Now, you have to understand that we’re personal finance bloggers. Which means that this session was way geekier than say, a Gushcloud meetup. For example, I think we spent about 10 minutes talking about yield curves. (yeah, I know).
Now, even though we know we can’t compete with “lifestyle influencers” in the looks department, we do our best to convey useful personal finance lessons to our readers every week.
However, we have no delusions: We know that the majority of Singaporeans don’t really care much about personal finance. So we started talking about why this might be the case.
Govt Gets An “A” For Effort
Look – I’m not a supporter of any particular political party or regime. But I AM an advocate for improving financial literacy among young people. (Why do you think I spend like 20 hours a week on this blog?)
In that area, I think the government gets A for effort in trying to improve financial literacy among Singaporeans. A couple of years ago, they launched MoneySense, a financial information portal. And if you look at the initiatives they’ve rolled out recently, they’re all meant to help contribute to financial literacy in some way:
- The Singapore Savings Bonds are meant to help new savers kickstart their portfolio and introduce them to the concept of bonds as an investment
- The insurance comparison platform is meant to make insurance
less painfuleasier to understand
- The reclassification of investments to EIPs is meant to make it easier for investors to invest in simple, straightforward products
These are all great initiatives. It’s definitely a step in the right direction. But here’s the challenge:
It’s Really Tough To Get People To Care
Despite these initiatives, let’s be honest: most Singaporeans don’t care.
Think about it: Taking a week to learn the basics of saving and investing could make you richer for the rest of your life. Yet, the vast majority of Singaporeans would rather spend that time reading about the Xiaxue / Gushcloud saga than a good investment book.
Why is that?
I don’t really know the answer. Maybe it’s because we’re approaching financial education the wrong way?
I had a beer with Alvin and Jon of BigFatPurse earlier this week, and Alvin said something interesting, “Investments aren’t like shampoo. You can’t just throw information or a platform out there and expect people to get excited about it”.
Totally true. When it comes to personal finance, advertising and campaigns alone aren’t going to cut it.
It’s kind of like the ongoing campaign to get people to quit smoking. Healthcare officials have been trying to get people to stop smoking for decades. They used brochures and advertising and put scary pictures on cigarette packs. Yet, despite having all the information on the obvious health risks in front of them, people STILL continue to smoke.
It’s really interesting, and I wanted to delve deeper into it.
Soooo after thinking about this icky problem over a plate of soupy noodles on a Sunday afternoon, I came up with 3 hypotheses on why most people don’t care about personal finance, and some possible solutions:
1. Most People Find Personal Finance Boring
Today, most finance material is filled with lengthy explanations, complicated formulae, and something to do with “tax loss harvesting.” (Kill me now).
MAS themselves admitted that while they try their best to make their material simple, they also need to be legally precise because financial institutions rely on that information as well. So their material sometimes ends up sounding, well, a little government-ish.
Which is why they rely on bloggers like us to make it a little more interesting. To switch it up a little, to use a little Singlish, and to convey the lessons using dumb stories from our own lives. (Okay, maybe that’s just me).
It’s not a perfect solution – we bloggers might occasionally screw up on the accuracy front. And you could argue that people who read personal finance blogs are already interested, so we’re just preaching to the converted.
Still, it’s a start.
2. Most People Think Personal Finance Is Complicated
Here’s the thing – personal finance doesn’t have to be complicated. At its core, it’s about knowing your money, keeping it, and growing it.
But people like to overcomplicate things, so they introduce concepts like “gamma”, “bull/bear callable options” and “candlestick patterns”.
Let me assure you: 99% of the population will NEVER need to know concepts like these. Really. Much of these were invented because some professor needed to sound important, and he figured that the best way to do it was to confuse everyone.
It’s time to take a step back and pretend that we’re children again. I especially liked this article about how a dad taught his children about money. He withdrew a month’s salary in dollar bills, dumped it all on the kitchen table, and physically showed his kids where it all goes to every month.
Booya! Instant financial education, minus the complicated charts.
So we need tangible methods like these to teach kids (and even adults) what personal finance is all about. Companies like PlayMoolah are doing a great job in this area. And then, only when we’re ready, we can tack on the harder, more complex concepts.
3. Most People Wanna Get Rich Fast
In my opinion, this is the toughest one of ’em all.
Most people are only interested in finance to the extent that they can get rich… FAST. Most people probably start off their personal finance journey with this mindset, only to discover later that it’s really really hard to get rich overnight.
In some ways, we have ourselves to blame. Our greed for overnight wealth has spawned a whole industry that exists to sell you that dream, at whatever the cost. That’s why we have scammy forex trading courses on Groupon and bankers who try to sell you funds with ridiculous expenses and “meh” long-run performance.
That’s why I wholeheartedly believe in and preach about index investing. It’s the perfect antidote against this “I WANNA GET RICH NOW” mentality.
Patience is a virtue!
So Whaddaya Think?
So those are my hypotheses about why it’s so hard to get people to care about personal finance.
The fact that you’re reading this already means that you’re not one of those people. At the very least, you’ve taken the first step to figure out this personal finance thing. So good job you!
But I’m still a little curious to hear from you. Why is it so hard to get Singaporeans to care about personal finance? What made YOU start learning?
Let me know in the comments below.
Everyone has a different reason, but if we can bring all the different factors together, we can make personal finance a little more popular (and a little less boring) for everyone.