Another fear, and one I experienced during childhood, was fear of being judged. I grew up in one those households where if you brought home a 98, the only question that was asked was, “Did anybody get 100?” The 98 I got right wasn’t nearly as important as the two I got wrong.
Fear of being judged is a real thing and if we get judged and we’re judged harshly, that’s going to cause emotional pain or embarrassment. Most of us are afraid of emotional pain. “Wow, if I suffer emotional pain because I was judged harshly, I’m going to be embarrassed. People are going to know and then they’re going to abandon me. Gosh, I’m afraid. I don’t want to be abandoned.” Isn’t abandonment just another word for rejection?
If we get rejected and feel abandoned, what happens? We kind of clam up and we’re afraid to express our true feelings about things. We have a fear of becoming intimate. Letting people know our inner secrets. Letting people know who we really are and that’s a problem.
I’ve really learned that when you’re open, you’re not only open to giving, but you’re open to receiving. I kind of visualized it from the perspective of a little kid and they grab a toy and go, “Mine.” You ever see them do that? Mine! Mine! And, they hold it in. Well, the big problem with that is if you had another bag full of toys, they’re can’t get without letting go of what they have. They couldn’t take another toy. But if they have their arms open, they can get all that can be given to them and we’ve got to remember that too.
Another fear investors encounter is fear of the unknown. Not knowing what could happen is a very significant fear. A good story to illustrate is the one about the farmer’s daughter. Not THAT one about the farmer’s daughter. In this one, she is married to this fellow Hans and they live with her mom and dad on the farm. Hans is out hunting one day and the daughter comes home to find an ax stuck in the beam over the hearth. Right away she begins to fret.
What happens if Hans comes home and the ax loosens and falls? Hans could be hit on the head and killed. The young woman thinks of how she would be destitute. “I’d be desolate. I’d be lost without him,” she thinks.
With that, the girl’s mom comes in from milking the cow. She asks her daughter what is the matter. The daughter explains, “The ax is in the beam. Hans could come home from hunting, it could fall and hit him in the head and kill him and then where would we be? No food and I’d be all alone.”
The mother joins the daughter in her despair. The two of them are sitting there in front of the fireplace crying their eyes out when the father comes in from gathering the eggs. He asks the women what’s wrong and they tell him the story. “The ax, Hans could come home. It could fall. It could hit him in the head.” They’re so worried. They’re fretting over this whole thing.
Hans walks in 10 minutes later and sees the three of them there crying like lunatics. “What’s wrong? What is going on?” His wife tells him, “Darling, that ax is in the beam. You could go over by the hearth. It could fall out of the beam and hit you in the head and kill you. We’d be lost without you.”
Hans replies, “You people are sick,” and he grabs the ax and yanks it out and throws it in the corner.
Instead of taking action, they all worried about what might happen. Fear of the unknown paralyzed them. So many investors are like that goofy family. They worry about what might happen. Will I be a failure? Will I be a success? Will I be rejected? Will I be abandoned? Will I look foolish? God, don’t judge me because if you judge me and don’t like me, I’m going to feel bad, but what would happen if you did happen to be successful and you did make a ton of money and you changed your life. How bad would that be?
In Part 1, we looked at what causes fear. And in Part 3, we’ll examine what investors can do to overcome the “fear monster”.
In Part 2, we’ll take a look a fear of being judged, rejected, and abandoned. And in Part 3, we’ll examine what investors can do to overcome the “fear monster”.
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These are great, Augie. Thanks for sharing!
Excellent series and very real insight here. You’ve pin pointed some very real things that I’ve personally experienced and had to overcome and overcoming.
Very right! Everybody is afraid of rejection. No matter what it is as long as it hurt their feelings, that’s rejection, an abandonment. Nobody wants to be rejected especially when you are trying to win someone’s attention. Right?
When my husband and I are feeling uneasy about making an offer on another house, sometimes there is a good reason. Other times, it is simply fear of the unknown, as you mentioned. What is important is to recognize one from the other. Fear of the unknown can be overcome with a bit more information or knowledge about the situation. Napoleon Hill talks about this in Think and Grow Rich. It’s so true.
“Fear of the unknown can be overcome with a bit more information or knowledge about the situation.”
I couldn’t agree more Cathy. Fear of the unknown, in my opinion, is one of the biggest things holding people back from what they really want. Sure, there are plenty of uncertainties in life, but shouldn’t we be willing to take calculated risks instead of ‘tiptoeing our way to death’.
By the way, great example using Think and Grow Rich; a book I wholeheartedly believe should be read by everybody.
Once you become afraid of acting it is a difficult habit to break and sometimes is never broken at all.
I know what scares my Investors, the fear of making an investment and missing that 1 thing. That 1 thing that they missed that could end up costing them a lot of money. And for good reason too. I knew an Investor once that bought a house from the steps, naturally you can’t inspect the inside. So he did the best he could at peering through the windows.
Long story short, he won the auction, only to find out that flooring in the kitchen had horrible water damage to it and required a full replacement of sub-flooring, hard wood floors, cabinets that were near the baseboard, etc. Again, jsut something that he had NOT planned for that sucked about 50% of his profit margin out of the house.
It’s natural to care about your public image and I am not surprised that investors are scared by what people may think of them investing in certain publically scarred projects. I’ve personally experienced all the feelings you have mentioned in this series’, and in fact, I’ve had difficulties overcoming them.
I like your ‘parable’ about the axe – and have a name for things like that ‘Too much What If’. Unfortunately we get a lot of that these days especially via TV where so often any discussion involves a plus and a minus point of view that leaves you without any definitive conclusion.
But that said real estate investing requires a deal of caution because of the large dollar sum involved, the need to carefully inspect each property and the time it takes to transact.
Very good article. It was really hard to find investors/partners to start any business since the economic crisis had began but I think the people are already starting to open their wallets for new possibilities.
Good story. Grab the axe and stop crying.
I have the good fortune of not being too concerned with losses. They don’t bother me (haven’t been in the poor house yet though). I always have a more global vision and recognize I sustained the losses to earn the gains (fortunately gains are greater than losses). This optimism helps me not to be paralyzed from not taking action.
Due diligence is critical in any investment. The challenge for many people is that they never take action. The objective is to begin with the end in mind and follow the rules of sound investing. When you establish rules and don’t break them you mitigate a lot of potential problems.
Happy investing,
Augie