Why Investing In Yourself Is A Problem [TFC 92]

Good morning everyone! I welcome you to another day with The Financial Coconut. In our podcasts, we are debunking financial myths, discovering best financial practices and discussing financial strategies that fits our unique life.

You get it! Ultimately empowering us greater lives we love while managing our finances well. Today I’m going to spend some time to share with you why you shouldn’t invest in yourself. Okay? You are not an investment!

So before you think this is some click baity shit and I’m purposely taking the other side of the discussion so that you will click in and listen, the reality is probably yes, a little bit of it… but I also want to make a point here. The basis for today’s discussion is that I am extremely big on how we name things and how we use vocabulary, how we use certain terms. I find it extremely problematic when we see ourselves as an investment. So why is nomenclature important? Essentially names like vocabs, why is it important? I’m not going to go into some long history discussion about words and what do they mean. But I want to challenge you to do a short little social experiment.

Since everybody is locked down at home, try this okay? Text 10 friends and ask them a few things. You can ask them things like “what is love to you” or “what is respect”, “define responsibility”, “what is freedom” and I guarantee you 10 answers will have limited overlap. Everybody has a different answer. You know why? Because I tried it in many, many life discussions. I asked 10 people, “what is love?”, “what is love?”, “what is love?”, “what is love?” and they are all different. Generally, it’s pretty different and that’s the power of vocabulary because everyone is attaching a certain meaning to it. With that you realize people use vocabulary extremely loosely.

Which is why when I talk about things like risk, which is something that is very used in day-to-day, everything is very risky. Everything is risk, risk, risk, right? The episodes that we talk about risk, I made it a point to define what is risk and that forms the basis of discussion. Because when you define something, there is a premise where everybody can then “Ah, okay. So this is what it is.” then we can discuss from there. If not you’ll realize that it is an endless discussion because everybody’s definition of that fundamental thing that they’re discussing is different. Big words like freedom, liberty, responsibility, love, all of them are extremely fluffy in different people’s eyes. People see it differently! 

When it comes to investment, this is that one word that is also extremely loosely used. Everything is an investment. Buying a bag is an investment. Go for a course is an investment. Investing in a financial product is an investment. Buy stocks, everything is investment. These days, even the auntie talks about investments. If you think about it, it’s also another word that is extremely loosely used. And every time something is very loosely used, I find it extremely problematic. 

To kick start this discussion, I’m going to define what is an investment. To me, an investment is allocating capital… in this case money, allocating capital into something in the hopes of it making more capital for me in the future and that’s it. 

There are two main ideas in this definition. Number one is, I am allocating capital, I am putting money away into something so that it can make me more money in the future. This kind of governs the whole idea of delayed gratification. Essentially means I’m putting money away, not consuming them now but hoping that by buying something else in the future, my money will grow so that I can get more money to consume. The end is still to consume. I think that is something that a lot of people need to be very clear about. The baseline is still consumption. Stocks, bonds, REITs (Real Estate Investment Trust), businesses. It’s not a consumption thing. You’re not going to consume those things, it’s not even money. 

You can consume experiences, you can consume a great dinner, you can buy something like a bag. All those things are your end consumption. But if you’re not going to buy all those things for consumption and you’re going to allocate capital into something for future capital, that is investments. So that is one concept in this definition. 

The other concept is the concept of hope. Like I said, I’m defining it. Investments is me allocating capital into something in the hopes that it will give me more capital into the future. So the idea of hope is extremely important because it will then factor in things like risk, uncertainty and my realistic understanding that this is not guaranteed. There are fluctuations, there are things that will happen and I’m just making my best educated guess. 

You can define things in however you want to define. You don’t need to share my definition of investments. But if you can define investments or risk or love or responsibility in however that you want to define in your own words, it gives you that colour in your life. Research have shown that people with a wider set of vocabulary experiences life in a more colorful tone.

Imagine you only know the word “sad”, “sad, sad, sad, sad, sad”, everything is sad. There is no texture, there is no nuances, there is no variance in your experience. Everything is happy lor (an exclamation used at the ends of sentences for emphasis), sad lor, angry lor. That’s going to limit your way of life and it’s going to limit the way you see things.

