Tuesday, August 14, 2007

Confessions of a Personal Finance Blogger

Perhaps there is something in the air or perhaps my frustration at working on switching to a new hosting service that has me thinking about my limitations and failures. So in the interest in proving I am not a personal finance guru all the time I present a brief list of confessions.

  1. With the recent market correction even I have had the thought "Did I make a mistake and is this investing with index funds a good idea?"
  2. I bought a stock when I was a teenager with no knowledge of what the company did or anything else other than I liked the name of the company. Sad but true. In the end the stock fell so much that I could barely cover the trading fee to get out of the stock.
  3. I've gotten to the point of reading so many personal finance books over the years I can now pick up new ones and skim entire chapters after reading two paragraphs in a chapter. You can only read about this great concept of 'living below your means' so many times before your brain starts to turn to mush.
  4. I do enjoy investing and personal finance, yet I very much dislike the paper work that comes with it (bank forms, account statements and booking appointments during my lunch hour to sign forms).
  5. Some days even I think "Am I too obsessive about all this personal finance stuff? Am I the only one who thinks that most people are strangely reckless with their money and still manage to turn out relatively fine some how?

9 comments:

guinness416 said...

Most people do turn out fine at the end of the day, people are resilient, but I wonder about comparing my grandparents (Irish govt pension, serious property appreciation, never had debt, one stay at home spouse all their life, not needing to sell a limb to send kids to college, less pressured medical systems, etc) to my peers. I have a few personal-finance blogs in my reader, but some days just delete all their posts. Some days you just don't want to deal with all that crap. Oh and stop reading finance books - work your way through the Booker winners list like I am, much more rewarding.

Mr. Cheap said...

I think most people would be lieing if they denied ever having doubts like you've listed (I think I can relate to each of them).

1) That's human nature. We're not machines. With skin in the game, watching the meltdown happen and money disappearing from your investments ANYONE would have doubts. This is where many people sell (and lose out on major gains in the market because of it).

2) Everyone's probably done this (I bought some stock years ago on a "hot tip" for my mom's friend, I was under 18 at the time - turns out we bought the wrong company!!! :-)

3) I've found the same thing, it just means you've acheived expertise in the PF realm of knowledge (you start reading something, know where they're going with it, and skim ahead looking for something new to you - that's the way you do it!).

4) I agree, red tape sucks.

5) This has me scratching my head at times. I'm amazed at how reckless some people can be, and then baffled when they land on their feet. Go figure. You should be that much further ahead of them do to being willing to put some thoughts into your actions.

Don't feel bad about your confessions, I'd say each one shows that you're ont he right path (or if you're on the wrong path, I'm right there with you).

Mr. Cheap said...

WRT #2, you're self-aware and smart enough to realize it was a bad move and not repeat it. Some people would invest this way for years and not clue in that they're throwing away money...

Canadian Money said...

I can relate. Its normal to get discouraged from time to time, it comes with being human and having goals.

The paperwork is a pain. Most people wouldn't do it. I'm often months behind in updating my cash flow spreadsheet but that's not a problem because things change slowly.

In hindsight...there will always be a better investment. The index always comes back after a decline. It guarantees "average market performance". Anything else (stocks or fund) have a higher risk of permanent loss.

telly said...

#4 has been on my mind a lot lately.

What gives? I watch my friends that make significantly less than my husband and I do live in their beautiful, new, large homes, drive their fancy cars and go out for dinner at fancy restuarants. Do they skimp somewhere that I'm not aware of or do they just not get freaked out by debt like we do?

Canadian Dream said...

Telly,

Beware making opinions based on what people own. I've seen far too many people who appear to have it together, but in a detailed conversation you realize they are drowning in debt.

I think in the near future if interest rates keep going up we are going to see very quickly who really has it together and who just appears to have it together.

CD

telly said...

CD,

You're absolutely right - and that's why we choose to live very different than they do (even a small mortgage freaks me out!)

An example:
I have watched my uncle go from the guy with the Benz, the HUGE house and all the other fine things to struggling to keep his house. My father, the steady working guy with a few kids and a stay-at-home wife, living very modestly came to his rescue during the tough years. To this day my uncle still enjoys finer "things" than my dad does, and every now and then my dad still finds himself writing a cheque.

It's like you said though, somehow these people manage to land on their feet.

Anonymous said...

Other than the luck of the real estate market, what real gains have you made?

-Leased a car? (Horrible 'finance' decision...)
-Your stocks are less than 10K in total? That's not even enough to buy one decent stock let alone a 'portfolio'.

Canadian Dream said...

Everyone,

Thanks for all the comments. It was great to hear other people's thoughts on those points.

Anon,

So paying off $60,000 of student loans and building up $38,000 in RRSP/investments/savings and getting a house down payment together is nothing? Sorry you feel that way, but I'm rather happy with the progress I've managed to make while never earning close to $100,000/year.

Best to luck to you with your goals.

CD