Saturday, November 07, 2020

Different Personalities in FIRE


The idea of this article started when I having a shit. 

I was using the Coursera iPad app and attending lectures on Digital Marketing by the University of Illinois and wondering to myself what excuses other 40-somethings have when it comes to reskilling and Skills Future when you can actually attend university lectures and even complete some quizzes which taking a crap in the toilet. This led to other crazier ideas, like whether someone can actually debug a computer program or compose legal documents while making some brownies in the outhouse.

The book Surrounded by Idiots by Thomas Erikson added an extra dimension to my thought experiments. For years, I have heard of a personality profiling system called DISC but no literature was accessible in the bookstores. This book was the first one that brought this simple personality profiling system into popular business non-fiction medium.

I suppose from the DISC personality profile, people who attend university lectures while taking a shit can be pigeon-holed into folks with the "Dominant" personality. Folks who are Dominant or those with a Red personality are also the same kinds of people who will wonder why other people are so inefficient and will not consider writing computer code or even make submissions to the court while bombing Hiroshima in the privy.

But maybe this blog should not be fixated with the topic of shit, let's leave that to some forums with commissioned financial advisors and instead focus on how the DISC personality profile can be applied to FIRE. 

a) Dominant - Red personalities

A secondary reason I joined the public sector was that they are willing to water thousands of tax-payers dollars on profiling the personality of civil servants. My friends knew I was Dominant but no one could figure out my secondary mode, so I eagerly jumped at volunteering to coordinate a vendor to test my department. I was sorely disappointed to find out that my secondary mode - was also Dominant! This led to the conclusion that working for the government is really bad for my mental health. 

Not all Reds get to lead in organizations. We just end up getting frustrated at the navel-gazing, inertia, and cheap talk in most organizations. Ultimately Red's strength is that thought and action are the same things. This is also their biggest weakness in FIRE.

One of the things I had to acknowledge even after concluding my FIRE journey is that regardless of my 5-digit monthly investment income, I will always somehow do better by exerting my effort to make more money. Some simple truths are obvious, labour is cheap and amenable to leverage at a more profitable rate in a serious pandemic - hence my joining of the SMU startup incubator in the search for interns.

On the other hand, I still have some really bad Red habits when investing in the markets, many which I am happy to admit but will not teach my students because rookies cannot afford to be so cavalier about investment research:

  • Generally, I prefer to buy the stock before I start my research on it.
  • Also, I hate long drawn discussions on details like the WALE of REITs, the profile of REIT lending preferring to "spray and pray" a REIT sector which I expect to out-perform. I favour broader statistical odds of a portfolio of 10-15 stocks. I currently have 60-70 stocks and I can't track them all.    
  • I really hate long-drawn arguments about safe withdrawal rates, I prefer to aggressively attack the problem head-on. One Python program is one page long and takes half a day to write, maybe another day to host on the cloud.  If there's a weakness in my methodology, I debug and amend in 20 minutes tops. Then everyone in my community can figure this out on their own with my tool.
In summary, I can move very fast but can be a disaster where the details matter. 

This is the primary reason why I actually fear becoming a real lawyer. One tiny clause can get me into trouble with a client. I spent my training contract worrying over comma placements and documentation.

I suspect Reds will not like FIRE that much because they may prefer to run their own companies. FIRE also involves a degree of number crunching that reds may not have the patience for. My initial attraction to FIRE was because I was competitive and thought an additional income can put me silently ahead of my savvier colleagues even if they get promoted earlier than me. 

b) Influence - Yellow

Yellow personalities are eternal optimists and the best salesmen in the group. They are often the most popular folks in any click. You can identify the Yellow guy when the Hokkien Peng calls him "Siao eh ! Ho bo? " My best buddy is Yellow and I suspect yours is as well. Yellow is often extremely eloquent and persuasive.  

Unfortunately, pathological versions of Yellow can be exasperating for Reds like me. They can't keep to time and, when they start talking, you will not be able to get a word in. Worse, hardly any conclusion can by when a group of Yellows come together to make a decision. Extreme Yellow personalities are least likely to able to maintain their attention span in an investment class and even if they spend thousands on it, would not have the discipline to carry out FIRE. 

I had a quintessential Yellow friend who was well-loved by everyone but his personal life was a thick mess because he attracted a lot of drama. He passed away some time ago because he could not maintain his medical regime. We miss him a lot today, but we have to admit what a train wreck his personal life was.

