22 Mar 2016

So Much Ado About Privacy: Keeping Your 'Personal' Finance Private


Isn't it ironical that I live in a house where the bathroom has no lock yet there is a lock on my phone?

Since I have known my dad, he has never locked his bedroom door either when around or away, and that left a strong impression on me growing up, and even till now.

Sir Tim Berners-Lee, the inventor of the World Wide Web (WWW), recently called for a new model for privacy on the web, whereby people are the legal owners of their data and have full control over how it is used.

Also recently, the media has been awash with the news of the FBI trying to force Apple to unlock the iPhone of a domestic terrorist, for national security reasons.

And I think about the privacy of our finances too in light of all these- whether it is in our interest to keep our finances private. That is what this blog post is about.

What is privacy? Does a lack of privacy in our lives necessarily impact on our transparency and truth...positively or negatively? Or does the right to privacy help us to build a stronger character and really know our limits (as our secrets remain secret)?

Is your (personal) finance really private? Do you have full control over it?

The truth is that many of us want to make more money, eternally if possible. And because of this, many do not mind at all handing over their finances; income/salary/savings/budget, etc, to a financial guru who can 'expertly manage it', giving 20% or more year-on-year growth. In fact, we will be more than glad, grateful to have such a  person take control of our finances on our behalf- as long as the growth is assured and consistent.

Why get-rich-quick schemes always spring up
Have you ever been bothered about the numerous fraudulent schemes around...especially as those schemes always have people subscribing to them, even with their retirement savings?

Inherent in every human is the need to know and control the future. But without enough money, the future (and also the present) looks uncertain. We feel helpless and insecure. Whenever people 'feel' that the power to create wealth is so high and beyond their reach, they become susceptible to get-rich-quick schemes. [It is very ok to be tempted.]

Many times, it is not greed that makes people lose/give up 'privacy' of their personal finance to financial con artists and get-rich-quick schemers, it is fear.

The emotion of Greed and Fear controls the world of Finance
In the finance world, those two emotions are the principal predominantly controlling factors. When you hear risk or reward, loss or profit, they mean fear or greed.

Let me quote Nassim Nicholas Taleb from his bestseller The Black Swan (Chapter 19 on Half and Half....): "Half the time I am hyperconservative..., the other half I am hyperaggressive. I worry less about advertised and sensational risks, more about the vicious hidden ones. I worry less about terrorism than about diabetes.... I worry less about embarrassment than about missing an opportunity."

When people ask me for investment advice
Occasionally, I get calls from readers of this blog, and from friends for advice on what to invest in. Some ask about Forex, Binary options, sports betting, others about Credicoins and entrepreneurship.

Someone asked me recently, "I have saved N2million Siji, what should I invest in?"

My usual response is "Invest in yourself, and in something you are passionate enough about to learn all you can about it. Do not put your money in any investment you do not know anything and/or (are unwilling to learn) everything about."

That is the first rule of Investment.

True investment is not about getting returns- simply for the sake of getting returns. True investment is getting back value for the work, sweat and capital you put in. 

Regardless of how much you make from an investment, if you do not understand it, if it does not add value, and if you are totally helpless, powerless and clueless (about the investment terms, conditions and circumstances) immediately the money leaves your hands, you are simply a gambler/speculator, or a get-rich-quick pratitioner. 

And do not get me wrong or be mistakened: IT IS PERFECTLY OK TO BE A SPECULATOR- the proverbial rich fool. 

There are only very few "investors" in the world, anyway.

In summary
Keep your finances private by being a true investor. But if you cannot (do the hard work of learning, and becoming a true investor), don't sweat it, simply hand over your financial privacy to an investor (who knows his onions). And be content to be a rich fool whose money works hard for them while they sleep.


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