What is Investing Addiction?

what is investing addiction

The are many really positive things that come with investing, no matter where you choose to put your money. It's a great way to build wealth through passive income, meaning you don't have to keep trading your time for money. However, your investments should be a way of enhancing your life and give you the freedoms and time to enjoy it more fully. It's true that you have to put forth some time and attention to stay on top of your investments, but if you're spending so much time obsessing over your bottom line that you're not going out and enjoying the finer things life has to offer, it might be time to take a step back.

The medical and psychiatric community has worked hard to uncover the roots of addiction and their efforts have paid off in both symptom recognition and treatment. Regardless of whether the addiction involves substances, some behaviors that may be harmless (and even beneficial) for most, may cause destructive actions and results in others.

Not long ago, the psychiatric community added gambling addiction to its list of mental disorders in the DSM (Diagnostic and Statistical Manual for Mental Disorders). While investing addiction hasn’t been named yet, it’s similar in symptoms and behavior to a gambling problem. Neuroscientists have found that the primary driver behind this type of addiction is the search for reward.

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What is Investing Addiction?


  • Tunnel vision. The person tends to focus on one type of trading almost exclusively, disregarding any opportunities for diversifying the portfolio. The addicted investor may disregard other investment avenues that show just as much strong concrete potential for gains in the near future. More often than not, the trading occurs online.
  • The high. When the activity pays off a dividend or the stock shoots upward, the reaction that may seem out of proportion to the gains. The high associated with winning is often what keeps the addictive person coming back for more. Unfortunately, they have to raise the bar to maintain the same sense of intensity over time.
  • Obsessive-compulsive activity. Devoting too much time to trading may become the activity that dominates their free time. It’s hard for the addicted person to conceive of doing anything else. They may use excuses, whether reasonable or not, to continue their behavior in search of the next win.
  • Denial. It’s hard enough to be honest with oneself, and someone who is trying to cover up a behavior will exercise denial before admitting to a problem. When confronted, he may not be willing to discuss the issue and may become impatient, indifferent, or use blaming tactics.
  • Relationship problems. Ultimately, the behaviors will take a toll on personal relationships. With a single-minded focus and obsessive behavior in play, it’s hard for the addicted investor to give much attention to the day-to-day activities that families and relationships require.

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How to Avoid or Cope With Addictive Investing Behavior

The most successful path to avoiding or breaking this type of behavior is to indulge in other behaviors that offer a reward or payoff that don’t involve substances or money. The first step is to admit there’s a problem, and the second is to break the habit by:

  • Exercising. Instead of sitting most of their waking hours, many recovering addicts find exercise rewarding on many levels. Physical activity stimulates the brain by releasing adrenaline and the feel-good hormone dopamine, which is the same chemical associated with the high that investing sometimes gives.
  • Trying support groups. Gamblers Anonymous is an organization based on a 12-step program that may be helpful. Ultimately, gambling and investing rely on the same risk-taking behaviors, and there are likely to be like-minded others at these meetings.
  • Getting social. While the internet has become much more social because of sharing platforms like Facebook and Twitter, it’s no substitute for actual time and experiences with others. Joining a group with similar interests, whether investment, hobby, social, or professional, will provide a much-needed diversion in the real world.
  • Get help. Of course, if you find that you're having a difficult time creating new, healthier habits, and your addictive behavior is affecting your life in a negative way it might be time to seek help from a counselor or therapist.

In the end, balance is the key to achieving a more rewarding life. Sitting in front of a computer or glued to a smart phone for hours on end might not provide the expected financial gains. The downsides might be personal isolation, financial problems and some degree of physical distress.

Talk to one of our investment specialists to learn how JWB can help you earn truly passive income through long term real estate investing. JWB does the work for you, so you can focus on living your life.

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