We’re not talking about money
Pogba’s latest haircut, who has been kicked out of Love Island or Matt Hancock’s antics we happily while away hours in the pub discussing these important events distractions. Meanwhile, money or as I like to call it LifeEnergy® is forgotten about. Like it or not we are all trading our time for little bits of paper, numbers on an online banking screen, or if you are a remote software worker in the fast east maybe Bitcoin. So why my dear reader are we not talking more? Let’s dig into some theories, the impact the taboo around our personal finance is having and how we can go about changing it.
From cradle to grave
We all have a money blueprint that is laid down in our early years when our vulnerable minds are as pure as the freshly driven snow and there are arguably three key influences that shape our interaction with money over our lifetime.
The first is our family environment. We spend 18 years or 6,500 days with our parents and siblings during that time we hear arguments about money, countless Saturday nights in front of the TV with our fingers crossed that our lottery numbers will come up, or perhaps there is no discussion about finances. Not even an awkward birds and the bees chat. Nothing, Nada. This process of acquiring financial knowledge and developing attitudes to money is and is known as financial socialisation and it has been shown to begin very early in childhood.
Number two is the media by which I mean The News- which was once just Radio 4, the 6 o’clock news and the weekend broadsheets. Now we are up against hundreds of outlets from Breitbart to The Daily Hail all of which have an insatiable appetite for clicks and drive a binary discourse e.g Crypto is a scam vs. Crypto will save the world. Social media of course fuels this by keeping us confined in our echo chambers where we are fed a diet of algorithmically tailored content on YouTube, Reddit or Facebook.
Last up is the financial services industry or more specifically the banks. Growing up and throughout our lives, our only touchpoint with the industry has been our high street bank. Surely they are fighting our corner and on our side after all they are offering free financial health checks/ aka ways to sell products. That’s not to say the people who work in banks are unscrupulous after all, in 2016 I was one of them. What became apparent from my time there were the incentives- rather than open up a broad discussion about money goals it was all about funneling early career professionals into the hands of the mortgage team or if you had over £50k a financial advisor.
For decades the retail divisions of the big high-street banks have raked in massive revenues from providing financial advice. This perpetuates the feeling that money is something too difficult to understand, get a handle and take ownership of. Sure, there areas of your life that you wouldn’t DIY, it’s not advisable to perform your blood test or replace your car’s engine. But you can probably change out the wiper blades or top up the oil. I’ve written a piece about how my parents chose to outsource money management ahead of taking responsibility.
Fast forward to our generation- I forget what we are now being called, gen x, millennials whichever it is we all have access to this magical tool The Internet. The home of cat videos, conspiracy theories, and …. But it also contains the resources, access, and apps that you need to take control of your financial life. Each of us has a different preference for learning — some visual in which case start with these videos others prefer longer-form podcasts and for the real finance junkies out there there are thousands of blogs- this a good one to begin with.
A word of caution: it is very easy to fall down the rabbit hole of scrolling through endless forums and you will be no further ahead. It is much more important to start taking even small steps which will compound over time and build your confidence. It’s a bit like going to the gym, you don’t become Arnie overnight, likewise with managing your money you won’t become Ray Dalio/ hedge fund master of the universe from the outset. Far better to find a money buddy, someone ideally not related who you can talk about freely and keep yourself accountable.
Here is a meetup group to join:
As with everything there is a lag in changing culture, old values are entrenched and unfortunately many self-sabotaging behaviors around money have become habits. Hopefully by exploring the links above you can see there is a different path to take. There are no shortcuts; it takes upfront work and periodic pruning. But managing your investments needn’t be complicated is one of those areas of your life where tinkering can be counterproductive. It is sometimes best to set it and forget it.
The best time to plant a tree was 20 years ago. The second best time is now. So just get started.
Last week I was emptying an old drawer and found my national savings passbook- which believe it or not has interest payments handwritten. The first entry is the princely sum of one-hundred and eleven pounds when I was 17 days old.
How things have changed !
I’m about ten years down the investing path- I started with a Abbey National (now Santander for those under thirty) 5.5yr bond which paid out a good chunk if the FTSE went up by a single point at maturity. (this was in 2008)
In hindsight I guess this was an important lesson in the power of locking money away and delaying gratification. In 2012 I started my first real job and stumbled upon Index investing, dabbled along the way in individual oil stocks (naturally lost money) and even ventured into Crypto. I wish I’d been more open about talking about money as most of this stuff I had to figure out on my own.