Yellows probably make better investment trainers than Reds because of their charisma and personality, but this may not be in the investment realm because investment requires a basic level of numeracy and discipline. If I scale my business, I will ensure that I maintain my syllabus and hire a Yellow to conduct the lessons. 

Students probably will enjoy the classes until they realise that the instructor has money problems of his own.

c) Compliance - Blue

Holy shit, Blue guys can be intimidating because many end up being my customers and fans. Where Yellow is all about the Oral, Blue is all about the Anal. 

If you want to audit someone, hire a blue. If you want audit matters resolved, hire a red. 

Make no mistake, Blue is the color of FIRE. If someone FIREs early, my bet is that he is primarily blue. 

Blue guys are natural accountants. I teach Factor investing with Z-Scores and I can spot a Blue student  a mile away. The Blue guy wants more investment factors into his model, he may want to toss PB, PE and PS factors into his model at the same time. He also wants to adjust factor weights in Z-Score calculation. One of the ways I catch up with Blues is to use my leisure time writing Python programs to answer the questions they pose which cannot be answered by experience or by hand, which often are the most challenging intellectual questions I grapple with. 

That being said, Blues can be crippled by their inability to make decisions when investing that are often time-bound. By the time you are 100% sure that a REIT is safe, the RED would already have Parkway Life and Keppel DC REIT at 2x leverage in his portfolio and laughing at the Blue's shitty yields. 

My customer base is strong Blue and I lose a lot of sleep to keep them happy by repeatedly updating my preview and lecture materials. It's thanks to the blue audience customer feedback of my course has gone from 6-7 to about 8-9 over the past few years.

d) Steadiness - Green

And then there is a deep forest of Green that dot the entire population. Green is a stable, supportive and sincere part of the population and forms the largest number of your colleagues. 

Nothing much can be said about Green because they make the bulk of your acquaintances, the world would be a horrible place if we're all Reds and Yellows, it is the Greens and Blues that keeps systems running and are happy and content with the status quo.  

The problem with Greens and FIRE is that Green's often lack drive and ambition. FIRE requires a ramp-up of adrenalin at earlier parts of your life so that you can ramp down earlier but Greens will argue that they already feel quite relaxed now. 

It is very difficult to overcome the inertia of Greens, but the question is whether do we truly want to?

One of my priorities is to hire some administrative support to improve the design of my slides and keep an eye to attention and I think I should be finding a Green to be my first employee. I am very afraid of hiring a Red to my team. It's always some guy with poor paper qualifications who keep wondering why is he surrounded by so many idiots and why I can't run my business properly. 

All this being said, an investment course would keep in mind to consider Greens when marketing themselves. A very ultra-Green pal told me that my course actually has a fairly decent component for "lazy" investors and walked me through how he would employ his learnings in practice without doing a single minute of stock analysis, I added his feedback to my previews and manage to improve conversion rates. Maybe this is something I need to look deeper. 

Let me end by sounding out a note of caution. 

Humanity is fairly diverse and the simplest personality profiling techniques used by academics involve five factors like Conscientiousness, Agreeableness, Open-minded, Neuroticism and Extroversion. If you can reduce a friend to one out of four pigeon-holes, you are running into the bias of stereotyping. The context determines which personality a person adopts - just try observing your Green friend turn Red after getting retrenched if he has a mortgage.

I suppose the idea of rapidly positioning someone into one of four neat categories is something a Red like me would love because it is just such a better use of my personal time. 


  1. I would be blue, and yes I suffered years for being too cautious holding cash.
    But this color model is too one-dimensional.

    Investing is one of the few areas where extroverts got no advantage over introverts. And higher IQ dont help once you are average. Just need to be conscientious and open to new ideas. And maybe a bit neurotic to avoid getting killed by the market.

  2. Yup. Agree with you. This model is just a quick overview. It doesn't dive deep into the investors psychology

  3. I think the greens may be the ones who actually win in the end, assuming that they do something. Dump the money into a good accumulating index (not the STI) fund, and let it run for a few decades. Lots of alpha seekers but not many Druckenmillers.

  4. These greens must have some blue or red DNA to be able to do this in the first place. I just got news that another green friend was retrenched by the public sector and now driving Grab.