Definitely learn to define things in a more specific manner and be clear about it. So for the word of investment, don’t use it loosely. Buying a bag is consumption, don’t tell me you’re investing. So this is not like some semantics play and not trying to make your life difficult… everything must define. But if you can have clearer definition about different things in life, especially these big words, freedom, liberty, democracy, investments, risk, insurance, all these kinds of things that people use it extremely loosely and they don’t have clear ideas about what they’re saying. It makes their live extremely “feely-feely” right? So it’s a problem to live life in a “feely-feely” fashion, but you will find it very hard to repeat yourself consistently. So all these discussions we can carry on another time, but the base idea that I’ve defined investment as then informs why I think you should not invest in yourself.

And the first point… it’s a bit funny. Point number one is… most people that tell you to invest in yourself actually really wants you to invest in them. It’s not about yourself. So where do we hear this line a lot? Invest in yourself. You hear this a lot in the course circuit or in the people that are trying to sell programs or motivational discussion, these kinds of stuff essentially. It’s not a problem. I totally think you should read books, you should go for programs, you should improve yourself, it’s part and parcel of life. If the course providers are doing a good job, then why not? You should pay for them so that they can continue to create good courses and benefit you. Essentially if you think about it, you can go to the library, everything can be free. That’s the truth. You can go to the library, read a thousand books, everything can be free. Or compared to someone who already read the book and they filtered the information and they come to you in a structured manner. And ta-dah, that’s a course you pay them for their whole process of development. So courses are not bad in itself. I used to think courses are extremely disgusting, but I’ve come to realize that courses make my life easy because I don’t need to do all the research. But that does not mean that you should go for all the courses and everything. 

My problem with this idea of investing in yourself being propagated within the course ecosystem or within this whole motivational discussion ecosystem, is that a lot of time, they’re just trying to prime you to spend money. They’re just trying to prime you to take out money to put with them, essentially to buy their program so that you can invest in their course. It’s not so much about you! 

I’ve talked about this before in some of the earlier podcasts. If you want to learn something, go and read a book, that’s the cheapest. You can go to the library and get it free. If not, you can go and buy something online. A lot of reviews these days. So go and read a book, read one or two books about that particular topic and question yourself, “Hey, is this something that I’m willing to invest further?” If this is something that I’m willing to invest further, then maybe you could go and sign up a program from there. Don’t buy those few thousand dollar program, like super mentor all those kind of shit. If you think about it, if you want to be a karate black belt, you start with a white belt. If you are nobody and you talk to the highest level individual, you will get no ball.

You don’t get it because there are so many things that you need to pick up, which is why the podcast is great, because you learn a little bit, a little bit, a little bit over time. Then at some point in time, you’ll be like, “okay, now I know what to do.” Then you can interact on a higher order and you benefit from talking to all these like maestro and guys. I’m not saying these people are lousy or these people are frauds… although many are in my view. So in that sense, you can actually learn for a fraction of the cost, or maybe like a 10th of the cost and you can start there, you can tinker, you can play around. And if you think, “yeah, maybe this is my thing, maybe designing is my thing. Maybe copywriting is my thing or maybe investing is mine. Maybe coding is my thing.” After you try a little bit, a little bit, this is a tinkering process, then you can decide that I want to put more resources into this thing. I want to double down on it and potentially it can become my career, it can become my side hustle, it can become my thing. 

That is beautiful and amazing, but do not let this line of “invest in yourself” then tie you into this whole core circuit to say that “oh yeah. You know invest in yourself is the most secured bla bla bla.” Actually, no. If you think about your marginal increase in your income, if let’s say every year you are growing your income at 5% after you go for this program, or 10% after you go for this program, you’ll think it’s pretty good right? You’ll think “I invested in myself, I’m growing and it’s cool. My income is growing.” But actually you could take the same set of money and put it into another stock, like Facebook or Tencent, WeChat, whatever… not recommending here. And they are growing at 25% top line year on year. You are only growing at 5%, 10%! If you think about it, and also a lot of course success rates are very low. So this is my first point, essentially a lot of people when they hear this line of investing in yourself, they have this mesmerization that it is the most secured, it is the best, I should just invest myself. But actually it is just their way of getting you to take out money to invest in them, so that you buy their course.

Which brings me to point number two and that is to love yourself. Grow, explore, live your life, you are not an investment. Period. I have a lot to say about this, but we’ll come back after a word from our sponsor. 

