The Biggest Lie We Have Been Telling Ourselves

raining money

06 Jan The Biggest Lie We Have Been Telling Ourselves

In my first article of 2016, I would like to make a confession.

We have been so very wrong all this while, and I would like to come clean once and for all. The realization came out of the blue last week. It was both heart wrenching and empowering.

Heart wrenching because I suddenly realise how fundamentally misplaced I have been this past couple of years. I feel like a kid coming of age and suddenly realising that Santa Claus does not actually exist.

On the other hand, it is empowering because being aware and accepting of this new norm allows us to start off on a brand new slate.

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First, some background.

I started writing for BigFatPurse.com in 2012. Alvin roped me in to share my ideas with the audience. His brief to me was simple – Write anything. Write from the heart.

On the blog, we shared our personal money experiences. There are a good many articles about trading and investing, about properties and insurance and entrepreneurship. Other than ourselves, we have also gotten the man (woman) in the street to step forward to share their stories. I also write quite a fair bit about psychology and the money mindset.

We try to address Singaporean’s money woes. We try to speak the hearts and minds of the man in the street. And at the core of that is the problem of having not enough money.

This problem is very real. We work hard, but real wages have not kept up. HDB prices have doubled over the previous decade. The cost of education is rising. So too is healthcare.

We aspire to have more. Not only that, here at BigFatPurse, we aspire to help more people have more.

We are proponents of investing in a basket of stocks via an ETF. Alvin wrote a book on the Permanent Portfolio, a low volatility instrument to invest in. We organised talks on how to avoid scams. We interviewed good folks. We run the Value Investing Mastery Course. We even got the biggest financial bloggers in Singapore to sit down at their keyboards to write about how they would invest their first $20k. The free ebook is available here for download.

We thought that by bringing up the level of financial literacy in Singapore, we will be able to help Singaporeans make better money decisions and hence, make more money.

We do all these because we want to help solve Singaporean’s biggest problem – Money Not Enough.

The Confession.

All of a sudden, I have come to realise that everything I have believed about not having enough money is totally untrue.

On the contrary, the biggest problem many Singaporeans face is the exact opposite. It is not about not having enough money. It is about having way too much money!

Screen shot 2016-01-05 at PM 11.14.06

 

Before you start pelting eggs and heckling me off the stage, let me explain why.

If we do not have enough money, we will be thinking of how to take on another job to make more. And not about investing – which stock to buy, when to buy and how to allocate the capital efficiently. We would not bat an eyelid when the latest hottest stock tip falls onto our lap from our mother-in-law’s cousin’s uncle. Precisely because we have too much.

If we do not have enough money, we would be worrying about our next meal tomorrow. And not about whether to buy Life or Term insurance and leaving enough for our children in the next decades. Precisely because we have too much.

If we do not have enough money, we would be worrying about the next installment or even the rental on our HDB flat. And not how much of a loan to take and how much to pay down to optimise the interest on the loan, and definitely not about whether we consider our HDB flat an asset or not. Precisely because we have too much.

If we do not have enough money, the last thing we would be doing is reading BigFatPurse. Precisely because we have too much.

The Most Painful Problem

Do not get me wrong. I am neither understating nor undermining the problem at hand. The problem of having too much money is a first world problem. It is very real. It is also very painful.

If you are a retail investor with 20k (or 200k, or 2mil) of hard earned money in the pocket, finding the right use of that money is something that can keep you awake at night.

Should we save it, spend it or invest it?

Saving it is the safest option. Or is it?

Unfortunately as we all would know, the safest place is often the most dangerous. The threat of inflation and the value of money eroding is real. Our money will end up buying lesser and lesser each day. We might be better off spending the money right now. We will be getting more bang for our buck.

Spending it is the happiest option. Or is it?

According to Maslow’s Hierarchy of Needs, Safety forms the base, just above Physiological needs. In ancient times it could mean a solid cave perched high up in the mountainside easily defensible against wild animals and other human enemies. In modern capitalistic society it would mean having unlimited resources (i.e. money) to fall back on. Spending the money makes us happy for a moment, but we might be better off investing the money to make it work harder for us.

