Because I like to procrastinate, I spend a bit of time on The Reddit. I follow such subreddits as the one that asks celebrities somewhat interesting questions, the one that lets people brag about the volume of their video game collection, and the one that the one that hates cops/Comcast/pro-lifers/anti-gays/Wal-Mart. Oh wait. That last one is all of Reddit, probably because someone over 40 there is about as uncommon as a taxi driver who isn’t trying to rip you off. No wonder Uber is kicking their ass.
I also follow pretty much all of the personal finance and investing subreddits, because apparently those are things I’m interested in. There’s no such thing as a value investing subreddit, so I’m forced to read the opinions of swing traders and morons who think Apple’s earnings are going to be GREAT. It’s cute how people like that think they have an edge.
I also follow both the PersonalFinance and PersonalFinanceCanada subreddits, which will be the focus of this post. Specifically, the PersonalFinanceCanada subreddit, which is where common sense goes to die.
I’m not linking to it, because I don’t want you to ever visit. Here it is in a nutshell:
- How do I get rid of my student loan debt?
- Which bank should I use (spoiler alert! It’s Tangerine!)
- I have $40,000. How do I do Canadian Couch Potato?
- Am I saving enough? (Usually posted by people saving 25-50% of their income)
- How do I invest money for six months?
- Should I ever buy a house? Just kidding. I know only Satan would ever do that
I’m being a little hard on the place, but only slightly. There are thousands of these types of questions, even though they’ve been analyzed and reanalyzed by thousands of people both in that subreddit and in other places.
Of course, this isn’t the subreddit’s fault. It’s just an inanimate object hanging out on a server somewhere. Instead, I’m placing the blame squarely where it belongs, which is back onto the pretentious adult-children that are everywhere these days.
First of all, what a giant waste of time for everyone involved. Instead of realizing that their situation is pretty much the opposite of unique and can be solved with 4 minutes and functioning fingers on Google, the person posting the question decides that they’re special, and need personalized advice.
And then there’s the people with enough spare time on their hands to spend hours of it typing away on a site where they will never possibly see a shred of credit more than some random blog giving a shoutout to u/PM_ME_YOUR_GICS_JUST_KIDDING_I_MEAN_BOOBS. I understand wanting to help out your fellow man, but you might as well be watching TV.
The bigger issue
I’d be willing to bet that many millennials would be more interested in getting financial advice from a place like PersonalFinanceCanada than other sources. Why is this?
- Crowdsourced info is viewed as better
- A distrust of the financial system
- Not wanting to pay for advice
These are legit points. Why pay a fee-only planner $150 per hour to set up a simple index fund portfolio when you can just get someone smarter than you to tell you exactly what to do? Especially if you only have $40,000 in assets?
I’m not disputing that. The issue I have is when a question needs to be asked instead of someone figuring out the solution for themselves.
It’s like when you decide to tackle some home repair that you’ve never done before. Sure, you could call your friend to come over and do it for you, but it’s infinitely more valuable to do it yourself, even if you have to consult wikihow and a couple of Youtube videos. As the expression goes, it’s the journey that’s important, not the destination.
Figuring out financial problems is the same way. Every investor should know exactly why they’re invested in certain assets. If you’re me, it’s because they offer the best tradeoff between risk and return, at least in this guy’s opinion. But maybe your temperament should be all about conserving cash. You really don’t know unless you figure this out for yourself.
How is somebody else supposed to figure out your motivations just from a sentence or two on a website? Besides, it’s pretty easy to say that you’re happy with a lot of risk when your 100% stocks portfolio is rocking it during a bull market.
By figuring out these problems yourself, you learn about little things that will make you a successful investor or budgeter. You’ll learn where your weaknesses lie and how you react to different things. But mostly, you’ll build up your financial muscles, which will take you from guy asking questions for internet points to guy who can figure this stuff out for himself. That’s where you want to end up. And chances are, you won’t get there by asking the internet equivalent of the smart kid for the answer.