Today I’m going to take a break from my usual topics (investing, money, saving, being a stay-at-home dad, etc), and talk about something that’s been bothering me lately: Blogging.
Like many people, I was an avid reader of blogs before I ever decided to write a blog myself. Over a decade before financial independence blogs became a thing, I was reading blogs about building incredible machines, investing in stocks, travel around the world, and mastering the art of frugal cooking.
These days, I’ve added more financial independence blogs into the mix. Partly so I can learn from the personal finance community, and partly because these are people like me. Kindred spirits if you will.
There are a ton of great FI bloggers out there — from all walks of life and all income levels. I read lots of them. These bloggers share their unique perspectives on achieving financial independence, investing, frugality, and personal finance.
Unfortunately, I’ve noticed a certain arrogance creeping into certain FI blogs, and it rubs me the wrong way.
What arrogance am I talking about?
Personal finance bloggers are (of course) focused on money. Some of them have a lot of it. All this money just feeds the arrogance monster.
Don’t get me wrong — Many personal finance bloggers are good people. They’re trying to pay off debt, save, and improve their lives (while blogging about it). I’m totally fine with these guys (and gals). What they’re striving for is admirable.
It’s the bloggers with the most money that let it go to their heads. They appear to believe their wealth is the direct result of having greater intelligence than everyone else. At least they write that way.
I get it though — Personal finance bloggers want to sound like authorities on the subject of wealth and investing. According to classic psychology research, people follow authorities… and there’s nothing a blogger wants more than followers…
“I’m an authority, so buy my book and follow my blog!”
“I can teach you to be a great investor, so sign up for my investing seminar!”
“All this stuff I use is really cool, go buy some of it!”
Pretty standard guru stuff actually. Unfortunately, these “authorities” use their blogs as platforms to tell everyone else how to invest.
“You should invest like I do to become wealthy. All the other books on investing are wrong.”
“Only invest in total market index funds or rental properties. It’s the only proven way to build wealth.”
As if there was only one way to achieve financial independence!
I call this the arrogance of wealth — Having wealth does not make you a more intelligent person or a better investor. Your wealth may not actually have anything to do with how smart you are.
Think about it — many of the world’s most intelligent scientists and inventors are NOT multi-millionaires.
Shuji Nakamura is a perfect example. He’s an inventor from Japan who won a nobel prize and changed the world. He holds over 100 patents, and is the inventor of blue and white LEDs we use everywhere today.
What did Mr. Nakamura receive for this incredible invention that made hundreds of millions of dollars for his employer? A $180 bonus. In disgust, Nakamura left his employer and later sued them.
I’ll say it again — Intelligence and wealth are not perfectly correlated concepts.
Your Investment Returns Are Probably Just Luck
These days, many bloggers are reaching 1 million dollars in their mid-30’s and saying “I’m retiring from full-time work! Woohoo!”.
That’s great, but I think it’s important to point out they’re doing this at the top of the market… after 9 years of unprecedented market gains!
Frankly, everybody is doing well right now! — 1 in 20 Americans are now millionaires.
I would also like to point-out that a big chunk of those gains have come from PE expansion.
PE expansion is what happens when the Price to Earnings ratio rises because investors are willing to bid up the price for exactly the same thing. When stock prices rise faster than earnings, the PE ratio expands.
In other words, this financial success is hardly the result of a special skill or unique investing ability. Your just aong for the ride.
Most market investors are simply individuals putting down money at continuously higher prices in the hope that the market will continue to go up further.
For the last nine years or so, it has.
When The House Of Cards Tumbles
Think it’s not luck? Maybe you should look at the the research — According to studies of global equity market returns, U.S. market returns are actually an anomaly. Markets do not forever march to infinity in a straight line.
War, disease, famine, terrorism, genocide, poor leadership, environmental destruction, xenophobia, sexism, racism — all these problems with the human condition still exist and one day they will affect our markets again.
Eventually we could see a reversion to the mean — market crashes, bankruptcies, recessions, or even decades of market stagnation.
My blogging peers better pass around the humble pie when it happens. Some might even need to go back to work.
I’m No Different
You’re probably expecting me to say “Here’s how I’m different from everyone else.”
Except that I’m NOT different. My personal belief is that the differences that separate us are actually very small.
I’m just as flawed, arrogant, and stupid as the next person. I’m also very lucky to live in a country experiencing incredible stock market returns during my lifetime. It’s made me wealthy to the tune of $3 million dollars.
So, I say to my fellow bloggers — Be humble. You are not a special super intelligent snowflake.
Not only that, but being humble is an admirable human quality. We should all strive to be more humble… no matter how much money we have or how smart we think we are.
In my opinion, blogging should be a way to share your experience — not as a pulpit to put yourself above others. A blog can also be an incredible way to get instantaneous feedback from a community of like-minded people.
I absolutely love it when I post some of my favorite investing ideas… and get TONs of great feedback from the readers.
That’s really the best part of writing a blog — The community that comes along with it.
Do you find financial bloggers to be arrogant? I’d love to know in the comments.
[Image Credit: Flickr]