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Backstage reality: how to avoid falling prey to the rock star trap

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There is an old saying in the music business: "You can make a killing, you just can't make a living."

This could be said of many perceived "glamour" industries, but exploring the psychological drivers behind why so many people in these industries get trapped in poor economic situations sheds a light on an irrational decision-making bias that we are all susceptible to.

It exists because of a gap between the self we present to others and the real self we are fearful of others knowing about - I call it the "rock star trap".

rock star trap

Working as a gigging muso in the grunge and electronica movements of the '90s, I?constantly saw a gap between how successful fans, friends and family perceived a local rock star to be and how successful they actually were - financially, that is.

Local rock stars came to identify strongly with their glamour and influence and so would spend in ways that would support the myth of their success.

Interestingly, as their careers started to decline and their earnings dwindled, you would often see them spending more on luxuries to bolster the perception of their success.

The fear was that if people knew the reality of their situation they would lose their social standing and influence.

Being seen to be successful became more important than actually being successful.

There was a perceptual gap between the "self" they were presenting to the world and their real "self".

The bigger the gap, the bigger the fear, the bigger the spending, widening the gap. It's is a destructive loop that can dramatically impact our financial and mental health.

This behaviour is not only found in areas of enterprise (particularly in the start-up and finance industries); we also see this in our everyday social lives.

We can find ourselves spending more on cars, housing, wine, events and clothes so that we can look good to our peers or people we aspire to be our peers.

Now, there is nothing wrong with buying nice things and or with being aspirational - the problem comes when we spend to hide our financial reality or to feed our sense of self-worth.

The reason we behave like this stems from two deeply rooted psychological drivers related to our survival instinct: a strong desire to win and a deep fear of being ostracised.

When we are winning we feel strong and more likely to survive than others who are weak.

But how do we know we are winning? We compare ourselves with others, of course, and if others on the surface seem to be doing better than us then we feel as if we are losing.

That is why people spend more on a small house in a reputationally affluent suburb rather than a more beautiful, practical or larger house in a suburb with a lesser reputation.

We like to think of ourselves as above average - winning when compared with others.

Of course, simply living in Western society puts us well above average on a global scale, but we don't see that every day, so we discount that from our mental equation.

The challenge is to compare yourself today with who you were yesterday - if you are better today than you were yesterday then you are winning. Case closed.

Don't fall prey to the rock star trap. Don't be fearful of your current reality; embrace it and you will find it's the best foundation to grow a strong and prosperous future.

What you can do to avoid being caught

Talk openly and honestly about your finances to your partner or a trusted mentor. Being secretive of financial realities you're ashamed of never leads to positive outcomes. You don't need to broadcast it to the world but being financially transparent with someone you love and respect breaks a host of psychological traps. Don't tie your self-worth to your financial worth.

Celebrate value. When you buy something that represents great value for money, celebrate it with your friends and social circles. Make the pursuit of value the game rather than simply buying something because you can.

Ask yourself, "What is the worst thing that could happen?" This helps negate the fear of loss associated with the rock star trap. Visualising the worst possible outcomes helps you realise that even in the worst scenario everything will be OK.

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Phil Slade is a behavioural economist and psychologist for Suncorp. He works across digital innovation, strategy, cognitive bias and human-centred design, with a key focus on delivering new and improved customer experiences, and has more than 15 years' experience.
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