This is a personal finance article.
It’s also a personal finance article telling you why personal finance articles aren’t very effective in helping people.
You might think this is strange, coming from a person who writes about money all the time. But I can only tell you the truth: you won’t get rich from reading personal finance.
Here’s six reasons why.
1. We Actually Can’t Give You Financial Advice
Scroll to the bottom of most personal finance websites, and you’ll see some common, though strange disclaimers: “not financial advice,” “for education purposes only.”
Well, if this isn’t advice, then why tf am I spending my time reading this?
Because the Internet is a great (and cheap) place to share information with lots of people. On the other hand, there are laws preventing non-qualified people from giving financial/investment advice to normal people. To show the difference:
- Sharing information: “This is how unit trusts work”
- Financial advice: “Next month, I recommend you invest RM 1,000 into Aaron Equity Fund because…”
This is generally a good thing. It’s meant to protect people from scammers and con men. But it also means that you’ll read a lot of articles without strong opinions or recommendations. And a lot of surface-level crap which isn’t practical at all.
2. Personal Finance Is Supposed to Be Personal
The second reason personal finance articles suck is they’re mostly too general.
It’s like buying clothes at Tesco vs. having a personal tailor. At Tesco, the clothes are designed for the mass-market average person. You’re basically screwed if you have an uncommon body shape — like if your chest is large, but your arms are small. You might get something that kinda fits, but will never look as good as if a great tailor crafted something.
Likewise, an article on the Internet has to be broad enough for maximum impact. “How to manage your money” is probably too broad. “How should young graduates manage their money?” is nice. But “How to manage your money if you’re good-looking, have three girlfriends and a Honda Civic, but no college degree” is only gonna be useful to maybe one person — so no one writes shit like that.
And yet, that might be the person who needs financial advice the most.
It’s the same thing with “rules” and “systems” that online marketers promise will help make you rich (just sign up here for ONLY RM x,xxx!). They’re nice and convenient on paper — but they don’t apply to everyone, all the time.
Broad information can be a nice introduction to a subject. But because everyone’s situation is different — it stops getting useful past a certain point.
3. Stories Are a Double-Edged Sword
The best personal finance articles have lots of stories in them. Some can even make you cry. The really good ones make you feel like “I can totally relate to what this guy is writing… I want him as my Internet-guru!”
But there are problems with stories. Our human need for stories comes at a dangerous cost: romantic tales often blind us to cold, hard data. And a lot of times, stories are not repeatable — especially when it comes to dramatic feats from people in different circumstances.
So just because you keep hearing about college dropouts who risk everything and hustle till they become millionaires, doesn’t mean you’ll have the same experience. Just because I (who writes my fair share of stories) quit a high-paying job to find meaningful work — doesn’t mean you should do the same too.
I’m not asking you to stop reading stories. That would make life miserable. But just understand that our minds are naturally biased towards believing in a good story — even if that story contains bullshit and is statistically improbable.
So the next time you’re enjoying the latest viral story, remember to protect yourself with critical thinking.
4. Beware Conflicts of Interest
Speaking of which, just because an article is popular and well-written — doesn’t mean that it’s good for you. Many are written with someone’s best interests in mind, just not yours.
For example, consider sponsored articles. There’s a reason why a company is paying big bucks to sponsor something on a well-known website: because duh… they want you to buy something.
It’s useful to ask yourself whenever you’re reading anything: what’s the motivation behind this? Is this article designed to encourage you to do something (which may or may not be good for you)? Should you follow its advice then?
This isn’t to diss sponsored articles or advertisements. They’re part of keeping content on the Internet free. (Unless of course, you’re willing to pay for content? :P) But in case you haven’t figured out yet:
I want you to be aware of things that can badly affect your decision making.
You should ask the same of me: So why tf do you spend time writing crazy long articles that you give away for free Aaron?
