Congratulations, you have started making informed choices about your personal finance journey by reading up on blogs/websites/media. Now, that’s something to be ecstatic about. But it’s something to worry about, as well, and I don’t mind telling you that I am damn worried for you!
I am worried that you might end up getting more confused after reading up the articles that ostensibly “simplify” or “demystify” personal finance.
I am worried that you will drown in the information overload and suffer from decision paralysis by reading up on so many websites on personal finance. You may have no clue in who is right and who is wrong
I am worried that you’re going to fall into the trap of ‘insights and advice’, that you’re going to worship ‘numbers’ (returns, expenses, commission rates, ratios, rupee cost averaging, etc.) without worrying about the real thing, i.e., about getting started at least.
I am worried that you are going to follow bad advice and random people instead of trying to taking responsibility yourself about your financial decisions, that you’re going to be drowned by superficialities (gimmicks, contests, trivial updates).
Do not follow the herd. Do not, I repeat be the prisoner of numbers and free unsolicited advice. And conflicting opinions
There are a lot of gurus and experts in personal finance. They say even I am one. But don’t believe the gurus. Definitely not me.
Use your brain, stay simple and start exploring the changing personal finance advisory landscape. It’s your money. Don’t let anyone else spend or invest your money.
Gurus are happy increasing the size of their own followership. They know the entire ‘rules’ of keeping a reader’s attention. They can tell you 100s of “Do’s” and “Don’t” of personal finance. They know how to optimize their websites for search engines to find them. Period.
They can tell you that there are 5 steps of financial planning. They wax eloquent on the financial mistakes of lesser mortals like you. They can tell you how to invest, why to invest but not give you any specific recommendations. They conveniently hide behind disclaimers.
They can give you rule after rule after rule. They are the scientists of personal finance.
But there’s one little rub. Personal finance is fundamentally personal and varies from person to person and happens to be not a science but an art. Are you shocked? Indeed it is 90% psychology and a mere 10% number game (that’s the only number I use. And even this is a made-up statistic!).
So what you really need most dear reader is common sense. A little bit of discipline and creative money management would not hurt.
Just like many consultants, may I request you have a high disdain for the usual personal finance consultants! They don’t understand your needs and story as well as you do. What’s worse, they might not even care! Sure, they have personal finance know-how. Yes, they can mouth the rules and statistics, etc.
But look beneath the jargon and what did you find? The same-old-sh**t, and a paucity of ideas. Have they done budgeting as they recommend for you? Or for that matter, financial planning, portfolio tracking or bought the products they recommend?
Jokes aside, all this is not to say that ‘expertise and understanding of numbers’ are unimportant. Superior tracking & review and their proper understanding will make for a good personal finance journey. But the danger is a preoccupation with reading up on financial insights or the mistaking of inane activity for taking simple financial decisions.
The danger lies in the temptation to out-source (in case you have the money) personal finance ‘gurus’ who have a formula for personal finance. The danger lies in feeling under-confident and therefore not starting on your own!
If you are to manage your personal finance, you must understand your distinctive personality, you must develop your own philosophy and ethos and not have the ‘personal finance rules made by experts’ imposed on you.
So, dear reader blaze new trails. Make mistakes. Let us prove to the world that good money managers can exist without reading/trawling the internet and common sense works as the best financial advice.
Not a personal finance expert by a mile. Just an aspiring storyteller on finance
*Disclosure: I have shamelessly copied the template of this letter from Manish Sinha’s post on Next BigWhat to Entrepreneurs.