Tuesday, December 03, 2019
Why are you not rich yet ?
As we speak, a lot of financial bloggers are attaining the stage in their lives where they can live on dividend payouts. Sustaining this for a few more years may even allow them to live on 4% of their income. This means that they can decouple from the workforce and then deal with the messy issues of early retirement like how to craft a personal identity without a day job.
But many of these financial bloggers will not be RICH. This is because financial capital is only one component of a person's wealth.
Sociological studies in the UK define an elite as a class with three forms of capital - financial capital, social capital and cultural capital. People in the FIRE movement dedicate their entire lives into obtaining financial capital. Once you understand that society will reward capital more than labor, dedicating your waking hours to the accumulation of capital instead of climbing the corporate ladder for a higher salary can lead to winning the financial game. Sometimes in your mid-30s.
Social capital is much harder to attain.
The litmus test to determine the value of your social capital is this : If your child needs a job after graduation, do you have CEO friend that can help your kid get a decent head-start in life?
Most of us FIRE folks (myself included) may not be able to do that. I've known for a long time that FIRE has an affinity for introverts - you need to spend a lot of personal time decoding personal finance to "hermit" your way to financial independence. Social capital is the province of flaming extroverts - you need to get noticed and make powerful friends to accumulate that.
In my case, I have less social capital than my father. My friends largely belong to the professional caste while my dad made a lot friends when he delivered dog food to GCB owners in Nassim area in the 1980s. I'm not afraid to say that I grew up playing with Robert Kwok's descendents and attended high-end birthday parties. Now my own kids just hang out with kids who live in ECs (perfectly glad with this arrangement actually).
Cultural capital is even worse. Cultural capital is malleable and unstable across generations.
Last weekend U2 held two concerts in Singapore.
I don't hate U2 - I just think that Bono is not particularly talented and his music is the kind of emo trash rock that should not have become anthems for Generation X. But U2 attracted the large share of Gen X audiences last week with primary middle or upper class uncles as die-hard audiences. Gun and Roses have infinitely more talent, but I felt that their event was less of a watershed. (LAMC's fault perhaps )
You need to ask yourself why U2 has such cultural cachet but Modern Talking (my favourite 80s band) does not.
The answer lies in Pierre Bourdieus analysis of the rich. There comes a stage where wealthy people are so powerful, they begin to align with select cultural artifacts to distinguish themselves from the hoi polloi. These artifacts can become weaponized to exclude the poor.
It was never obvious to me when I was in IT but in Law, I recall a senior legal practitioner almost hectoring an associate to attend the Evita theatre production. This offended me greatly because an associate already is very time-starved and should just enjoy whatever she liked so I told her secretly that maybe she should just go to Jay Chou or K-POP concert, whatever she liked. Evita is going to be fucking boring.
Of course I did not win.To my personal disappointment, the associate told me that she did indeed spent one weekend watching the production. And she agreed with me that it was boring.
Modern talking will always be Ah Beng music.
In the eyes of a tired Gen X, U2 will always be cool.
Why is that so ? Because the really wealthy and middle classed folks co-opted that emo brand of rock music as their own. Then every Gen X who became affluent decided to step in line.
But the joke will ultimately be on them.
The future noveau affluent will not be my kids or their kids.
The folks who will determine the culture capital of the future are the same folks who appear in Singapore Social today, a series that I am binge watching right now.
It is these guys who will decide what music is hip, where the best alcohol joints are, and what kind of fashion will take hold in Singapore society.
So this answers why most readers of this blog are not rich yet.
They can master financial capital, but social capital is going to be a lot more challenging to accumulate. You might need to come from the Bukit Timah axis of schools to accumulate that.
From what I do know, no one in the financial blogosphere (including myself) is cool enough to dictate what music to like, what shows to watch, and what clothes to wear.
Otherwise, I will be able gather 1000 millionaires to buy enough Decathlon pants to turn it into our National costume for generations to come.