Because I’m tired of lousy articles online. And though statistically a lot of people will think my material is lousy too, I’m trying to contribute my share of good content to the Internet.
Also, because I want you to love me. 🙂
5. Awareness, Knowledge & Skill Are Very Different Things
“But financial literacy is important! It should even be taught in schools! Let’s create yet another financial-literacy portal with cool videos to help teach young people about retirement! (Young people like videos so they’ll watch them right?)”
You might be shocked to learn this though: we already have evidence that financial literacy programs don’t work.
Did you know that the kind and loving Malaysian government has already had several initiatives in the past to promote financial literacy? Banks do it all the time too — but what do you see in the newspapers every day? “Malaysians have most debt in Asia!”
Well, it comes down to human nature: knowing about something and doing something about it are two very different things.
And don’t get me wrong — raising awareness is a good cause. That’s why I continue to write every day. But real skills — in managing money or any other practical life matter — don’t come just from reading. They come from doing, reflecting, then doing again.
It’s like mastering football. You don’t become Cristiano Ronaldo by reading articles and listening to podcasts titled “13 Shocking Ways to Beat Your Opponent.” You have to actually put on boots and chase a ball with 21 other people.
Practice beats theory any time.
6. You Have to Experience It for Yourself
If there’s one thing I want you to take away from all this, it’s that ultimately you need to take responsibility; for your money and for your life. You could read step-by-step finance guides all day, but mindset, the deep stuff inside you is way more important.
Yes, the world of personal finance is difficult and confusing — especially at the start. And we always feel safer if there’s someone there to guide us.
But even toddlers must eventually be released from the safety of their mothers’ arms, and endure their first fall. Likewise, you’ll never get far if you just hide behind the safety of written words. The important things in life are hard; get used to it.
I like to look at myself as your friend and guide. Maybe even a big brother. So I’ll continue to tell you what I think and share my stories. I hope you get inspired and learn some interesting things. But I don’t want to tell you what to do. No, that’s the wrong concept.
I just want to help you figure it out for yourself.
Because this is your life, and you’re the hero in your own adventure. And the day you realize this, is the day it sets you free from all the “gurus,” “systems” and shallow advice in the world.
Online articles like this are good for raising awareness. Great ones may even inspire you to find knowledge. But in the end, you only get good at money by experiencing things for yourself. So get out there, and embrace your own personal finance journey.
Then maybe someday, you’ll have your own rich story to share too.
– – –
1. Lifehacker: Financial Literacy Alone Won’t Fix Your Money Problems
2. The Billfold: The Problem With Financial Literacy Is it Doesn’t Work
3. Get Rich Slowly: Why Financial Literacy Fails (and What to Do About It)
4. I Will Teach You To Be Rich: Why Personal Finance Experts Continue Giving Worthless Advice
Thanks Mr. Stingy. They said knowledge is power! In the end practical more efficient than theory. Your point of view really interesting. Keep posting your blog love to read it!
Thanks so much Lokman,
Really appreciate your kind words.
Sometimes the story/teaching are too perfect, you can follow along step by step until the day you actually experienced the shock your self (eg: stock crash, crypto dump), then you will realised that it’s not as simply as ‘they’ preached.
Yes, exactly! Real life can be very different from “theory”!
Thanks. This needs to be written. It is said knowledge without transformation is just entertainment. Sometimes it is what the writer wants, sometimes it is what the reader wants. But sometimes, even writers stop writing for entertainment, they want a real solution that readers can use.
Yeah, entertainment is fine. But without behavioral change — it will always remain as that. Like eating popcorn while watching a movie.
What I hate is websites like Yahoo, Bloomberg, etc. where their retirement experts have no idea about how the rest of the population are unable to save up for retirement due to the prices of goods and services, lousy wages, unable to afford to put money in a company’s pension like Walmart because of lousy wages and Walmart makes it too expensive to put money into it.
Yeah, it gets damn irritating when the “experts” are so far removed from the average person’s troubles!