Bucking The Herd Mentality

Herd mentality
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Bucking The Herd Mentality

A herd is typically a large group of animals that travel and migrate together. Often times you see elk, deer, and bison move in big herds across the western plains of the USA, while you might see elephants or zebras moving in a herd in South Africa. Herds naturally group together for safety and they seem to move together as a result of planning or coordination. However, research has shown that individuals in a herd often have their own agency and independence and their adherence to the herd is done out of imitation or as a response to external pressures. Thus we get the term herd mentality, which refers to the tendency for humans to form social groups or respond to social pressure in the same manner as their peers, rather than acting with agency for themselves. One of the major problems with herd mentality is that it can make a bad situation worse, leading to stock market crashes and riots. Furthermore, herd mentality doesn’t necessarily protect individuals from predators, or we would never see videos of lions chasing down gazelles among their pack in crisp HD video. Some aspects of herd mentality have been beneficial to us, such as the tendency to form societies and the resulting wealth and safety. However, herd mentality can also get us too deep into a broken system, just because people think “this is the way it’s always been done.”

Herd Mentality and Finances

Conventional financial wisdom is a herd mentality that has led more people to poverty than many are willing to admit. When you consider the stock market, herd behavior among humans plays out directly in the rise and fall of the market shares. When investors get greedy, a bubble forms and when investors get scared, a crash happens, but neither really relies on anything other than emotional response. Some people with a lot of wealth to spare might chase a rising stock, only to see it fall, but easily recover their losses somewhere else. However, most of us do not have the time or the finances to follow the herd as the market rises and falls. What ends up happening is a lot like being the middle fish in a giant school of fish: you never get to decide for yourself where you will go and you are restricted to the movement that those around you are making. You might imagine that you are swimming in the right direction and, even though you can’t see anything, you might assume that this is the natural order of things. You might even assure the ones around you that look to your advice that this is a perfectly normal direction to go in…until you swim into a net.

Millions of families have lost their life savings and subsequently their jobs, cars and housing following the direction of the herd during the great recession. And when you try to question that mentality, people are often reticent to question their choices and more likely to stick with the pack. After all, there is safety in these numbers right? Yet herd mentality is what causes animals to race to their deaths and humans are not above that same tendency. Therein lies the problem with showing people a different way to grow their wealth and achieve financial freedom. The desire to be accepted, to be safe with the herd, and to follow the pack is so strong that people will literally follow the herd right down to their detrimental end.

How To Break Free From The Herd

Of course, as in the wild, any individual has the agency to split off from the herd as they hurtle toward their ultimate doom and to carve their own path. In terms of financial wisdom and literacy, this is the most fool-proof way to buck the herd mentality and guarantee you don’t become a victim of the mistakes those around you are making. But how do you do it? What financial vehicle will you use?

R. Nelson Nash proposed the perfect system and we’re big proponents of it here at Factum Financial. It’s called the Infinite Banking Concept (IBC). Here is a short video explaining what IBC is and what it is not:

If you’re ready to break away from the herd mentality that has millions of people hurtling towards their own financial demise when the market inevitably crashes again, then the Infinite Banking Concept is your vehicle to safety. Factum Financial’s team of experienced Wealth Strategists are ready to help you break away today. Contact our team at 480-525-8180 to speak to a strategist today.