This post continued from previous post.
Learn to invest in shares?
Ads of courses to be rich instantly
In recent years I almost devoted most of my free time into learning more about finance and investment. Then I realised that there are many ads from course owners advocating the learning of investing from them so that we can be financially freed fast and retire really early in the 30s or even 20s of age. Very often you can see these course owners showing their face in front of sports car, bungalow or showing holiday trips with slogans like:
"How I retire before 30 from investing” or “How I generate massive passive income from my investment portfolio” or “How I generate built my 7-figure portfolio in a few years” etc.
It is just so captivating isn't it? You just hope to be like one of them too right! Who need that stupid job waking up early and coming home late with disrupted train services? You wish you can throw that resignation letter right into the face of your stupid boss?
On a milder side, there are inspiring bloggers displaying their portfolio or some shouting aloud their unverified huge dividend income. Some have hidden agenda, some is due to man ego, but for some, their aim is definitely NOT to brag about their success, but just to keep track on their own progress learning to be better. This is not wrong and I respect the latter few bloggers.
The problem arises when ignorant readers, as there always will be, follow blindly and reckon that this is the only way they can become rich! They then use investment as an escape from work and devote all their time studying investment instead of concentrating on developing their earning ability when young. Sounds familiar?
You may not know! Your idol “Warren Buffett” (not mine) actually has remarkable earning ability even at a young age. He is a successful entrepreneur already in his teens, not yet a successful investor then. Otherwise how to build a portfolio big enough to generate the income? Read: To be a Successful Investor, Start Earning First – The Warren Buffett Story
Rolf’s view today
This is going to be quite direct and a little hurtful!
Many of you can throw stones at me, but I just want to share my honest views. Reality hurts in the short term and some of you may be angry after reading the following. However sometimes it can really offer good reflections for us to have deep thoughts. Hopefully it can make a difference in your lives in the long term and create a better future for Singapore as a nation. I do not need your money from this blog, but if this article one day does improve your life, I will be extremely thankful and ecstatic to receive just your email. :-)
Frugality is the reason!
After being in the financial blogosphere for a while, I concluded that most of the wealth created by the so-called "successful bloggers” online were almost out of FRUGALITY, i.e. incredible saving prowess or mainly reduced expenses from being single or small family to feed, rather than them being really apt in earning money out of the stock market. So be honest, it is still and "earnings" from a job or business giving that bigger effect rather than the actual investment return. I call this “savings compounded portfolio”!
Undeniably, having good investment knowledge help to grow our wealth portfolio faster, but it requires tonnes of hard work in reading and understanding, plenty of patience, and exceptional ability to control your own emotions by learning more about yourself, learning philosophy, history etc. We ought to recognise that successful investment indeed can be “Turtle” and “Boring”.
That is why you have these two very good Bloggers “Turtle Investor – Kevin” and “Boring Investor – Lee Chin Wai”. You can also read articles from veteran bloggers like “Bully the Bear”, “CW8888”, “SMOL” and new blogger like “Tacomob” etc. What they wrote may be able to equip you with the necessary foundation to do well in investment later in a more sustainable manner, rather than the “so call” tips of what to buy and be rich instantly.
Impressive analytical skills, but why not earn a living out of it!
Ok, you do have to give thumbs up to the “long and impressive analytical skills” displayed online from some bloggers. I also find it really useful. Yet, sometimes they are just as good as the analyst reports that I received daily from my brokers. Analyst have access to the companies and more data although they may have favouritism towards their companies. Hmmm... maybe this is why you choose to read from bloggers who have a more balanced views. Really?
While not the same, but same same lar!
Also one is working fulltime for the bank and being paid and the other one is working part-time for him/herself without being paid. It is the facts in that article that matters, not their viewpoints of buy or sell! Readers need to do the filtering. Hence the analysis from professional Analysts and Bloggers are in fact similar in nature.
Sometimes I wonder isn’t then better to quit the day job and be a full time analyst. It is like killing two birds with one stone – stop working in that stupid job, and find an analyst job that you can do analysis from 8am to 5pm and STILL earn, and then at night you can have more time doing the things you want or like? Well, the problem: “It is too late for me to change career at this age?” Hehe…..Really for some of the younger ones without family or just starting family? Then we said "I want to be financially freed early, so that I can do my own things and have my own free time? Contradicting isn't it?
Where did the initial funds come from?
We as readers also need to ponder where in the first place the hundreds of thousands of portfolio came from? Is it entirely compounded wealth starting from just meagre thousands of portfolio or is it already started from day 1, a bucket of gold made out from real estate boom or a gift from their wealthy parents, or if it is just “hard-earn money” from down to earth working in a day job?
