Sunday, January 28, 2018

Why are female experts on personal finance so fierce ?

[ I need to make a disclaimer at this stage, while it might seem that person we are referring to is Budget Babe, the conversation is not triggered by her. So don't go trolling her because you read this article ! ]

This started as a personal conversation between a very popular finance blogger ( who will never be named here ) and myself.  He suddenly asked me "How come they are so fierce?" referring to the new wave of Millenial women who are emerging as experts in personal finance and cryptocurrency.

At that moment, I was unable to come up with a decent answer but I thought perhaps a full-blown article over the weekend will be able to address the question in a better way.

I think for a start let's arrange financial knowledge into a hierarchy. This hierarchy does not attempt to say which stage of development is better but which stage requires more reading up and learning about the markets. Some people who function at lower levels can still become rich by excelling in their businesses and climbing the corporate ladder.

Here is my proposed hierarchy :

At level 0, you are working for a living, setting aside money in cash and and spending whenever your bank account reaches a threshold number on a big holiday or a car. This is the level of Buddhist Youths, Hikkikomori and some EDMW BBFAs.

At level 1, you receive some advice from a so-called "financial advisor" so you have some insurance but you are mainly invested in commissions-heavy ILPs. To get rich, you mainly rely on the appreciation in your property. Most professionals who are not finance savvy fall into this category.

At level 2, you start to discover that there is a stock market but you do not have the time to do proper due diligence. You stick to mainly to ETFs. In the past, this level belongs to unit trusts but I think the era of the unit trust is over in Singapore.  Millenials are lucky because, at this level, it is fairly easy to use a Robo-advisor and rely on that to build a decent portfolio for themselves.

At level 3, you start to have itchy fingers and start to trade. Without a proper financial education, the lowest hanging fruit is via technical analysis because many expert trainers claim that they can divine the future by reading charts. Being impatient, you also look for ways to bet on penny stocks which have a more satisfying payoff. At this stage, discussions on options trading and derivatives come online as you may be attracted to some trainers who offer instant riches with their personalised approach to wealth accumulation.

At level 4 and above is where the rewards of study and patience kick in. You start to see stocks as underlying businesses and try to link the macro-economy to your investment performance. You start to look at stocks in the STI index.

Beyond level 4 is where all the individual quirks of financial bloggers kick in. Some of us rely on quantitative measures, other aggressively comb the news and attain thought leadership by sheer knowledge of the underlying cryptocurrencies they are buying ( which is a fascinating topic I hope to address formally next week. )

Now back to the question : Why are female financial experts so fierce ?

Simple, they get a lot of shit from guys in personal finance who outnumber them maybe 20-to-1.

Many of these women have decent careers and know a fair bit on investing and may have gone beyond level 4 in my model, but the dating world is full of guys who are at a much lower level.

Real life is no MMORPG, you can't put a mouse cursor over a date and know how much financial knowledge she has. Imagine going on a date where a BBFA keeps harping about the performance of his ETFs and why he is either already rich or will attain financial independence in about 10 years. Worse, he is some kind of future Warren Buffett with his astute ability to read tea leaves and pick the best penny stocks in the markets.

If the woman has already reached a higher level of development, why should she tolerate these testosterone driven boasts ?

Women in the financial internet space are developing new ways to tell guys to fuck off !

So, I think women need to be more assertive in the world of personal finance.

In fact, in our blogger gatherings, we still experience a severe gender imbalance in our gatherings. If we can double our female attendance in 2018, I foresee that a revolution will take place and we will be able to get the same kind of star power that is enjoyed by lifestyle bloggers and influencers.

Investors are human beings as well, they don't want to keep seeing a sausage party every year.

And perhaps the next time the government wants a Budget discussion, they will get folks who really know a thing or two about budgeting and how to really react to a 1-2% increase in GST.












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