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Beware Working on Your 401(k) Those Days You Feel Left Out

People who feel excluded take bigger financial risks.


Remember day trading? Despite bear markets and even a smidgen of regulation, sitting by yourself—even if it was in a room full of people—making quick decisions to buy or sell stocks online never went away. And it’s still pretty much fiscal solitaire. Is it possible that being a cyber-titan of finance is less a factor of unbridled avarice and more a factor of unrelieved loneliness?

Probably not, but new research just discussed at the American Psychological Association's annual meeting does suggest a link between social exclusion and financial risk taking. Three marketing professors in Hong Kong led by Rod Duclos wanted to extend existing work on the consumption patterns of those who bowl alone. Scholarship has suggested that people feeling on the outs spend their money on symbols of affiliation, whether it’s a new fashion favored by the "in" group, new taste sensations, or even favored illegal intoxicants.

Societal watchdogs should keep a wary eye on companies that may prey on people who are somewhat permanently on the social periphery.

They theorized that paying for all of these trappings of purchased popularity required some extra scratch: “in absence of social support, forlorn consumers will need significantly more money to secure what they need out of the social system.” One way to get rich quick is to gamble, whether at a green-felt table or while wearing a green eyeshade. In five experiments—four on undergrads at the University of Hong Kong and one in surveys of men and women in public—the researchers compared the subjects’ sense of social exclusion and their willingness to take a punt.

In the experiments with the undergrads, only one set was made to feel excluded. In all cases, the excluded students took greater financial chances, whether on a lottery, a digital wheel of chance, or a putative investment decision in the stock market. The stock experiment also included priming for some subjects that suggested money wouldn’t, in essence, buy happiness; the message must have stuck, because the excluded in that instance didn’t take more risks. Meanwhile, those who felt accepted were more risk averse.

While the pattern appeared across all five experiments, Duclos and his co-authors went to some pains to stress that feeling rejected was just one aspect of what goes into a financial decision, risky or otherwise. Plus, all exclusion isn’t created equal. Being ignored may be more pernicious, for example, than being kicked in the teeth.

Still, even if it’s not the only variable, since rejection does seem to play a role, they offer some suggestions—and some warnings. On one hand, the authors write, consumers might want to hold off on big decisions, whether overtly financial, like setting up a retirement plan, or costly in general, like buying a car after a break-up or falling out. (And no matter how much like Daft Punk you feel after the divorce, stay away from Vegas.) And societal watchdogs should keep a wary eye on companies that may prey on people who are somewhat permanently on the social periphery.

"Some marketers with questionable ethics may target demographic groups likely to suffer from social exclusion, such as the elderly, divorcees, and widows or widowers," Duclos was quoted in a release. "Others may be tempted to isolate, physically or psychologically, prospective clients during financial negotiations since doing so may result in larger commissions.”

Money isn’t the only thing we can chance. There’s also our lives, and the authors wonder if feeling excluded might foster some risky business there, too. Like when we’re alone—oh, so very alone—in our cars.

I’m sorry I was speeding officer, but you see, I don’t have any friends.