It’s only coming to a 3-year period, but my investing methodology and principles can hardly be called unsuccessful – at least, for now.
I was never particularly intelligent - but you can grind sports like you do investing, and I'm quite a grinder.
And eventually you face a point where investment skill and knowledge becomes a moral question.
Is it your responsibility to give back when you can?
Is it immoral to charge a fee for your service?
If you're on Seedly, it's not uncommon to get bombarded by the idea that even if you're a total beginner, you're highly competent already and fees should be cut out as often and as quickly as possible.
Incidentally, reality is different - to the point that this kind of question is even allowed to exist, where someone who takes free advice from online believes that re-balancing should keep his returns positive.
Even if you don't like my methods or principles - its very clear that information needs to be processed and filtered properly - and it can be in the form of successful investors giving back.
So when it comes to giving back, are there any moral considerations?
Kyith from Investmentmoats is my former idol (I have made no secret as to how much I admire his work, even though I’ve realized that we have significant personality clashes) and he wrote an excellent summary on some of these 'teachers' today.
I don’t actually disagree with this – like, it’s not going to be an evisceration, it’s not WRONG necessarily - but I’d like to offer my perspective on the matter.
Because even though I’m not as accomplished as Kyith in investing knowledge – even as a specialist - I am a consultant who works full time in the Finance World.
And not a lot of people know this as much as my Financial Advisory work, but I was actually a business consultant as well.
The entrepreneurs – including those who want to create such high-cost investing courses – I understand them.
So I'm going to address the following:
1) Why people run expensive investing courses and find time to do so if they are truly financial free
2) The purpose of Financial Education (my take)
3) The Right Way to Give Back (my take)
‘Why People Have Time to Run Expensive Investing Courses’
Let’s look at the premise that was provided – ‘If they are truly such successful active investors, they shouldn’t have time to run courses as well’.
Individuals would have difficulty juggling multiple things at once – but businesses are different.
Anyone who has run a business – and I say this from a professional standpoint – knows that you have to scale or die.
So if you’re very busy, what do you do?
You hire people.
Entrepreneurs are ideally drivers, not micro managers. If you want to build an empire, you can't do it alone.
‘If they are really financially free, they shouldn’t have to charge for their course/it should be cheap’
On Google, I typed in 'Why Free Education is - "
And the first hit, with 867 million results was 'Bad'.
It is. You could google a myriad of psychological tests that describe it to be so.
You could look up 'welfare state' or 'dependency'. You could even look up 'privilege'.
Anything that's valuable or worth having is worth having at a price.
If we look at how the majority of financial courses are conducted today, they usually have an extensive free preview - which is really a much more formal and professional extension of my service as a Financial Consultant, for example, where an appointment is non-obligatory.
It costs you nothing to see that the person pitching their style or course is highly competent.
It will cost you to engage their service.
And it should. Without there being a cost to their learning, people typically will opt to do other things. In fact, already with a cost to learning people will still typically opt to do other things - far worse if you gave it to them for free.
But why isn't it cheaper?
Well the market decides that, thankfully.
There aren't a lot of professional investing courses that can get away with charging beyond a certain point. There just isn't enough justification, results, reviews in the world to show that it was worth a price that another fella couldn't offer.
But that also means it's expensive because people are willing to pay for it. So it's something to think about - not unlike DnS's article on ticket-scalping.
It's not the best analogy - but if you don't want the price to be like that, don't be part of the demand.
Is Kyith Wrong?
I'm always wondered why Adam Khoo is promoting himself so much, especially if he was even half as good as he says he is.
I mean, if I were making like 30% annualized returns year on year, I would probably just quit working entirely (I wouldn't, my clients. Well not entirely...)
It's not like Kyith is actually wrong. But I would consider a couple of scenarios first. 1) Legacy: One of my favorite League of Legends players jumped back into the competitive world after 4 months of streaming. I was pleased, but I also thought it was stupid. As a streamer, he was making roughly double his competitive salary. But he wanted to give the trophy another shot.
But sometimes it's not about the money. It's about making a statement, or being remembered, or any of the other inane reasons we tend to operate on as humans.
2) Financial Freedom...?: We tend to think of Financial Freedom as rigid sometimes.
It's pretty simple - passive income covers liabilities/expenses, right? But when you retire, what used to be 8 hours at work a day is suddenly freed up.
And maybe you also realize you don't want to retire like how you lived as a worker.
And maybe you get a taste for some of the finer, more expensive things in life.
And your passive income suddenly isn't enough.