This is a more interesting point in a sense that I find it extremely problematic when people see themselves as an investment, or see their kids as an investment. That’s also extremely problematic. In my view, when you see yourself as an investment or you see your kids as an investment, or you see your friends, your relationships as an investment. My definition of investing is putting capital into something, hoping that this thing will give you more capital into the future. And that is extremely problematic when you see relationships in this manner, when you see your relationship with yourself in this manner. Why do we need to be endlessly more productive? Why do we need to keep creating more and keep improving? Why cannot we just live our lives and explore different things, spend great time with the family and do your thing? 

But that is not to say that if you invest in yourself or you see yourself as an investment, you’re not going to be more productive, you’re not going to be making more money. Yes, probably you will if you have a particular skill set that’s extremely welcomed by the labour market. They really need it and they will price you up, you can command a higher price. If you really become very skilled at something, you will be more productive. You will be able to do more output compared to other people. So I’m not discounting the fact that by investing in yourself, you are going to become more valuable, quote on quote. But why I believe that you shouldn’t see yourself as an investment because you are not a machine.

You are a person and you want to live a great life, right? Because that’s our motto –  Living the life you love while managing your finances. So if you want to live a great life, you got to live like a human. You have to realize that, “Hey, this is who I am, I love myself but I want to grow. So I love where I am, I accept who I am at this moment in time, but I want to grow. I want to improve, I want to try new things, I want to go out there and try. And it’s great! If you see yourself as an investment, when is it ever enough? If you think about it, when is it ever enough? And if it’s never enough, then you are essentially going on this endless circuit of acquiring more and more and more and more, which many people are on this endless circuit of acquiring more and more, thinking that by having more it’s going to solve your problems Is it really the case? Of course this is case by case, but I’m trying to bring you a different way to look at it. 

Don’t treat yourself as an investment. Think about what is enough for you? Where are you now? What do you enjoy and where do you want to go? And if you want to go there, then let’s see what we can do. We can learn new skills, we can grow, we can explore, we can play around. Why not? Why must everything be stuck on this idea of investing? And you realize that I use different vocabulary. I use words like “explore”, I use words like “learn”, I use words like “embrace”, “grow”, and these will give you a lot more definition and clarity in how you treat yourself and how you use certain words to treat different aspects of your life and how you embrace with different things. 

This is really a mindset shift. I don’t want people to think themselves as an investment because I think this drives the whole hustle culture. This drives the whole endless growth and productivity, and it’s very draining, very tiring and people get nowhere. You don’t find a life you love on this endless ride for more. So define what is enough for you, what is the life you can love and then work from there. You can always chase the life you love. I’m not asking you not to do it, but you see what I’m seeing, you shouldn’t see yourself as an investment, learn to love yourself and experience life. 

That’s pretty much what I really want to tell you. I know it’s a little bit different from our usual content today, but I really like to talk about these kinds of things and let me know if you would like me to share with you these kinds of life perspectives, because this will probably help you see life in a different way and that’s kind of where I come from. I didn’t come from a traditional financial background, I really came from this radical, crazy person that went around and try all these different things. A lot of things that I’m sharing with you, I really picked up along the way. This is one thing that irks me a lot. So I hope you see it differently, I hope it benefits you.

Which brings me to point number three of why you shouldn’t invest in yourself. And that is actually investing in others is much easier, it gives you more returns with lesser sweat. Like I’ve said in the front, you think that you are making 5%, 10%, 20% more income, but actually a lot of these big companies, they are growing their top line. If you think of top line revenue growth as like income growth, they’re growing at 25, 30%!

Some of the biggest companies, Facebook, Tencent, Alibaba… not picking stocks here, not recommending. But if you think about it, investing in businesses is really much easier than investing in yourself. Because when you invest in yourself, you are essentially the business. If you are the business, you’re not just putting capital, you’re putting your time, you’re putting your resources, you’re putting your life, you’re putting your network, everything in it. It’s extremely tiring, you don’t know what’s going to happen. And honestly, the hit rate is very, very low. So risk reward tells us that maybe this is not the best way. But I’m not saying that you shouldn’t be an entrepreneur. I’m an entrepreneur and I’m super big on entrepreneurship. I think everybody, if you have an idea or you want to try… hey, do it! But recognize that you’re trying, recognize that you’re experimenting, recognize that you are, dipping your toes in the waters. And not harp onto this idea that “I must make it”, “I must do it”, “I am investing in myself and I need to have capital”, “I need to make sure this is profitable.” So when you do that, it’s extremely unhealthy.

