Cheesy Finance in the Media

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.

Cheesy Finance in the Media
Cheesy Finance in the Media

The Comments

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!

Cheesy Finance in de Media - Comment 01
Cheesy Finance in de Media – Comment 01

 

“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!

Cheesy Finance in de Media - Comment 02
Cheesy Finance in de Media – Comment 02

“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).

Cheesy Finance in de Media - Comment 03
Cheesy Finance in de Media – Comment 03

“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!

Cheesy Finance in de Media - Comment 04
Cheesy Finance in de Media – Comment 04

“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.

Cheesy Finance in de Media - Comment 05
Cheesy Finance in de Media – Comment 05

“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 😉

Cheesy Finance in de Media - Comment 06
Cheesy Finance in de Media – Comment 06

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.

Cheesy Finance in de Media - Dow Jones
Cheesy Finance in de Media – Dow Jones

“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)!

Cheesy Finance in de Media - Comment 07
Cheesy Finance in de Media – Comment 07

“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.

Cheesy Finance in de Media - Comment 08
Cheesy Finance in de Media – Comment 08

“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.

Cheesy Finance in de Media - Comment 09
Cheesy Finance in de Media – Comment 09

“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“.

Cheesy Finance in de Media - Comment 10
Cheesy Finance in de Media – Comment 10

Conclusion

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!

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22 Comments

  1. Some people say not to bother reading the comments on these sort of articles but I think they give us a good insight of how we can help (some) people. Others are clearly beyond help! 🙂

    Great set of replies to the common objections about FI. It seems the stock market = gambling one is very common. I can understand that as it’s pretty much what I thought before I read a few FIRE blogs.

    1. Ha, yeah, some really just don’t want to be helped! But I agree on the stock market and gambling sentiment, I also had that feeling until the point I actually did my research and found out that it’s one of the best ways to make loads of money. Education = power = money.
      Thanks for the comment!

  2. These comments sound very familiar. I do understand that not everyone can save the same amount but usually there is something wrong with spending habits too.

    It’s hard to have a conversation about FIRE with friends and coworkers, because most common comments are that investing is gambling and it is just a daydream to reach financial independence without winning the lottery. It’s much easier to talk with someone that doesn’t immediately start talking about how it’s impossible to save anything after you have kids or something like that.

    Luckily we have a huge FIRE community where you can talk about these things!

  3. Well, these kind of discussions always tend to become very black and white, while the reality is often more greyish.
    Yes: most people can live on a smaller budget to become more financially independent, stock exchange is a lottery, but you can mitigate risks by spreading over time and place.
    But: The FIRE community is extremely liberal. You are both healthy and highly educated, just as nearly the whole FIRE movement. Becoming FIRE for people that had bad luck in education, health or life is much, much harder. I explicitly mention bad luck, because uneducated/unhealthy people are not lazy by definition.

    1. Oh I agree, but in such situations you still can make small decisions that make your life better. FIRE is not for everyone, but more financial freedom/stability should be! People do like to play the victim role, which rarely is truly the case. In many cases it’s just being ignorant of your own mistakes.

  4. I have read the article when it was featured and I was surprised by some of the comments as well.

    Too me it shows a lot of people just have that victim mentality where they don’t grasp the concept of taking control of their own lives.

  5. I have also read the post this morning, brought to my attention by the kind people of Reddit! Also I read most of the comments here, and cringed a little. I don’t know why I’m still surprised by the lack of financial knowledge, but I guess most people don’t really understand anything at all about finances.

  6. There will always be needers, wanters and deservers. Needers will always complain and whine. Wanters want the same but find something why they can not. You are a deserver and made it happen ! Congratulations on the article !

  7. Exactly this, this is what should be the official response to the naysayers. I was expecting more of these responses, it’s good to see other people were correcting some responses and supporting the article. Nice work Kaas!

  8. Great post, and great article 🙂 I tried to sit on my fingers not to comment on probably all of the comments you mentioned above. I’ve noticed that it is hard to see possibilities (in general, but especially also when it comes to FIRE) for many people. They seem to prefer problems. Well, to each their own..

    1. Seeing possibilities is hard indeed, you have to get over that fear that it might be you who is to blame for not moving forward. Once you open your mind to new things, it just get’s better all the time!

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