With all due respect, the writer is never at fault and I often respect their devotion and unselfishness in sharing all the good information. Kudos!!! The biggest problem lies with the followers! Yes – you, the readers! Sorry folks, if you get burnt yourself, you deserve it! Do not blame the bloggers!
Master Trainer – Seriously?
Then there are those who go attend courses to learn about investment in the hope of becoming rich fast. While I am one of those in the early stage too attending courses, it is not for reason of becoming rich fast, since way before that I was already invested in the market. Instead it was because I always want to learn more about finance, after already being equipped with Engineering and Business skills via my education and career. Furthermore I need a new hobby then, because I was forced to forsake another hobby due to an accident. Attending courses for beginner is extremely important and I encourage that, because it can help us organise our thoughts much better.
However we need to be mindful in overzealously idolising the trainer as investor guru. As I understood from reliable sources, most trainers STILL need income from their courses to finance their own personal expenses and their own investment portfolio. Hence, remember this, unless the course master do not need your money for their own bread and butter expenses, usually they are just businessman rather than the mistaken visionary investor. Sorry for being frank, but this is the truth! If they are so good, they should just start their own fund and “compound growth like mad” and compete against the best performing funds in the world. Do Singapore proud and not only advertise your 7-figure portfolio to earn money from the poor middle-class, who yearn to be rich each and everyday!
That said, there are still course trainers I respected, because of their passion, knowledge and down to earth attitude. Ignore that so called 7-figure portfolio you were shown for a second, focus on the trainer’s attitude and his knowledge. It is not difficult to tell who will be the right mentor/trainer just from their faces and the way they talk Open your eyes and mind, do not be obscured by the self-proclaimed instant success. My blogger friend, SMOL, Jared called them “koyo” snake oil sellers!
One good course trainer I like is Alvin of Big Fat Purse, although I have yet to attend his course!
Do not be mistaken, I am not saying that learning to invest from bloggers or trainers are no good! I am just saying that we should respect them out of their KNOWLEDGE and SHOULD NOT idolise them blindly for the size of their portfolio or passive income. Worst of all, readers should never long for the tips on which stocks to invest. As for the bloggers, especially those who are really popular, I reckon we should also be matured enough or at least uphold the responsibility of not to mislead the readers.
Just put your money in Fixed Deposit
Stock market movements can be huge in times of crisis. For e.g. during the GFC, portfolio can be slashed by as much as 50%. And if you cannot stomach the huge paper losses, it is better for you not to stay invested. As I mentioned in my earlier posts hereheresickness and longevity can be related to our emotions/characters especially in the stock market. Not everyone can stomach the fact to see tens or hundreds of thousands wiped off! Even on the lips many will say no problem (ego!), but deep down many will still feel painful. It can then also translate to worries and illness even without you knowing sometimes.
So why pursue for that every few % extra dividend and later lose your capital and even lose your health? Why don’t just put the money in Fixed Deposit or Singapore Savings Bonds!
Maybe it is also due to human nature of inherent GREED deriving from all the vibes of people trumpeting how you can get GUARANTEED or INSTANT wealth from the stock market?
My greatest reward of learning investment
For me, learning investing/financial markets is one of the best things that happened to me in recent years.
It did not make me very rich for god sake! Huh…why so stupid, you may ask? Learn investment is to make money mah…many will say!
To me, this is so mainstream, hence you cannot be rich if you are mainstream!
Above being rich, learning investments widens my perspectives on the various types of businesses. It also intrigued me to study about the world economy which often gives me a bigger picture view in my life. Yes Warren Buffett does not care about the world economy and only focus on individual business because he is already one of the richest. I care because I am not as rich and have kids still at a young age!
From learning investment, I also drill deep down into HISTORY relating to all the Wars, Great Depression and the entire Global Monetary System of yesterday and today. And because the further you look into the past, the further you can see the future, this provides me with the ability to plan more prudently ahead of the rest. Via learning investment, I also get to know MEDITATION and give me a calmer mind when things go rough. My TEMPERAMENT improved also. All these led me to becoming a BETTER PERSON and I am sure thereafter over LONG TERM, I will be rewarded in my investment portfolio as well.
To conclude, learning investment equipped me with knowledge to do well not just in stock market but in career and life as well. And learning from the right mentor is important. For beginner, it is ok to learn from master trainers/bloggers. However once you pass that stage, you can possibly learn so much more from books or youtube from the “True renowned visionary investors” instead! And normally these true greats are NOT so MAINSTREAM! They go against the crowd to reap the best results.
Sorry guys, it is still not the end…there is going to be a “Part 3” on “The Fallacy of How to be Rich from investing in PROPERTY due to my long windedness in this article. I will also discuss in Part 3, in my opinion the “Truth to Real Richness!” in life.
Stay tuned and best of luck in your investment journey. Cheers!