After Action Review : Unstructured sharing session with young people.

There is good news that banks are changing their engagement strategy with Millenials. They are moving away from the hard sell strategies that turned off an entire generation of consumers in the past and are now experimenting with alternative approaches of engagement that focuses on having more candour and authenticity with the public.

As part of this experiment, sometimes financial bloggers are brought in to engage with younger consumers. This is a very new thing and I am honoured to be chosen for this experiment. 

Yesterday's sharing session would have been rather challenging if not for my stint in Law School where I spent most of my time cracking legal problems with youngsters. Nevertheless it exposes some really interesting questions that I was not really prepared for. The participants are mostly beginners, so his article might be useful to rookies.

a) How do you deal with fear that before you invest in markets ?

This question threw me overboard. I can answer questions on how to deal with interest rates and survivorship bias but I started investing a very long ago and forgot that people do feel afraid when they start investing. Furthermore, my own personal answer is not satisfying. I started with unit trusts and refused to buy an actual stock until I passed CFA III. I also know that surrendering your financial future to a commissioned sales agent is really bad idea. 

My only solution is to deal with it one step at a time : Open a brokerage account. Buy the Philips Lion S-REIT and wait for the first round of dividends to come. See if you lose sleep over this investment. When you are ready again, start buying the top 15 highest yielding blue chips on the STI. 

Get used to having dividends drip into bank account because it will provide a buffer against fear at a later stage.

Dividends are the opiates of the capitalist class. Dividends conquer fear.

b) What happens when a spender marries another spender ?

Millenials are particularly interested in relationships. Obviously, I spent quite a bit of time talking about Family Law and Divorce. 

I explained to the crowd that I was lucky because I am a Saver who married another Saver but most couples are Saver-Spender couples and need to establish some ground rules on money management. Often the Saver would have to rein in the Spender within the relationship.

So one guys asked me a question as to what Spender-Spender couples can do about money ?

My answer may be considered both unhelpful and politically incorrect. I told the person to let the couple be because investors need most of the population to consume in order to continue to collect rents and dividends from their investments. 

Why stop a happy couple who living life to the fullest ?  I also told them that I can introduce a great divorce lawyer if the marriage fails.

Let me know if you have a better answer than me. 

c) Can people live a such a disciplined lifestyle to achieve early retirement as I did ?

The short answer to this question is "no".  Because there is an entire industry devoted to "assist" folks who, for some reason or another, do not wish exert their control over money. 

Money has a bias. If you are extroverted, conscientious and disagreeable, you'll find that making money is a lot easier in a Capitalist economy. This also means that agreeable and likeable folks will try to stop you from attaining your ambitions in favour of "greater harmony amongst equals". Over the years, I keep getting asked why can't I conform to others : work hard, travel every year, buy a lot of insurance, get a BTO at a younger age and pay expensive tuition for your kids.

I've been living this life for more than a decade. 

• After my first appearance in Me and Money, people mocked me for being single and a scrooge. 
• My second appearance after my wedding drew criticisms because I did not have to raise any kids. 
• At least one publisher laughed at my books because I was not a millionaire then. 
• When I used a Nokia handphone reinforced with rubber bands to keep the battery casing on, colleagues found the whole thing amusing.  
• Using a SAF notebook to track my daily expenses, that's insane ! 
• Losing a BMW in the stock market in 2008 was something folks laughed at at the depths of the recession, they became incredulous when I continued to farm my entire pay-check into high yielding counters. 

If you play the game of life to win, people are going to talk. You play a lot of Euro games like Settlers of Catan, you know that the guy with the highest Victory points will get maximum grief from everyone else on the gaming table and this is supposed to be a "fun" setting. ( In Catan, people send a robber your way when you are ahead )

They will continue to resist you.

So it's more than discipline. Picking up finance skills requires discipline. 

But dealing with "well-meaning" folks who want to shoehorn you into a conventional Singaporean lifestyle requires discipline and being extremely disagreeable. 

Anyway, yesterday's session has been fun. It's a new market and I welcome this refreshing turn towards more authentic engagement by our bigger financial institutions in Singapore.

[ The picture in this article is related to a pretty bad Hokkien Joke I cracked with the participants during dinner. ]