[Update 2] Are you your parents' financial photocopy?

My folks, I think, did Ok for themselves. Not the best financial planners but boy did they have the lifestyle. I would attribute property investing as half the income that supported their lifestyle. So it has always been in my mind, investing is a MUST!

Over the course of the last 6years (that I seriously explore and use financial tools), I realized some differences that financially educated (For convenience, "FE") and uneducated ("FU" no pun intended) parents pass on to their kids. I'll bet that's where many of us got our first financial guidance from. If one's parents was financially educated, they would pass on sound knowledge. Vice versa. So, how financially smart are your parents? Should you be unlearning some of the wrong stuff and open to new ones?

Some real-life examples I came across:

FU teaches: "Don't trust other people with your money. Or trust only yourself with your money."
This is a half-truth statement and many people follow! May I ask, How great a progress are you going to make alone? Heard of the phrase No man is an island?
FE: Dare to trust. Be sharp about the company you keep and always use a contract to protect your interest.

FU teaches: "Want to be successful in life, learn how to depend on yourself."
It is great to instill independence and doing your best from a young age. But being strong alone is insufficient; against the weight of the world no one man has enough strength. Again, No man is an island.

FE: So yes, be independent and excel, and align with other successful people, who compliment and strengthens you, to function as a team. Leverage on/ and off each other to make greater progress.

FU teaches: "Don't let others steal your ideas. Keep it to yourself. Don't share freely."
What good is an idea not materialized? There are many brilliant people out there keeping their brilliance to themselves. How does keeping your idea to yourself make you rich?
FE: Share your ideas, only then can you progress and improve. Get the right people on-board to help you materialize your ideas.

FU teaches: "Work hard, spend less and save your money."
Seriously doesn't that sound like something people who are tight for money would tell you?
FE: Work smart, plan on what you can afford to spend and how you can spend more. Learn how to be creative and invest your money.

FU teaches: "Save your money for retirement. Enjoy life when retired."
Isn't that pretty sad? To enjoy life only nearing one's end?
The truth is most people succumb to temptation and enjoy as soon as possible anyway. Rake huge bills from their lifestyle expenses, which leads to them being caught in a vicious cycle. Yes?
FE: While working, start investing. No capital, be creative & learn how to leverage. Attain financial freedom as young/soon as possible. Then enjoy life.

FU teaches: "Investing is risky. Best to leave your money alone."
Investments does carry risk. But given what is happening in the world today, down the road we are going to see serious demand/supply issues and great inflation problems. Dual middle income households alone might no longer be enough onwards. With the free and easy stimulus and inability to rein in stimulus, Currency itself is at risk. Not investing is a bad idea.
FE: Investing carries risk but is necessary. Currency is overly diluted.

Lastly,
FU (And many financial institutions, FI aka Financial idiots) teaches: "High returns = High risks"
This is as far from the truth as it gets. Put an untrained driver at the wheel of a car, the vehicle is a danger to all. Change the driver to a skilled professional, he can drive on two wheels and still make you feel at ease.
FE: Being financial uneducated = High risk

Added on 14 Jun 2010 (& I am shocked to have to add this!),
FU teaches: "Savings."
Until today, as in RIGHT NOW, people are STILL talking about how much they have saved. OMG! http://forums.salary.sg/investments-net-worth/817-whats-your-net-worth.html You work really hard, make your life all stressful and tiring, scrimp and save for your money to sit in your savings account (or under the pillow) to do... what??
FE: Investments - Capital gains and Cashflow

Until next time.

Your Fellow Investor,

Martin Sim

Previous Updates

1 Taking retirement into your own hands

Article "How should trusts be managed?" The Straits Times Monday, May 17 2010 Page B22 Money section

De-constructing Finance

Hi Ladies & Gents,

Recently, listened to a Private Banker talk about de-constructing financial/ banking products like structured deposits, dual-currencies investments, capital guaranteed funds, CDOs, Unit-trust, Forex tools, Equities, Options, Loans, Insurance, proper money management and much more... He covers every financial product out there and breaks them down along the way for your understanding. The good, the bad and the dirty secrets your banker and insurance guys don't tell you.

For more than 10yrs, this chap was managing a fund size of S$168mil for the uber-rich. Claims to have an epiphany after seeing all the old people pouring out their woes at the speaker's corner after losing their pants. Maybe he really has a heart?

Anyway, from my interaction with him, needless to say, he knows his products really well. It's not everyday you get to tap on the knowledge of a private banker.

And at just S$688 for 3 full days?!

Finalized dates are on 19, 20 & 27 June 9-5pm

Go flip the newspapers, normally a 2.5day course the 'Gurus' are charging anywhere from S$3000+ to 5000. Some of which you should stay away from! At S$688 this chap is really trying to do charity. Rental alone would be a bomb. & Staffing? Think he earned too much from the people who are financially uneducated that got slaughtered, trying to give back to society now.

My opinion; really sound knowledge and before he comes out of his Jerry Maguire moment, sign on and make friends to continuously tap on his brains!

I wished he set this up 4years ago, save me many literal headaches & heartaches. Those interested email back. I don't earn a penny from typing all these. Do take the opportunity to get some financial education as this affects your lives! You don't have to speculate or invest afterwards. Just open your eyes to what's going on in the world today.

Your Fellow Investor,

Martin Sim

PS: Here's one tip I was stunned to learn:

Did you know if you rollover amount on your credit card your bank is charging you 24% on the full amount on the bill for that month and not on the outstanding that you have rollover?

Free plucking of my interests. Sharing knowledge from investors.

Property Investors Club

Equities Investors Network