Why Are We So Bad With Money?
Something interesting happened when I posted my last article. I didn’t expect it to be such a polarising post.
There were two groups of feedback. One group was fascinated by the results and asked me for more stock tips, while the other group chastised me for posting such a scammy-looking article, not believing that it was real.
This is a reflection of our society’s view towards investment or financial matters in general. Most people are either FOMO of all investment opportunities like the first group, or highly skeptical of investing like the second group.
If you were to pause and reflect upon it. This outcome is actually not surprising.
Imagine in an alternate world, we all live under the sea. In our daily lives, swimming is a key and survival skill.
If you excel at swimming, you will live a comfy life. You will be able to travel to places and experience many wonderful adventures in life.
However, if you are a less apt swimmer, you will be stuck in life. You can’t venture too far from your underwater dome. If you try to venture too far, you will most likely drown.
If you are the King of this underwater world, what would you do to help your citizens?
- You would ensure everyone learns how to swim when they are young.
- You might even make it compulsory subject in school since it is a survival skill.
- You might make it a national sport, and create competitions to spur innovation and excellence in swimming.
- You could also provide education to those who can’t swim yet, giving them the best chance to survive in this underwater world.
- ….. the list goes on
Afterall, you are a responsible King, you will do all you can to ensure the well-being of your people, right?
Now back into our real world. While we do not swim to survive, we need money to survive.
In our world, Personal Finance is the key and survival skill.
If you excel in managing your personal finance, you will live a comfy life. You will be able to travel to places and experience many wonderful adventures in life.
However if you are less apt in managing your personal finance, you will be stuck in life. You will live from hand to mouth. You can’t venture too far in your wealth. If you try to venture beyond personal finance and try investing, you will most likely drown.
This comparison may be a little stretch but I hope see the similarity.
Managing your personal finance is such an important skill, yet:
- We do not make sure everyone learns about their personal finance when they are young. Most people are left to figure out on their own.
- Personal finance is not even taught in school, let alone making it a compulsory subject in school.
- Very few government initiatives about encouraging learning and excellence in personal finance.
- In fact, when come to discussing finance matters, it is almost seen as a taboo or boring. Try talking about it at family gatherings.
Yet, we expect everyone to be responsible for their personal finance and know how to manage their own money from the very first paycheck. Talking about unreasonable expectations.
Don’t expect it when they don’t have it
Anon
In the end, people are left to figure out on their own. They try to learn how to manage their own money without any help. While some of them make it, most fail to do it well and drown in debt and poverty.
Even those who seemingly know how to manage their own money, would fumble when they try to invest their money. It is not uncommon to see news of people losing millions to scams despite repeated warnings. And these victims are often working professionals with tertiary education. In short, they are not stupid.
Why is this happening? Because all these experiences either made them desperate or left a poor taste in their mouth.
Those who are drowning in debt and poverty. They wish to find the magical solution to solve all these financial problems. They flock to get-rich-quick schemes like moth to a flame even when these schemes seem so obviously fraudulent. Why? While they might notice some signs of fraud, deep down in their heart, they really wish for it to be true. Hope is a powerful force.
Those who somehow learn to manage their personal finance on their own and accumulate some wealth. They become very skeptical of investing. They are “war veterans” of managing their own money. They have been burnt by frauds before and retreat from investing totally. They view investing as wealth destruction rather than wealth accumulation. They do not differentiate between investing and gambling.
Once bitten, twice shy
Anon
This is the reason why I am so passionate about what I do. Coaching people about managing their personal finance and being an educated investor.
Every individual, who do not learn about managing their personal finance and investing, is another case of financial “drowning”.
I hope our society will one day better prepare the common folks for personal finance and investing. Till that day come, I shall continue to do what I do.
See you soon!
Investing Always,
Pete
