I don't have much to say this week as I spent half my weekend stuck in traffic heading towards my brother-in-law's wedding on Saturday. The other half was spent catching up on readings after missing a lecture on Saturday this week. I did squeeze in some retail therapy just now picking up some books on Kindle and a new armoured Batman action figure.My daughter asks me why I still buy toys for myself but not her uncles on her mother's side. I tell her that I'm still a kid like her.
I don't have a very heavy article today. Instead I will build on something by BigFatPurse on lifestyles of some of the top financial gurus in Cyberspace.
In this article BFP compares the different approaches between two gurus and asks the reader to choose which one they prefer. Mr.Mustache seems to be more popular among financial bloggers because of his down-to-earth background and focus on frugality. Ramit probably has more mass market appeal as he not particularly big on frugality and wants his followers to go for big wins.
I want to appeal to readers that personal finance is both an art and a science. Some elements of investing can be very precise and run off complicated analytics but often you need to draw upon your knowledge of world economy and political science when making buy and sell decisions, as such it's not profitable to see the world as a binary between two finance gurus.
When you analyse Mr. Mustache, frugality is really the art and science of keeping your expenses low. It's only half of the equation of getting money to invest into markets to generate your dividends. The other half provided by Ramit is about expanding your revenue and top-line.
Both ideas are fundamental to producing savings to be pumped into the markets. The other local finance gurus like Kyith of Investment Moats and AK71 are crucial reads as they provide some direction as to how to maximise your investment returns.
Recently, I've been contemplating a new book as I am working with WDA ( very tentative right now ) to give a talk on financing a child's university education in July and I have to update the model I proposed in Sowing the Seeds of Prosperity.
My older model revolves Earning, Saving, Investing, Protecting and Gifting your capital.
This older model may need some overhauling in that Learning has become serious enough to warrant a write-up on its own. IT innovations have started destroying the careers of knowledge workers and the literature is turning towards lifelong learning but right now there is no rigorous science behind picking up skills to survive a future where an algorithm can be written to defeat the greatest Go Champions of the world.
( It utterly fascinates me how software in the US is destroying legal careers. But that is another posting after I am done with the literature reviews. )
Some piece of management literature focus on empathy as the next big thing but books promoting right-brained creativity, emotional intelligence and design thinking have been written for the past decade and we are not seeing a lot of gains in salaries for people who focus primarily on soft skills ( Are English majors expecting a raise anytime soon ? ). Instead, most gains are made by world-class technocrats who take the time to develop some soft skills to make themselves more accessible to normal people.
With Learning as a cornerstone of my personal finance framework, I have to provide space for the best teachers ( the likes of Scott young and Cal Newport ) to be put on the same pedestal as the best investing gurus.
This means finding space for contradictory ideas to exist by creating an accommodating framework in future writings.