2 biggest myths about personal finance

Why do personal finance gurus intentionally keep you poor?

I’m a software developer trainer. I teach people how to program computers to become powerful overseers of the machines. I also accumulated a decent capital and a vast knowledge of personal finance. Part of my journey to financial freedom was following finance gurus. It was a time waste. But since now I’m a teacher, I can give you a personal finance lesson 🤓.

“Cut back on lattes”

I love a good latte. And I buy it as much as I want! Yet, I’m quite successful in the finance department. How is that possible, despite breaking the single first rule of every financial guru?

First, I sorted out fundamentals: job, raises, investments, debt. Finance gurus are crazy about cutting back every single penny. Instead of focusing to earn more to have big wins, to make big moves where it counts, they get distracted.

Cutting a few bucks on coffee doesn’t even make sense from a mathematical perspective. How much are you going to save a year? In Poland, that could be 800PLN, which is less than the minimum monthly wage. Does it make you significantly richer? Saving this $200–$300 a year could make you live off passive income in the next… thousand years.

That made me thinking - how I would use the extra 800PLN a year?

I would buy myself a latte once or twice a week to feel better and achieve more.

That’s what the money is for. That’s why we are trying to be efficient in making money - to buy stuff that makes us feel better or “less bad”.

Or you can always cut back on everything to swim in money when you retire.

“Invest in Bitcoin or stocks (or any other financial instrument)”

Do you know anyone who started with almost nothing and became rich on any of these “100% investments”? The Bitcoin bubble created many more suicides than millionaires. The average stock market return is around -5% a year. Yes, minus 5%! On average, most people are losing money on stocks. Even if we assume that you are experienced trader - could you make over 10% a year consistently? I’m almost certain you couldn’t, but it would still mean that your main source of income is your salary. Unless you inherited some large sum of money that you will sink in the stock market.

Pss… let me tell you a secret. There is a better way to invest your savings, which offers almost unlimited returns.

It’s investing in yourself.

Buy a book. Learn a new language. Go to a coding bootcamp (My bootcamps guarantee you landing a job for over 100,000$ in Silicon Valley! 100% guaranteed!!!). Go to some workshops. Develop soft skills. Any skills in demand. Make yourself more useful to the world.

So far, this has been the most sustainable, efficient and effective way to improve my finances. I’ve double my income every two years, on average. I’ve started from the bottom, earning minimum wage. After years of consistent growth, I’ve entered the top 1% national earners and I still don’t see the ceiling. There are many skills to improve, many ways to become a better person to society.

Focus on big wins instead of small savings. Deliver value to your tribe, improve consistently , and you will never run out of money.

You can lose your job. You can be robbed. Your house can be burned down or collapse. Your country’s economy may collapse. But if you are a high value yourself, if society needs your skills, you will get everything back quickly.

Let’s come back to the main question of the article. Why finance gurus are intentionally keeping you poor? They don’t know how to become rich. They don’t hold any secrets. They have not discovered a repeatable way to success. Most of them became rich by selling books and courses about:

1. How to get rich by cutting back on lattes
2. Reinvesting small savings on the stock market

They never got rich on by of those. Don’t listen to people’s words. Observe their actions. What did the gurus do?

They became proficient at something. In their case, I would say it was mostly marketing themselves as brands.

They put little attention into investing. Usually, they follow a ready template (like 80–20–1) and trends. It feels like their hobby, not a significant source of income.

They don’t rent a flat. Rather, they own it, even if their advice is to “stay free” from commitments and mortgages.

There are many more points to be made, but they all have the same in common. Inconsistency and dishonesty. Their words are disconnected from their acts. Correlation doesn’t mean causation.

Thus, by their fruit, you will recognize them.

Personal finance is simple and difficult at the same time. Financial gurus give us golden recipes that make us feel enlightened, but we still fail at our goals. Focus on big wins instead of small savings. Deliver value to your tribe, improve consistently, and you will never run out of money. Only so much to understand, and so much to do.

Thanks for reading! 😊 If you enjoyed it, share it with your friends! Sharing is caring.

PS Before you question my authority, please remember I’m a professional teacher. You should always listen to teachers 🙃

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