I was going home with my colleague Nataly yesterday and we were discussing how different generation of people behave. We have an easy tendency to assume this generation is different but if we observe closely, maybe each generation exhibit pretty similar views on things than we imagine.
When our brain matures may affect how we look at things more anything.
I wonder how many of you recall certain things that you mom or dad advise you to do or not to do when you were a teenager, that you brushed them off then, only to realize your mom and dad was right all along.
These thoughts hit me differently, since both my parents are not alive anymore.
Great advise feels very valuable, only in areas that you felt is very critical to you.
I think great advise should cost a lot just that it is hard for you to put down a value.
Sometimes I get very irritated when I see in a chat, or a piece of article, or a prospect saying: “We have so much financial information today at our grasp that we do not need to pay for advice!”
I get irritated probably its our business at work.
But I get more irritated because it is a poor take.
I would agree with you its difficult to put a price on advise. I would agree valuable advice that you can trust and positively impact your life is hard to find given our current advisory landscape.
In a way if I find that some have a poor take regarding the value of financial advice, then that may mean the mental model that forms that opinion is flawed.
Indirectly, you may end up losing money or incurring some cost, thinking you have the correct take on things. I attribute a lot to folks not being about to priced the true cost/return of advise correctly.
Maybe I can list out some example:
Some people can never invest one.
They can never get confident about it. Out of their $2 million net worth, they most likely put in $40,000 into something. They never put in more because, they never got even more convicted, never get pushed, and life was too busy. It ought to be that their $2 million could grow 5% p.a. over 15 years. $2 million should grow to $4.1 mil at that timeframe. Their $40,000 did well growing at 10% p.a. and ended up at $167k. But it is so much different from $4.1 mil. And we are not talking pushing the money in aggressive mode.
So how do you priced that?
If the difference in return is 0.8% p.a. and 5% p.a. should I charge you 2% p.a.? You still end up with more money 15 years later, although you will feel 2% p.a. is ‘expensive’.
Then there are those who thinks everything needs to push it.
Need to consume more info. More investment knowledge kind of equates to better wealth decisions and greater growth. And so they do that and then they ended 15 years later doing okay in numbers and similar performance with a certain benchmark index.
They might feel glad, they had fun because they interested in it.
But deep down, they reflected and realized they wasted so much time.
Not just time but also sleepless night wondering if they should go in today as the market is lower, or don’t missed out as the market is chionging up.
They just felt not present with life, because at that point, they NEEDED to do things like that because otherwise its poor management.
How would the older you charged the younger you if the older you would tell him it may not matter that much?
Then there are the really questionable takes that you could not process properly.
Let me list some of them:
- Not really processing the idea of topping up CPF, in all forms, especially for your own life situations.
- Mentally too focused on something very very safe such as the CPF OA, SA, CPF LIFE, and never developed a better understanding and appreciation of how to shepherd volatility and uncertainty to harvest higher returns.
- When someone says you should not invest in small caps, when USD devalues or should invest in biotech, or to have gold, you get worried enough (mostly because you think that this might be vital and it will be financially costly personally).
- Being scared shitless that investment-linked policy is rat poison because the fees are 2.5% p.a. and the funds have costly expense ratio. So much so that they surrender early, got nothing back and proceed to buy the same costly funds in a wrap structure. Mostly because they hear some seriously poor take on ILP cost (which the person most likely understand 20% of it).
- Listening to influencers that only buy during crash, then you set your mind to only buy during crash. Not realizing there is a whole host of emotional and mental struggles that you will still have to deal with.
All of them will materially result in difference in your mental state and also how much net wealth and income you will eventually have.
I would generally explain it as you or someone have formed a flawed mental model of how to build wealth, much further than the actual model, and you are paying dearly for it over time.
It is just that most struggled to trusted wealth advice with good execution.
If you spend your life looking for it, and appreciate the state you are in now, then you have to acknowledge that there will be times when you gain knowledge, conviction from someone.
And you may not end up paying a single cent. But that does not mean that advise is not valuable.
If Kyith spends time answering a very nuance investing, income or wealth building question for free through email or in Telegram chats, if that helps you add up A + B + C better, and you avoid future cost and reaped higher return, is that not valuable?
Maybe I am more irritated by people not being able to explain their actual thoughts well.
If you want to trade these stocks I mentioned, you can open an account with Interactive Brokers. Interactive Brokers is the leading low-cost and efficient broker I use and trust to invest & trade my holdings in Singapore, the United States, London Stock Exchange and Hong Kong Stock Exchange. They allow you to trade stocks, ETFs, options, futures, forex, bonds and funds worldwide from a single integrated account.
You can read more about my thoughts about Interactive Brokers in this Interactive Brokers Deep Dive Series, starting with how to create & fund your Interactive Brokers account easily.
Kyith is the Owner and Sole Writer behind Investment Moats. Readers tune in to Investment Moats to learn and build stronger, firmer wealth foundations, how to have a Passive investment strategy, know more about investing in REITs and the nuts and bolts of Active Investing.
Readers also follow Kyith to learn how to plan well for Financial Security and Financial Independence.
Kyith worked as an IT operations engineer from 2004 to 2019. Currently, he works as a Senior Solutions Specialist in Insurance Start-up Havend. All opinions on Investment Moats are his own and does not represent the views of Providend.
You can view Kyith’s current portfolio here, which uses his Free Google Stock Portfolio Tracker.
His investment broker of choice is Interactive Brokers, which allows him to invest in securities from different exchanges all over the world, at very low commission rates, without custodian fees, near spot currency rates.
You can read more about Kyith here.
