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We like to think decisions (especially financial ones) are grounded in logic. That when people invest, launch businesses, or change careers, they’re weighing facts, analyzing risks, and making sound, rational choices. But today’s economy tells a different story. More often than not, decisions are driven by something far less calculated: the fear of missing out. This isn’t just about social media envy or skipping out on a hot trend. It’s about how FOMO, fueled by visibility, virality, and the illusion of collective wisdom, has become one of the most powerful forces shaping economic behavior.

In part five of Irrational Thinking in a Logical Economy, we explore The FOMO Economy: how speculation masquerades as strategy, how hype hijacks value, and how the need to belong is distorting what it means to make a smart decision.

-Skool Projekt Staff

Part 5 of 10 in Irrational Thinking in a Logical Economy
by JD Washington

 The FOMO Economy

In December 2020, a man named Glauber Contessoto made headlines for turning his life savings (just over $180,000) into nearly $2 million. Not by inventing something, starting a business, or working a high-paying job. He did it by buying Dogecoin, a cryptocurrency that began as a joke. Contessoto wasn’t a tech expert or a hedge fund analyst. He was a twenty-something living in a one-bedroom apartment in Los Angeles, working in media sales. But what he did have, what many others had too, was an internet connection, a Reddit account, and a feeling that he was missing out. That feeling, more than any financial insight or technical analysis, was enough to override doubt, caution, or long-term planning. It was FOMO (the fear of missing out) and in today’s economy, that feeling has become one of the most powerful forces shaping behavior.

At first glance, FOMO seems like a throwaway term. The kind of thing people say when they skip a party or see friends posting vacation photos online. But in the context of modern markets and decision-making, it is no longer just a pop psychology buzzword. FOMO has become a dominant psychological engine in finance, business, culture, and even politics. It plays on our deepest social instincts, the need to belong, to be part of something, to not fall behind. And when those instincts meet a hyper-connected digital world where everyone’s choices are visible, quantified, and ranked, FOMO doesn’t just influence our decisions. It distorts them. It replaces logic with urgency and turns speculation into strategy. The economy, at least in certain sectors, no longer rewards patience or fundamentals. It rewards attention, momentum, and timing. And those are not the skills traditional economics was built to measure.

This shift has been especially visible in financial markets. In the past, investors were taught to evaluate companies based on earnings, balance sheets, industry trends. The idea was to make rational, informed decisions based on long-term fundamentals. But in the age of Reddit threads, Twitter feeds, and TikTok tips, the investment thesis often begins not with research, but with popularity. If enough people are talking about a stock, or a coin, or a project, it creates its own gravitational pull. People pile in not because they believe in the product or even understand what it does, but because everyone else seems to be getting rich. FOMO turns the crowd into a compass, and social proof into a substitute for due diligence. The more people buy in, the more the price rises, and the more outsiders feel like they’re missing a once-in-a-lifetime opportunity.

What makes this dynamic so potent is that it is emotional, not rational. FOMO doesn’t whisper. It shouts. It taps into that uniquely modern form of anxiety where every success story feels like a personal failure. You see someone post a screenshot of their crypto wallet, and you start to wonder if you’re falling behind. You read about a friend who flipped NFTs for six figures, and suddenly your savings account feels not safe, but stagnant. FOMO doesn’t operate on facts, it operates on perception. And perception, in an always-on, always-scrolling world, is shaped by visibility. You rarely see people’s losses. You almost never see their debt, their stress, their missed margins. What you see are wins, shared loudly, quickly, and without context. But your brain doesn’t account for survivorship bias. It just feels like everyone else is doing better than you.

The result is an economy where visibility itself becomes a form of value. If something is trending, it must be worth something. If enough people believe in it, then it becomes real, at least temporarily. This creates bubbles, yes, but it also reshapes how we think about opportunity. We stop asking “Is this a good decision?” and start asking “Will I regret not doing this?” That question is FOMO’s great sleight of hand. It takes our desire to make smart choices and replaces it with the fear of making the wrong one. It creates urgency where there should be reflection. It rewards speed over strategy. And it punishes those who hesitate, even when hesitation might be the wisest move.

This isn’t just a problem for individuals. Institutions and companies are just as susceptible. Startups raise millions on hype alone, not because they have customers or revenue, but because they’ve mastered the narrative. Investors rush into sectors not because of long-term conviction, but because they’re afraid to be the last one in. Even media and politics follow the same logic. If something is going viral, it must be important. If everyone is watching it, we better cover it too. In this world, attention is currency. And FOMO is the mint.

None of this means FOMO is all bad. It has made certain markets more accessible. It has disrupted gatekeepers, empowered individual investors, and forced institutions to pay attention to voices they once ignored. But it has also made the economy feel like a game of musical chairs, fast, loud, and driven by the fear that when the music stops, you won’t have a seat. FOMO doesn’t just affect what we buy or invest in. It affects how we think about time, success, and even self-worth.

Glauber Contessoto, the Dogecoin millionaire, held onto his investment long after the price peaked. He believed it would rise again. It hasn’t. Most of his paper profits vanished. But that’s the thing about FOMO. It never tells you when to get in. It never tells you when to get out. It only tells you that you're missing something, something important, something everyone else already has. In the FOMO economy, the biggest risk isn't failure. It's being invisible.

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