Investing and growing our money is the most prudent option. Or is it?

According to statistics from CPF Board, almost 9 out of 10 retail investors lose money. We all know from personal experience that this is indeed the case. Funds underperform. Property prices seem to be going nowhere and with interest rates rising, the market outlook does not look all too rosy.

Investing is dangerous because it is all too easy to blow up the capital with one bad move. What if we were to buy a stock/house/some gold today and the prices were to fall through the floor tomorrow? Perhaps it is better to hang on and wait for just that little bit more? Perhaps we would be better off keeping the money safe in Fixed Deposits.

So then, should we save it, spend it or invest it?

Money Too Much.

No one in the world would admit that they have too much money. Ask anyone and they would say that money is never enough.

I hope by now I have managed to convince you that there are two distinct sets of money pains. The pain of not having enough, and that of having too much and not knowing what to do with it. Between these two sets, I believe that the vast majority, if not every single one of you reading article is plagued by the latter and not the former.

The sooner we come to be aware and accepting of this cardinal rule, the sooner we stop lying to ourselves, the sooner we will be able to make peace with money.

My realisation has allowed me to see that the problem is not about not having enough, but rather about what to do with what we already have. I hope you see it that way too.

In Conclusion

Dear BigFatPurse reader.

You are here because you are confused about the financial markets and the baffling products out there. You could be a skeptic, somewhat untrusting of the industry at large.

You are here because you want to find timely information about the financial markets from an unbiased, independent voice.

You are here because you believe that an investment in knowledge pays the best interest. You are here because you are want to take money matters into your own hands.

You are here because you have a problem. A problem of too much money.

Let this be a conversation. Let this be a conversation about having too much money. Let’s get the conversation going!

image: dcinno



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7 Comments
  • Tacomob
    Posted at 18:07h, 06 January Reply

    Bravo Jon. I love your confession. It is so true. I too feel that it is so much harder than we think to realize when we have enough. Your post is a timely wake-up call at the beginning of this new year.
    To be happy with our financial situation we all have to find our own ‘level of enoughism’. A big challenge, because as the poet William Blake quipped “You never know what is enough, unless you know what is more than enough.”
    To give myself orientation in that eternal challenge I remind myself of the Buddhist Proverb “Enough is a feast. Enough is abundance.” and this certainly does not apply to money alone.

  • xeo
    Posted at 20:05h, 06 January Reply

    I think it is the issue of wanting something bigger, better and more BLING than our neighbors that many Singaporeans are feeling poor and unhappy. That probably explains why as one of the richest country on the planet, Singaporeans are one of the most unhappy people in the world.

    • Jon
      Posted at 23:49h, 06 January Reply

      Xeo, the issue is a global one. The rural farmer with one cow will also be jealous of his neighbour with two. It is human nature.

      What makes it more pronounced in Singapore is blatant materialism. If you want more extreme instances look no further than up north to middle country.

      Let’s drink a toast to all the happy people we surround ourselves with next week. Speak soon!

  • RB35
    Posted at 20:08h, 06 January Reply

    Great post! Too much money can indeed be an issue. I do think the more pertinent underlying philosophical issue is Man needing to make himself feel useful, that is the art of self actualization, which sure enough, is a first world problem, but still an extremely relevant one.

    • Jon
      Posted at 23:56h, 06 January Reply

      Thanks RB35. Well said. First world problems indeed!

  • john brewer
    Posted at 07:30h, 17 May Reply

    Interesting viewpoint! It does point out how many people know how how to be responsible at the level they live. Having more or wanting more means you must match your desires and status with more responsibility and knowledge. Most are simply not prepared to manage success and take life for granted. . This is why there are fewer people at the top . You should know what is required to achieve your goals and if you are not willing or unable to meet this requirement then change your goals. Financial success does not mean happiness.

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