Bandung, IndonesiaSentinel.com — In recent years, the Fear of Missing Out (FOMO) has become a driving force behind investment trends among Indonesia’s Generation Z, posing a serious threat to young generation future finance. Fueled by social media and influencers promoting financial success stories, many young people are eager to jump on the investment bandwagon. However, this rush to invest without proper research has led to significant losses, particularly through illegal schemes that prey on inexperienced investors.
The FOMO mindset creates pressure to invest quickly, often without sufficient understanding of the market or the risks involved. For Indonesia’s Gen Z, this has resulted in impulsive investments in highly speculative assets like cryptocurrencies, stocks, and even illegal investment platforms. The promise of quick profits draws young investors, but they often overlook the volatility and risks.
A major consequence of FOMO investing is financial loss. Many Gen Z investors, influenced by success stories, fail to account for the potential downturns and market corrections that can wipe out savings. The focus on short-term gains, rather than long-term financial planning, also leads to poor decision-making, with many falling to illegal investment.
Loses Over Illegal Investment Schemes
In recent years, Indonesia saw a surge in cases of investment fraud, targeting young investors with promises of high returns. The Financial Services Authority of Indonesia (OJK) reported that illegal investment platforms swindled billions of rupiah from unsuspecting investors.
FOMO pushed many Indonesians, particularly younger generations, to flock to high-risk investments, often through unregulated platforms and illegal investments. One of the most notable cases was the “Robot Trading” scam. These automated trading systems promised substantial returns but ultimately lured thousands into fraudulent operations.
In 2022, OJK reported that illegal investment scams in Indonesia reached an unprecedented high, with total losses soaring to IDR 120 trillion (approximately USD $7.8 billion). This figure represents a staggering increase from the IDR 32 trillion (roughly USD $2.1 billion) in losses recorded between 2012 and 2021. The 2022 total marked the highest single-year loss due to fraudulent investments in over a decade.
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As FOMO can be a threat for the future finance of young generation, this trend must be managed properly. young people need to adopt a more informed and disciplined approach to investing for better financial future. There are several things that can help Gen Z invest wisely:
Do Thorough Research: Before making any investment, it’s essential to understand the asset, the market, and the associated risks. Reliable sources of information, such as registered financial advisors, can help provide insight into whether an investment is sound.
Avoid High-Risk, Get-Rich-Quick Schemes: Investments that promise unusually high returns in a short period are often too good to be true. It’s crucial to approach these opportunities with skepticism and look for red flags, such as a lack of regulatory approval or transparency.
Prioritize Long-Term Financial Goals: Rather than chasing short-term profits, young investors should focus on long-term financial security. This can be achieved by building a diversified portfolio that includes safer assets such as mutual funds, bonds, or index funds, which can grow steadily over time.
Use Regulated Platforms: The OJK maintains a list of licensed and regulated investment platforms in Indonesia. Sticking to these platforms can help investors avoid falling victim to fraudulent schemes.
Education and Financial Literacy: Increasing financial literacy is critical for young investors. Schools, universities, and online platforms offer resources on personal finance and investment strategies that can empower Gen Z to make informed decisions.
While FOMO is a powerful drive for Indonesia’s Gen Z investors, it has led to both impulsive decisions and financial losses, especially in the face of illegal investment schemes. With the right approach, Indonesia’s young generation can build wealth sustainably and responsibly to create better finance in the future.
(Raidi/Agung)
