Sunday, February 7, 2010

Manage your own money yourself

The safest person to trust with your money is yourself. Yet, most of us choose to delegate the task of looking after our money to strangers. That's strange, when you come to think about it.

Most people I know do not love their jobs. Most do it for the sake of money. If we spend half of our waking hours slogging at a job which we do not like for $$$, then shouldn't we at least spend 10% of our remaining spare time learning how to manage it?

One reads about tragic cases of retirees who lost a big portion of their life savings in toxic investments in the financial crisis of 2008 - the most notable one in Asia being the Lehman Brothers Minibonds. During the heights of the Minibonds crisis in Singapore and Hong Kong, Tan Kin Lian's blog became my daily reading. In one of the comments to his blog, a Phd holder humbly admits that she and her spouse possess 2 Phds between them. Yet, they were duped into the toxic. These are people much smarter than me and the average man. If they had spend more time learning how to manage their money, they probably could have avoided it.

There are countless silent instances of retirees losing a big chunk of their life savings after enduring a lifetime on a job they dislike. It pains me when the victims are the elderly retirees who no longer have means to recover from the financial setback. They could easily have been my parents.

The reason so many people, including the conservative ones, got caught was that these structured financial products (Lehman Brothers Minibonds, DBS High notes) were sold by financial institutions they thought they could trust. While the banks were clearly in the wrong, it is not beneficial for the victims to put the blame entirely on them, however justified. As these events involve heavy losses, they offer valuable money lessons that are too expensive to waste. Don't waste the school fees by putting all the blame on the banks. To learn from something requires one to accept some amount of blame first. Of course, this is easier said than done as I was not a victim. I am sorry if you have been a victim of fraud.

Banks are supposed to be guardians of the people's hard-earned savings. Even if they cannot be trusted, they are still regulated by the monetary authorities. How could this happen? The immediate reaction is to blame dishonest bankers, incompetent regulators ... everyone else except ourselves. First and foremost, it is our duty to take care of our own money ourselves. The best person to trust with your own money is yourself.

This is my maiden post. I would like to attract like-minded people to share their ideas and experiences on this blog to help everyone, including myself, help themselves with their own money.


  1. Money can be a personal thing for some people; that's why they don't let others handle it. It makes sense because their money is a product of their own blood, sweat, and tears, so it's only right for them to see where each cent goes. If you want to manage your finances yourself, try to figure out how the experts do it.

  2. Hi,i would like to know what kind of style would you play as a first start off with small capital like your case 10k.

    Do you think it wise to do a long term investing? or like what you did speculate to raise fund first?
    is there any other style that suit a newbie?

  3. Recently a lot of articles have appeared about people who suffered from money swindlers. Very often victims are the same people as we. Such things happen, because people belief that someone else understands money stuff better than you. It happens from time to time to all of us, and very often we don’t know how to protect ourselves from fraud behavior. We can meet such people in the street, banks, shops… while applying for online loans in financial emergency. For any of several reasons, we allow other people decide how to use our money. People dare to believe that someone else is capable to understand our financial situation better, than ourselves.