And actually there’s a better way, which is just to invest in others. Invest in other businesses, buy index funds which essentially is an amalgamation of all the businesses in the market. Yeah, you get the idea! So invest in others, invest in businesses. It makes your life much easier and to me that is really how investing should work. I put my money into something and then I hope that it makes me more money. I don’t want to be too active in this process… does not mean I am passive. I have to pick companies or I have to decide which fund to buy and all that stuff. 

In that sense, I put my money somewhere else, it works for me! Why do I need to put that pressure of making more money onto myself? It’s pretty nuts, right? And every time you think of investing in myself, indirectly you’re putting that pressure for profit on yourself. Like it or not, you can touch your heart and ask yourself. Every time people use investments, it’s not for fun. Some people say I’m investing for fun, I’ll say “don’t lie”. When someone says he is investing for fun, they’re just giving themselves some sort of backdoor so that they can leave the stage if shit happens. If their investment fails, they’re trying. It’s okay to try, but don’t kid yourself. Nobody invests for fun. Everybody when they use the word investments they want some sort of returns and they want some sort of growth, like it or not.

So in my view… hey, don’t treat yourself like an investment and invest in other people. Invest in other companies, they can perform so much better with limited sweat for you! 

Thank you for listening to 20 minutes of my rant. I know today is a little bit different and I felt a need to talk about it essentially because recently I’ve been seeing a lot of courses, programs coming up because everybody’s locked down. A lot of these advertisers will start to come up and they’re trying to sell us programs. Like I said, I’m not against courses, not against programs, but I find it extremely problematic when people give themselves a lot of stress in this idea of investing in yourself.

I hope you learnt something useful. I’m going to sum up today, three pointers as to why you shouldn’t invest in yourself. Number one is because most people, when they tell you to invest in yourself, they’re really trying to make money off you. They’re trying to get you to invest in them, buy their programs, buy their books, buy into their ideology and whatnot.

Number two, love yourself, grow, explore, embrace your life. You are not an investment. Investments are supposed to allocate capital into something so that I hope that in the future, it can make more capital for me. But you are you, you are an individual. You’re not a robot, you’re not a cow, you’re not a whatever, not animal, not pigs… some anti-environmentalist or something. But the idea is… you are not an investment, you’re an individual, love yourself. Invest elsewhere, put your money elsewhere. Set your expectations right with the right vocabulary. 

Number three is essentially, investing in others probably gives you a better return with lesser sweat, not so crazy and not so tau tia (Hokkien for “headache”).

And with that, I hope you learned something useful today, see ya!

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I hope you guys enjoyed today’s content. A little bit different, not so technical, very mindsetty, covered a few concepts on how I see life, how I see investments. I think this would be very beneficial for a lot of people because I do see a lot of people always trying to optimize. Everything must optimize, everything trying to make more, make the most. But you know, you’re not fully logical. You have some logical brains but we’re humans, we have emotional aspects and we shouldn’t see ourselves as an investment. We should live our life!

I hope you get a little bit of interesting perspectives today and later this week, I’m going to be spending time with the Providend guys again, CK and Brian. They’re going to come on to talk a little bit about term insurance, which is their pet topic. They’re going to talk about how term is more powerful in their view. How can you use term and investments to form this compound arrangement rather than just directly buying a compound product, which is Whole Life or ILP (Investment-Linked Policy). We’re going to talk about all those things and I think it’s definitely beneficial for everybody. I hope you will continue to stay tuned and learn good stuff. 

Next week I’m going to spend some time with you to talk about FIRE (Financial Independence Retire Early). Recently, I think there’s also some content out there about FIRE and I do have some ideas about FIRE. I’m not totally against FIRE. I think sometimes it’s very extreme, right? Financial independence, retire early. Some people go to extremes to achieve this thing. While I’m not extreme, like a FIRE FIRE kind of person, I do think there’s some basics and some ideas that are great to share and great to expand upon. So we’re going to do that next week. I’m going to share with you some core beliefs to help you FIRE better or just make the journey of financial progress a more fun and palatable one. See ya next week, take care!