Last week I got an note from a writer at the large Dutch new outlet Nu.nl. In that comment I got the question to do an interview for an article about FIRE. It didn’t take me long to say yes! Here is the resulting article together with two other Dutch bloggers: Mr FOB and Mr FIREME.
But I was weary of negative feedback & haters…
Cheesy Finance in the Media
This was out first feature in the main stream (Dutch) media. And I was pretty scared about the comments that would follow. For some reason I have not seen any haters on the blog in over 3 years. I would like to keep it that way too. Makes me believe there are only nice folks on this planet. I know, unicorns and rainbows…….
That being said, I had to read the comments obviously. When you do, you realize the lack of financial education for many people. So today we will take a look at some of these comments (I’ll translate) and why they are wrong, funny, scary and more.
Below is a selection of comments, summarized English translations and my thoughts.
“The government is taking all my money”
Apparently, according to this commenter, the government is taking all his money and he has nothing left to save…… Yeah right. Blaming the government because you spent too much is not entirely fair, now is it.
Yes we pay a good amount of money in taxes, but we have a progressive income tax system in the Netherlands. This means that you pay more taxes if you earn more (and you get benefits is you earn very little). Paying a lot of income taxes is a luxury problem. However, if you spend/drink/smoke/drive more, you also pay more in the form of sales & other taxes. One part is out of your control, but the second surely is not!
“My IT investments cost me a lot of money”
This commenter states that she lost lots of money in IT shares and that she could have bought a nice car with that lost money. Firstly, don’t buy the car! Secondly, something tells me this happened during the Dotcom bubble at the turn of the century. In short, she got burned by focussing on one sector when it was HOT (Crypto’s anyone?). Why do people keep on picking “candies”, rather than buying the candy store (read: well diversified, low cost, index funds)? You don’t get rich quick without massive risks!
“I don’t save any money with my studying kids!”
This commenter is complaining that he does not have any means to save due to his 3 studying kids. Despite that he has 3 times the mean income (~€112.500/year gross income!). Yes, getting your kids to school is getting more expensive by the day. That being said, he must be doing something terribly wrong indeed (see also comment by Kees_M2). Because that is a lot of money to be spending per year and not save any at all.
Here is also a news flash, they can also get a job and pay for some (or all) of those costs. I did! At one point I had 3 jobs on the side during University and I graduated without student debts. However, my parents did pay for books, tuition and school related fees (at that time around €1.500-2.500/year). I took care of my rent, my food, vacations, fun and more.
If you are a parent, start saving very early so you can have compounding interest help pay for education for the kid(s).
“Just saving is fine too”
This commenter is actually doing pretty good. He started saving, but not until he was well over 50. Better a late start than none at all! He still managed to save enough to get out early at 62. Well done mate!
However, he is not investing because of the time he thinks he doesn’t have. That’s however not entirely true. But I get his comment, being closer to the formal retirement age, you might prefer a more stable portfolio. The trick here might be to focus on cash-flow generating investments, rather than the capital gain investments. Dividend investing/real estate investing to the rescue!
“What is the added value of this article”?
This person is wondering what the added value is of the article that we did. He is wondering how “Mr X” is differentiating himself from the rest of us. The second commenter is stating: by not talking about the subject but actually doing something!
So true, reading about financial independence, savings, investing, being mindful with money only makes you better when you start implementing! Get you ass moving and do something with your life (and finances). Complaining does not get you anywhere.
“A long story about throwing away money”
According to Henk, investing money is the same as throwing away money. Dear Henk, it really is not! Once you realize that money makes more money by investing, so many opportunities present themselves, it’s truly amazing. There is a good reason why rich people get richer, here is a wake-up call: so can you!
Oh, and apparently according to Henk, I cannot do what I do now… Yeah….. about that. Guess you are still at work today, I’m not 😉
Just to prove a point, when you buy the index and you look at the longer term, in what way are you throwing away your money? Even the crashes of the dotcom bubble (1999-2001) and latest financial crisis (2007-2009) are hardly visible! And there will be more in the future! Learn to ignore this noise and keep going.
“If you invested in the last 3 months, you lost money”
True statement, at least on paper. But if you think you are “always” going to make money in 3 months, you very much mistaken. Investing in the stockmarket is something for the longer term, say 10 years or more! Regular trading where you trying to buy low and sell high is not investing, it’s speculation (@JWP, you never know when it is low until after the fact! So just start now, that way you will at least get the (quarterly) dividends).
The “buy & hold” strategy with index funds IS investing. It’s an almost fool proof concept to “buy low and sell high”! But it only applies when you wait long enough (thanks Herman for pointing that out)!
“You don’t have to invest and profit from others”
Jo has a very good point that if you have a simple and “rich” life, you can get a long way. Don’t make (consumer) debts, pay off your house and work part-time: life will be good. Not much to argue here.
However, Jo also states that you don’t have to invest and profit from others. Wait, what? By investing I profit from others? In a way I guess so, because most people buy “stuff” we make more money. But I don’t feel like I’m taking advantage of others that way. I’m just using the monetary system to our own benefits with no intent to “harm” any other people. Different views I guess.
“Do you think investing comes free?”
Luuk22 is stating that investing is gambling. To follow up with stating that you could wait 10 years for it to become worth more. Next he states that we are forgetting that there are fees for investing/management. Suggesting that you pay more to keep it that long, compared to the increase in asset values. Sometimes he might be right, high costs mutual funds can get pretty close to this situation.
Dear Luuk22, that is why we have low cost index funds, that way you invest in many, many shares (taking out the gambling part) and avoid financial advisors that eat away YOUR return on investment.
Note to Boomin_System: good points about the costs of investing and knowing what you are investing in. But you are not entirely correct on the topic of cost averaging. Dumping all your money in the stockmarket all at once can actually be better than cost averaging (it’s actually the case in the majority of the situations). See also here.
“No, you cannot reach FIRE with less income”
Mr Wax states that you cannot reach FIRE with less financial means. Which may or may not be completely true. It certainly will take longer if you cannot save as much. That being said, why not have some passive income stream? Why not have a financial buffer if life throws poo at you? Doing nothing is not a brilliant idea either!
Not going to comment again on the “gambling on the stockmarket” statement once more. But I do want to make one note on the pension statement. For all that want a bit of extra pension, and that are young, make sure you invest aggressively (offensively) in your pension account! Time is on your side, make sure you profit from that. You can change the risk in your investments when you get closer to the retirement date and have to take the money out to buy “lijfrente“.
The feedback was not as bad as I feared. Still no hate-mail either. Hope we can keep it that way. That being said, there is still a lot of misconception about investing. Especially in the stockmarket! People just love to gamble and complain about it when it goes sideways.
Education is key here and I hope that more people will take control of their (financial) life and start generating some passive income. But you need to learn to focus on the longer term first!