Panicking when it comes to making financial decisions is one of the biggest problems we are facing in the world today and unfortunately, these things end up becoming a crisis for citizens of different countries. The aftermath of this problem usually doesn't end well, panicking while making financial decisions have made people take the wrong steps and get terrible outcome.
Many times, I have seen people with little understanding condemning the need for a financial advisor and I always believed that they don't the importance of a person who is always available to help to look at the positive and negative effects of the financial decision you are about to make.
Earlier this year, the new naira note was forced on the citizens of Nigeria. To enable the circulation of the new notes, the government set a time limit for which the old note can be returned to the banks.
The majority of the citizens panicked and without thinking, people trooped into the banks to deposit the cash they had which resulted in the scarcity of money in the country. The aftermath of returning money to the bank was disastrous and unfortunately, we don't learn our lessons still.
During the presidential inauguration of the 29th of May 2023, the newly elected president made a statement about the petroleum subsidy and the same thing we saw during the cash scarcity began immediately after the announcement was made.
People started rushing with gallons to stock up on petroleum in their houses just in case things get messy. The gas stations took advantage of the panic and decided to hoard their petrol and under 24hrs, people bought a litre of petrol for 80 cents in my environment yesterday.
Even without a subsidy, petrol shouldn't be as expensive as that but the panic has made people unreasonable and they have decided to make some business owners richer at the detriment of their financial well-being. If Nigerians choose to be calm and pretend like nothing is happening, even though there will be an increase in gas prices, it won't be as expensive as this and we won't have to queue all day just to get petrol.
Aside from these illustrations mentioned above, there are many wrong financial decisions we are making with panic just because of uncertainty. The fear of what we don't know would make us take a wrong step that eventually cost us a lot.
In the past year, there was a rumour that the government would build a road in a particular area and it would require the demolition of some houses. People began to sell their land so they won't be at the losing end, some people took time to do research and bought lands in that same place at a cheaper rate after confirming that it was a rumour.
The common effect of financial panic is that a few people will get rich while ×100 of them will get poorer.
Not everyone can employ a financial advisor, not every financial decision requires a financial advisor. Many times, we just have to sit, think, make research before making that decision.
Where do I stand if make this decision, the losing or winning end?
How would this decision affect me?
In a case where a rumour is responsible for people's financial panic, ask yourself. Is the information genuine?.
There are a lot of questions we can ask ourselves that would put us in the right sense of what to do. It doesn't end with cash, we see lots of financial panic in the crypto verse as well.
A lot of people end up regretting that they sold their coin just because of a rumour or something. There are times we just have to make some critical financial decisions but it doesn't have to be about us panicking.
Panicking while making financial decisions most time does not end well and it's high time we do away with the habit. It might look like a tough thing to be but it is the right thing.
