Those who have been following the news can imagine what might happen next. All thanks to a message from an influencer, spooked folks will try to withdraw money from a financial platform but will see withdrawals delayed. Financial advisors will strike at this point, trying to spin this as a bank run triggered by influencers, pushing regulators to tighten the rules.
In the end, even small-time bloggers like me would have to stay in touch with regulators, all because everyone lets the wrong financial ideas stay rent-free in their heads.
This article is about wrong ideas. It attempts to expand on a previous article about ideas that are too true to be good (link).
a) High-yield savings products
Any savings product yields higher than Singapore Savings Bonds, which is currently pegged at 2.83% for the first year, so you should not spend time rent-free in your head.
We've learnt that high-yield savings products may either lack protection under SDIC or cause you to lose liquidity temporarily due to withdrawal delays. Still, we've known that for many other offerings, the higher returns can be nerfed or come with conditions that involve buying insurance or unit trust from banks.
The issue arises if we spend much time obsessing over these products. Sometimes, returns cannot match the inflation rate, and oftentimes rates are unsustainable. It takes up a lot of energy to track different options, and opening accounts just to park your money for a small gain can be a waste of time.
b) Better "miles systems" or more efficient credit cards
Another thing that baffles me is that there is so much effort spent on converting credit card utilization into point systems that influencers who track these incentive programs have such a strong following in Singapore.
This is funny because to generate these points, you need to spend money first, and behaving more frugally will result in much more money in your pocket than those miles that you earn. I've been on the same VISA classic card since I graduated from university, and it works fine. It gives me a $20 popular voucher every six months.
Life should not be this dramatic.
c) What is an influencer's net worth or recent dividend payout
Some folks use their blog to track their net worth or dividends. That's fine and good. I even have to share details of my previous years' annual dividends and net worth during my previews. But readers get excited when someone makes their first million or gets a massive monthly dividend payout.
The problem with gawking at someone's figures is pointless unless that person has an actual plan on how to get there (like me), or by sheer coincidence, you have the same background and advantages that guy has.
You should be focused on your net worth instead.
There are a lot more ideas that institutions want to squeeze into your head, such as information on products that mix insurance and investments. Financial advisors or maybe an influencer might want to play the expert on "bonus units" for ILPs when we know that the entire product line is questionable if we can educate ourselves to invest our money in the markets.
Ultimately, the folks pulling the strings are the institutions that sponsor the influencers and give the FAs commissions to distribute these marketing messages. The wise thing to do is to realise that if these marketing messages succeed, only by buying the shares of these institutions will earn a dividend for savvy investors.
In a future article, I will share the financial ideas that you should have in your head.
They even pay rent.
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