money, you now have a choice. We sometimes forget that we have the choice and the power to decide what type of financial life we want to lead.
We might think that if our parents were bad with money, we would inherit this. We don’t trust that we might have a different path and be capable of something different. This is a very psychological barrier.
So if you’re afraid of money, the first healthy step is often to figure out what’s at the root of that fear. You’re afraid you’ll never have enough. Or if you’re worried that talking about money might spark a fight in your relationship and lead to a divorce, then it didn’t just pop into your head out of nowhere. There’s a story there. You may discover that this fear is actually fiction. And now you have the opportunity to change the way you want to manage your relationship with money for yourself.
According to author Farnoosh Torabi, believe it or not, fear has a bad reputation. (Getty Creative) (Steven Robinson Pictures via Getty Images)
Have you faced financial fears?
When I was in my 30s, I was afraid of my financial ambitions. I didn’t trust that a woman like me could try to make more money without it costing me great things, like loneliness and rejection and maybe divorce and missing out on my children’s lives because I pursued more money. I just didn’t trust that it could work out for me. And it was also a fear for me because as a child I didn’t see it as a role model and I never saw women being financially powerful.
Our society portrays financially ambitious women as women who are neither virtuous nor morally motivated. You can’t hold on to a family. They are greedy – all these things because money is again a male domain and we live in a patriarchy and it becomes what we buy.
For all of these reasons, I was afraid of being able to continue my career and be successful at it. And then I realized that the fear actually indicated that I wanted to protect my time and my relationships in this endeavor. On the other hand, it became my job to figure out how to do that. And the first thing I did was increase my prices, which requires no time.
Many people fear that they will never make enough money or never feel rich. So what is rich?
Rich has 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 rid of the “I’ll only be rich if I accumulate a lot of money” mindset. Wealth is the measure of so many other things that go beyond dollars and cents. It is the measure of your health, your mental and physical health, your relationships, your job satisfaction, your contributions to your community, your sense of connection, your access to basic resources and basic freedoms.
There are different levels of it, but I think that’s what being rich is really about. It makes you grateful, doesn’t it?
Kerry Hannon is a senior reporter and columnist at Yahoo Finance. She is a workplace futurist, career and retirement strategist, and 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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