Do you ever wonder why it is that people all tend to do what others are doing and how it can be impacting how you live day to day?

Well, I came across a video last week which I think sums it up pretty damn well – it’s only a few minutes and I highly encourage you to watch it, as it really answered a lot of things for me.

The long and the short of that video is that people want to “fit in”. That means that the majority of people will do the same thing that everyone else is doing just so that they’re not different. You might be thinking – so what, how does that even matter, and why am I talking about it at all?

Well, I think it plays such a big role in who we are and how we operate that it’s worth taking a look at. This type of phenomenon doesn’t just impact people in a waiting room, it impacts on everything we do, whether we are conscious of it or not.

I know with my own life, i’ve been in plenty of situations where something will happen, or someone will say something that clearly needs to be challenged. What normally happens is that everyone just goes along with the flow unless someone else is willing to speak up and make a point of it, then all of a sudden everyone else jumps on the bandwagon.

Now you might be thinking – what’s this got to do with finances Glen – don’t you run a personal finance site?

Well, if we look at the global financial crisis of 07/08, do you think social conformity played a very big part in the events of what unfolded? If you don’t, then please take the time to watch a movie called “the big short“. The movie doesn’t necessarily focus on social conformity as a specific point, but when you look at some of the interactions throughout the movie as an example – the real estate agents and brokers, with the whole mentality of “if others are doing it then it’s must be all good”, it’s just plain scary to see how easily people conform without even thinking about the consequences of their actions – more disturbing is that this type of stuff happens in real life every day.

Let’s bring it a bit closer to home – look at your own finances. You probably have money in the bank, a mortgage or rental property, shares in a company or some other type of investment. Ask yourself why you decided to make those decisions with your money, did you do it because you researched it really well and this was the best option, or did you hear from someone else that they were making money by doing this and you thought – hey I’ll give it a go too?

All I’m trying to say is that social conformity can play out in many different ways, and for the most part you probably aren’t even aware that it’s happening, or the unconscious basis that can result from it. So be yourself and do what you think is right, not just what the herd does. If you need more proof of why this is a good idea, check out the video of dangerous conformity below.