Playing the Game

I want you to close your eyes and think of a game.

• If you’re into sports, think of a team sport like volleyball, soccer or baseball.
• If you like card games, you can imagine poker or any other game where skill plays a large part.
• If you like board games, perhaps monopoly will do.

A few other caveats:

• Imagine you are up against a highly successful processional team who has been consistently winning at this game for years.
• Now, imagine they haven’t explained the rules of the game to you – nobody has.
• Finally, you’re wearing a blindfold.

Good luck!

Yeah, the chances of you winning are pretty low. It’s as if you showed up to a soccer game with a baseball bat and didn’t know that the object of the game was to get the ball into the opposing team’s goal.

Yet, that’s often how it is with personal finance and wealth building.

The deck is heavily stacked against you:

1. First, it’s hard to know what to do in order to get a high paying job.
2. Is college the answer? It’s hard to get through college without paying far too much. Student loan companies want you to borrow more so they can profit, and schools want you to borrow so you can pay them more.
3. Then, once you get a job, it’s hard to know how to avoid paying more taxes than necessary.
4. There is an army of marketers with huge budgets out there who spend their time all day, every day trying to come up with ways to get you to spend money on the products and services they pedal. Their job is to convince you that you need that new shirt or smart watch or car or… whatever, and you need it now. You have to have it, and it can’t wait!
5. Then there is another army of people who work in consumer finance companies. Their only goal in life is to get you to borrow money from them so they can profit off of the interest. That thing you have to have now? You can pay for it later. (You’ll end up paying more, of course… but don’t worry about that).
6. When you decide it’s time to find your own housing, there is no shortage of unscrupulous landlords, property management company, and real estate agents who will be more than glad to deprive your of your money. Getting you to buy high and sell low is their real priority – but they make a hefty commission either way!
7. Insurance companies will pray on your fear of uncertainty and death to overcharge you for insurance that you don’t need.

Worse yet, once you decide to save money or invest, people are out to fleece you there too!

8. Brokerages are happy to sell you the dream of day trading, because they make profits whether you buy or sell, and are all too happy to encourage you to do so as often as you would like – even if that costs you more in taxes. They are also only to happy to lend you money on “margin” – that’s right! You too can borrow money to bet on stocks! You may as well use your credit card to load up on Lottery Tickets, Pokemon Cards, and Beanie Babies to make your fortune.
9. Assuming you’re smart enough to avoid day trading, FX, Crypto, binary options, and all of the other hype swirling around the cesspool of get-rich -quick schemes, and invest in a NISA or 401k – that’s when the high cost rip-off mutual fund advertisements start. Fund marketers have spent decades honing their techniques to make it look like investing in mutual funds might somehow provide you with enough returns to outweigh the expenses – even though they know it won’t. If you complain after losing money with them, they can always say “We told you past performance isn’t a predictor of future returns…”

I could go on, but I think you get the point by now. Everyone is always out for your money all the time. You knew that already – but bear in mind that they have people with PhD degrees in psychology designing experiments to see if they can take just a little bit more of your money, while you are being tracked online by the likes of Google and Amazon to make sure they extract every last bit of money they can, like hungry wolves sucking the last bit of marrow out of your bones.

If they think they can get you to spend more money because if your heritage, country, depression, pregnancy, time of day, desire to fit in, political affiliation, day of the month, lack of self confidence, divorce, fear of missing out, marriage, etc., it doesn’t matter – whatever it is, they will try to track it and exploit it.

So you have companies monitoring your education, employment, and purchase history, current location, etc., while other companies perform A/B testing and apply the latest psychological theory to develop the most effective marketing campaigns. Then they combined these two things together to target you individually. This massive and sophisticated weapon is aimed squarely at you, and your defense is?

If you were extremely lucky, you might have had some sort of personal finance course in high school or college, where you learned boring words like “budgeting” and “401k” – just at the time you were occupied with other studies tons of other things more interesting.

You come out of the educational system knowing next to nothing about reach financial security, meanwhile your parents can’t teach you much if they are living paycheck to paycheck themselves.

You learn platitudes like “Love can’t buy happiness” and accept “The Rich get Richer and the Poor get Poorer” as a truism, and just give up.

This might all sound like a crackpot conspiracy theory – except if you read each point, you can verify that they are true. It’s pretty much common sense that everyone wants to take your money, it’s just that not everyone realizes the mechanisms in use.

My pain point here is that the reason most people don’t “win” at the game of personal finance, is that nobody has even taught them the rules.

For example, if the average person believes wealthy people buy expensive watches and cars to show off their wealth, then they may buy expensive watches and cars too – which, ironically, will prevent them from ever being wealthy.

In general, if someone (especially some company) wants you to do something, it’s because it’s good for them – which often means it’s bad for you. Keep that in mind next time you are offered a “special promotion” or “exclusive deal”.