Thursday, November 06, 2008

Trust me

Recently I'm not in a good mood.

I was reflecting on the past mistakes that I had made in life. Not those little ones but the major ones - especially those that involve a considerable monetary loss. I realised that they all share some commonalities. I wanted to share this even though it's a little bordering on my private life, but I think the lessons are important enough so that those who read it will learn not to repeat it. I've been doing quite a bit of reflection as my work start to dwindle down and I am preparing to rest and strategise for the coming year 2009.

The two traits of my major mistakes are:

1. I had been too trusting on others. That is always my weak spot. I am a man of honesty, integrity and fairness (I wanted to add in exceptional in front of honesty - but I thought that I had done some dishonorable things in my life too) and the problem lies when I think that others are the same too. Therein lies the crux of the problem.

2. There are times I didn't do my due diligence and entrusting my responsibilities to others. I believe that it's linked to the first weakness of being too trusting. I mean if you trust someone, wouldn't you believe what that person is saying and that the person is acting in ways that are beneficial to you? I must have had a very romanticized view of the world.




There are countless examples where I had been duped by my own weaknesses. Here's a few scars that I received:

1. When I started investing back in 2006, I believed that brokerage reports are true and accurate. I kept thinking that these analysts are the pros, if they say this and that target price, who am I to dispute that? It is this trust in professionals that I ended up losing a chunk of my capital since I bought solely on brokerage report.

Lesson learnt: Professionals might not know any better than you. Differentiate between opinions and facts. Distill the facts but form the opinions yourself. The moment you find that you are actually transferring your responsibilities to others (i.e. govt, pros, experts, old-bird, experienced etc), stop and take over.


2. I was actually cheated during my uni days. This really scarred me for a very long time. It happened when 2 china folks told me they had lost their luggage and needed to call their families or something. I lent them my phone, after which they told me more sob stories. To cut the story short, I exchanged their phone with mine (because their hp battery is flat), and I even went to draw out some cash for them. To think that my savings account only have $500 and I gave them $150 out of it.

You know, I wouldn't be cheated out of greed. Usually I will be cheated out of sympathy by confidence tricksters (I use 'usually' because there's more than one incident). It takes a lot of courage to face this again as I blogged it out. For quite a long period of time, I was scarred by this.

Lesson learnt: Well, what can I say? Don't be so trusting. But it's hard to make a balance - too trusting you can cheated, too skeptical and you'll be a cynic. Still trying to sort out this.


3. My first insurance agent created a hell lot of job for me, because I was trying to undo some of the stuff that I was sold earlier. I won't push all the blame to him, because seriously, at that time if you asked me what's the interest rate on savings accounts, or what is the difference between term and whole life plans, I wouldn't know. On the contrary, because of my obvious lack of knowledge in this area, I had went to open a brokerage account with a friend in order to find out more. Well, everything falls into place and soon I started a blog and got very interested in personal finance too.

Lessons learnt: This is one of the hard lessons that I do not mind spending. Without the hard jolt of feeling something is wrong with my policies, I wouldn't be forced to do something about this aspects of my life and a lot of things you're reading now wouldn't come into place. I guess the most important lessons here is not to wallow in sorrow. ALWAYS do something positive and learn from your mistakes.

Fool me once, it's your shame. Fool me twice, it's my shame.

14 comments :

paul said...

heya,

i think this is a very nice post. we all make mistakes before and what doesn't destroy us, makes us.

From where i'm looking now, you're doing a great job with ur blog, and ur finance life.

i'll keep readin. :)

Anonymous said...

Most of the analysts are young and have only the paper CFA qualification but with limited real live or first hand experiences in the industry of the companies that they write about.

Many also do not have or have limited audit experiences which make them too trusting on the contents of the company annual report without knowing that accounting is an art and that a set of figures can be presented in many different ways.

The fortunate thing for you is that you are making these "mistakes" when you are young. So you have ample time to learn from them.