So you go from Financial Freedom right back to the rat race.
3) Work Addiction: I had a client whose father became extremely depressed after he was let go off, which confused the hell out of me.
He could have retired 2 decades ago with the money he had and the limited spending he did.
By that point, it's not even about as something dramatic as leaving a legacy or making a statement. It's simply the maintenance of an identity. As I progress along my career, it's something I begin to sympathize with quite well. The desire to be useful, to be respected, to have people (clients) depend on you. It's far more fulfilling than sitting around.
4) You're a sucker: You really are just being used by a sweet talking 'Financial Guru' and you're a sucker. But honestly, that's hard to pin down. Many courses require far more than literacy from you, which is why I'm going to talk next about...
...The Purpose of Financial Education
I believe the purpose of Financial Education is to allow Financial Consultants to transition from doctors into coaches.
Very few people are interested in listening to a Financial Consultant once they announce their profession, but the reality is that we’ve been handling tough financial issues from the time we entered this profession.
Because you can't make a sale with someone who has no cash flow.
a) People who are in moneylender debt
b) People who are no longer insurable
If the purpose of financial education is to promote the importance of insurance and investing to the young, Financial Consultants are already doing that.
We graciously accept your thanks.
(I’m kidding on the last sentence, don’t get mad. It’s true though.)
There are very extreme viewpoints on Financial Consultants, like myself. We are either amazing or horrible human beings - by no virtue but by profession alone. It is very odd.
What I would prefer is a world where Financial Literacy and it's resources are in abundance - not unlike Gyms and Nutrition. We are already moving towards that to some degree. You can do push ups at home and cook your own food for a cheap price. But planning that takes a lot of time, and you have to bank on your own discipline. Your knowledge is not the primary factor as to whether you get fit or not.
If you can do it, good for you.
If you can't - hiring a coach is more expensive, but the difference in result is very clear (at least, if you hire me).
So Financial Literacy gives people options, rather than falling into something where you can only choose to look for advice with what tends to be only a completely good or completely bad outcome.
The Right Way to Give Back
What is the right way to give back?
If there is righteousness in solving immediately financial problems or giving back in the form of financial classes that are cheaper - through volunteering or otherwise...
...I think there would be equal, potentially greater righteousness in charity.
I worked every weekend at the Woodlands Social Centre for 8 years up to the day I became a Consultant.
So I can say with some credibility that my yearly donation does much more for the place than my entire time there.
You might be thinking: What a classic, uncreative answer. For the same reason some people believe investing should be boring, whatever works tends to work well.
Elaborating on above - in my experience as a consultant, Financial Literacy means very little when it comes to becoming rich.
This is a fact.
I have clients who have skills close to par with me, and clients who have no literacy at all. I've met prospects who had plenty of money with no literacy and prospects who had plenty of literacy and no money.
The difference is not in knowledge. The difference is in execution.
That is why I have a job - because I practice execution 12 hours a day, 7 days a week, 28 days a month (not 30, because I need to do things like sleep).
If I had to place a higher value on giving back, it would be:
1) Sense of Responsibility - a desire to provide for oneself and the people around them
2) Discipline - the ability to stick with a plan that is given or created
3) Tenacity - the ability to work long, hard and smart
4) Delayed Gratification - the ability to delay gratification for a greater future good
5) Risk Management - the ability to assess risk, and take it on accordingly
Rather than give my own time, I would much rather continue to donate a significant portion of my resources - in the form of money, which is a representation of my labor and time - towards people who are trained to teach all of these things. In other words, social workers, teachers, and even parents with good intentions but little resources.
While I have a role to play to making my clients happy, comfortable and have a better quality of life, I think it makes much more sense to invest in people who are passionate about the other things outside of financial literacy.
I love investing deeply, because it holds a lot of similarities to sports. Good investing involves personal responsibility, discipline, teamwork and generally builds character. And if you can source out a stock, you can take the time out to source out these people to invest in.
They are in a far better position to give their time and expertise towards developing people for their future compared to you, unless you happen to have that time or are in that profession.
1) There's a lot of reasons why people do what they do, including investing courses.
2) Financial Education should be widespread to enhance, not eliminate, the financial industry and to create a far greater good for the consumer.
3) Financial Education means very little in the greater scheme of becoming wealthy, or simple comfortable. Values are a much greater factor.
4) Give back through your time, but I would encourage efficiency by giving back through your labor (money).
Besides, your money is valued far more by society as having taken concrete action towards your beliefs.
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