May 10, 2015

Why Don't People Care About Personal Finance (feat Cheerful Egg)

One of the article by one of the top financial bloggers in Singapore, Lionel from Cheerfulegg.com caught my eye. The article named: Why Don't People Care About Personal Finance and he gave three reasons:

1) Most people find personal finance boring
2) Most people think personal finance is complicated
3) Most people wanna get rich fast

I agree with all these three points but however, I believe that there is a deeper problem, at least in Singapore from my point of view. I have been intimately involved in many of my clients' personal finances over the past 12 years and I can see a certain pattern why people do not care about finance. Let me break it down by demographics:

The Student (Age 18-24)

 
Source: mci.gov.sg

Who cares about personal finance! Getting good grades and getting a good job is my top priority. Getting a boyfriend and girlfriend is my second priority! Besides, I am saving on that graduation trip with my bf/gf. I will think about money problems when I start working. 




Marriage Route - Young Working Adult ( 21 - 30) 

Source: dbs.com

Who cares about personal finance! I am saving hard for my HDB, my wedding, my renovation and my car. I am trying to get the biggest house possible in a mature estate and I will need every cent of my cash and CPF I have saved up. And do you know how expensive getting married is these days? I will probably need to spend $100,000 on the wedding, the honey moon and the home renovation. Besides, I am doing well in my career and moving up the corporate ladder quickly and I probably will have excess savings after the wedding. I will think about personal finance once I have settled my bills and made my fiancee happy!

Marriage Route - Working Adult with Children (30 - 45)

 
Source: yahoo.com.sg


Who cares about personal finance! Do you know how much children's education cost these days? We spend about $2000 each month to send our kids to the top child care and enrichment centers in Singapore. On top of that, we have to pay for music lessons, Chinese classes, gymnastic workshops and holiday camps. I also have to take my family, including our parents for a vacation and all these cost money! Besides, all my friends are upgrading from HDB to condominium and the value of their condo is appreciating everyday! I need to save up to upgrade my house and that is probably my retirement fund! ( FYI: Your residence is a poor asset and some even consider it to be a liability)

Singles Route - Working Adult (21 - 35)

 
Source: expatliving.sg


Who cares about personal finance! I am happy the way I am and I am free to spend whatever I wish to. I also need to save for that HDB. Why is the government so unsupportive of singles?! I will have to spend my entire CPF and cash savings to buy that 4-room flat in a mature estate so that I can move out of my home, without my parents frowning at me each time I bring a girl home. FREEDOM AT LAST!! MUAHAHAHA

 

Working Adult (35 onwards)

 
Source: asiaone.com

OMG! How come my salary has been stagnant for the past 2 years! My friends are getting retrenched, especially in the banking and oil industry. I hear rumors that my firm is axing people soon. Why is there a glass ceiling whereby all the high paying and cushy jobs are occupied by foreigners! I better do something to grow my wealth! 

* Sudden interest in Personal Finance

OR

OMG! How come my salary has been stagnant for the past 2 years! I probably need to upgrade myself and get a Masters or PHD which cost $150,000. Most of my savings will be wiped out but it is all worth it! I think I better start planning for the savings which I have left over and find a good investment to grow it, just in case the job market turns for the worse.

* Sudden interest in Personal Finance

OR

OMG! My Dad just passed away and he left nothing but a mess for us! Why didn't my Dad do a better job in his personal finance and invest smartly in properties and stocks? I will not want to do the same to my children. Time to sort out my insurance, my will and my investment portfolio!

* Sudden interest in Personal Finance


I have chatted with many financial educators in Singapore and Malaysia and I observe a similar general trend. 80% of the people who attend their courses are 40 and above and predominately male. So why are females not interested in personal finance even though it is important for woman to know about money matters so that they can fend for themselves in case the man of the house goes astray?

I often chat with Alvin Chow from BigFatPurse and we often moan about the lack of young pretty ladies attending our courses and why we should have started a fashion blog instead. We also discuss on how we can reach out to the Singaporean ladies and get them to be more interested about personal finance and what can we do to encourage them to read up on personal finance (or attend one of the investment course if possible. Haha). This is one of the reason which I polled many ladies on the artwork of Wongamania, to ensure that they will embrace Wongamania like how they embrace Hello Kitty, while working on the art direction of the game.

I talk to a few of my lady friends and here is the summary of their response:


" Being a woman in Singapore is not easy. I need to work hard to look pretty, work 10 hours a day in a high powered job and come home to take care of the kids. I really don't have any spare time to do anything and the man of the house can at least take care of the personal finance and investing part and bring home some extra income!"


Source: supermommy.com.sg


So the problem with Singaporeans not interested in personal finance is partially as a result of the pressure of fulfilling housing needs, getting a car and spending enough money to keep up with the status quo of this competitive I-have-a-bigger-house-prettier-wife-faster-car-and-I-try-to-make-my-friends-jealous-by-posting-on-facebook kind of society. That is one of the main reasons why many Singaporeans opted for the "Make Money Fast" route, which Lionel has highlighted, is often the worst personal finance route any person will have chosen.


These people will probably end up losing much more money than they would have saved in a conservative low cost portfolio.


I know that because I have walked down the same path. 

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