Scrutiny of the Public

Throughout our road of career and personal development, we run into many who will attempt to drag us down, stand in our way, and/or doubt our abilities. The scrutiny of the public is one of the greatest achilles heels to financial prosperity- especially in the world of finance. Left and right we run into those who think they are our Dad and their logic superior- especially in financial institutions. This is where many were only losers who got money from Mom and Dad for a university degree(s), but only sufficed enough ambition and open-mindedness to be glorified salespeople as they lacked the attitude to manage and grow their own money successfully.

Beginner Economics and Finance teaches us the principle of no risk, no return. The average person is very risk averse- uncomfortable with volatility, debt, and narrow-minded and short-sighted to differentiate between speculation and investing. This is the main reason many publicly available funds or other investment avenues fail to produce high returns, as money managers must submit to the demands of the public purchasing the funds. Most people are also afraid of being looked down upon- such as saying they owe x dollars, as debt is seen as a general evil. Nevertheless, with today’s low interest rates, there are numerous opportunities to beat them even with minimal risk.

Many university-educated individuals shun risk takers, in belief due to their education and experience, that they are God’s gift with a crystal ball in the financial world seeing its “truth and doom”. Some of the shunning is out of jealousy and bitterness, knowing that they could never bear the risk themselves to get further ahead- and for this reason, they are stuck in their cookie-cutter banking/analyst salary jobs, being written a modest salary dictated by their superiors that might grow slowly over many years as risk takers exceed their earning power many times over. Some bankers are downright illogical, even being glorified salespeople who are horrified at the idea of risk and debt, though their income is partly dependent on successful sales of financial product. The local CIBC branch to me is a perfect example, where the manager will look at you like as if she just saw a ghost.

Educated and experienced financial individuals also believe their rationale is automatically superior to yours. Like fitness and dating consultants, they will take great extremes to tell you you are wrong and they are right:

Pay down your mortgage first.

Get a stable salary job, especially a government one. Be safe. Don’t ever start your own business. You might just fail and lose all your money.

Put all your spare cash into a savings account.

Don’t touch stocks, they are risky and go up and down.

Pay down all your debts first.

Don’t work in commodity-tied industries. Don’t work in a job where you are worried about the price of oil. Just take a shitty wage and be happy you’re working all the time.

Aim for postive cashflow in real estate. Pay mortgages down to artificially produce a positive cashflow situation.

And, some of them will live to see you fail, so they can get a self-pat in the back of reassurance that they are God’s gift and supposingly always right.

Most people are afraid to deny others, and be looked in denial themselves. Most people want social acceptance. Most people don’t want to be the guy/woman at a dinner table saying they owe banks all this money. It sounds nicer to say you have everything paid off. It sounds nicer to say you have 3 houses and a Ferrari paid with cash than a million dollars worth of profitable stocks.

It initially sounds nicer to say your condo has appreciated $30,000, than that your stocks dropped $20,000 now and then later will rise by $60,000.

It initially sounds nicer to say you went to university for 5 years and ended up in an analyst job making $50,000/year, than dropping out in Year 4, starting your own business, losing money in Year 5 and then listening to dozens of people shun you for taking the risk and you should had stayed in school and just saved all your pocket change. But then you turn around and make $100,000+/year by Year 6 and laugh at them.

It initially sounds nicer to say you have $50,000 in the savings account that will grow by 2% a year, than borrowing $100,000 and turning it into $200,000 4 years later.

Often, it’s just easier to roll your eyes to a critic and let the results speak for themselves years later.

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