Treat your losses as tuition fees and I am sure you will do very well in the future.

Best wishes,

ICAEW

PanzerGrenadier said...

Hi La Papillion

It's all right to learn from mistakes. I continue to make mistakes in personal finance and continue to learn from them. ;-)

I also got cheated by timeshare before. That was long before I was wiser to the world of investments and what is a want vs a need.

Life is a learning process. After reading "The Black Swan" by Nicholas Nassim Taleb, I realise the important thing is to avoid being wiped out by a single catastrophic event. We can make small mistakes because we can survive but the one single negative black swan is the one to avoid.

So far, a healthy scepticism has kept me financially alive as well as a financially conservative streak I inherited from my mother.

But in other areas, e.g. relationships, I am still trying to learn as I've also made major bloopers.

It's all right to have flaws. We are all human.

:-)

Be well and prosper!

Barbara said...

I failed to find your e-mail or contact form, so I'm writing here.
I promote a website devoted to credit cards. I'm interested in adverising on your blog. Do you write paid posts? How much does it cost?
Please, contact me barbaraminer74@gmail.com

Anonymous said...

Hello La Pap,

Tot I swung by this evening and saw this post.Tks for sharing....

This trusting thing of yours is good to have. Don't lose it because of skeptism.

If a person chooses to cheat me of a small amount, I only thank goodness that such a small amount can tell me LOTS about his character.

Over time, you will find that as you get older, the things ppe. will do just for money will amaze you. It is sad indeed, but it is a fact of life.

Money itself is neutral. It is the LOVE OF MONEY thro' unscrupulous ends that causes so much misery in this world. :(

I myself have learnt to still be trusting, but only towards selected few friends whom I have known for ages. The new ones, I still give them my trust, but once they betray it, I will terminate the friendship cos' I feel that my time is valuable and I don't really want to waste it on relationships that is not built on trust :)

Your journey is a path that many have taken, including myself ;). Don't feel bad....

Cheers,
mm

dream said...

lp, I thought the cat photo looks really cute.

la papillion said...

Hi guys,

Thks very much for your kind encouragement :)

It seems that my experience is not unique at all. I shall learn from my lessons and move forward. As mm had said, it's still very impt to be trusting even though it doesn't pay off sometimes :)

PanzerGrenadier said...

La Papillion

To be human is to be affected by human emotions. That is why FEAR and GREED strike at almost every investor and that is why the market can gyrate so much because human beings, after all, can be totally IRRATIONAL. :-)

To be trusting is not wrong. The question is to what degree? I have worked as an auditor before and the phrase, "healthy scepticism" is the concept we try to practice. It is somewhere between knowing that your audit client is pulling a fast one on a material basis for the account or is just trying to window dress a little his accounts.

Many businesses does window dressing, it's the big fast one that makes the accounts not true and not fair that we worry.

But swinging to the other extreme makes a person extremely tiresome. Auditors (and lawyers) can be very irritating they keep asking, "why".... and dun accept explanations easily. ;-)

Grey said...

The cat WeowWwWwW angrily at those who conned it's brother cat!

la papillion said...

Hi PG,

You're right. Both extremes of being too skeptical and too trusting are not healthy.

To find the balance between these two extremes is hard. But I dare say I'm still I trust people generally.

la papillion said...

Hi Grey,

Haha, thks bro cat!

Derek said...

Hi LP,

I too was feeling a little moody reflecting on the ups and downs that happened during the past few years.

Let us not be pulled down by the negative things in life or think of how it could have been better. Life is short - live each day like a brand new day.

Cheers!

la papillion said...

Derek,

You're right. Wondering if you've watched 'Life is beautiful' - a foreign film. It describes a family who sees things in another perspective, despite their circumstances in WW2.

Derek said...

Hi LP,

I never watch the film but I have heard of it. Life is pretty simple, you either choose to lead a happy life or a sad life.

Cheers!