Saturday, 13 August 2016

Naive, a victim or just plain irresponsible

Naive (adjective) – (Of a person or action) showing a lack of experience, wisdom, or judgement. Source
Irresponsible (adjective) - not thinking enough or not worrying about the possible results of what you do.  Source

My work day generally does not afford me a lunch break.  It’s generally scoff a sandwich, but not fast enough to give indigestion, between tasks.  A couple of weeks ago after a particularly rough morning I did however break away and joined the ranks of those at the ‘lunch table’ for a few minutes.  This is normally a place of general chit-chat, of what gadgets people are buying, of the latest sports news, of what people are doing on the weekend, but today in the wake of the BHS pension scandal the topic switched to investments, pensions and retirement plans.

When it comes to saving, investing and retirement planning I am very transparent on this blog but in the office I am the definition of a grey man.  After all an environment where your employer knows you have a decent FU stash or are only a few months from FIRE is hardly one where you are going to be able to ramp earnings at a rapid rate.  So I switched on my spidey sense but didn’t dive in with ‘my view’.

It was then that one of my colleagues, who must be 10 years my senior, stated that he had never bought a share and wouldn’t know how to.  He also advised us that he was also in the company pension default fund, had never logged on to the portal and just looked at the statement each year which showed his private pension would be derisory (he was actually referring to the estimated taxable annual earnings that would come from handing over his pension pot to buy an expensive annuity from the insurance company that was currently charging him excessive expenses).

I just couldn’t leave it there and so made a few choice comments without outing myself.  “I’ve been buying shares, exchange traded funds and mutual funds for a few years now, know how it’s done and have done ok.  I’d be happy to take you through that.  I’ve also completed quite a bit of research on pensions, know that our scheme is expensive and know that there are plenty of other better options out there.  I’d be happy to take you through that as well.  Just come and see me and we’ll spend some time on it.”  By then the topic had lost momentum and we’d moved on.

It’s been a couple of weeks since that conversation took place and I can confirm that my colleague has not approached me about it.  I’m struggling with it a little bit as I don’t like to see people fail and so have been wondering if I should do something about it.  Before I do though I’m trying to think is he irresponsible, a victim or just naive.  I’m coming down on the side of irresponsible, so am leaning towards doing nothing and leaving him to it.


  1. i'm glad i'm not the only one who feels like this!

    i have some absolutely golden nuggets of information regarding investments, diversification, and i have a good ability to explain the complex on simple terms.

    yet people still have zero interest in their own finical lives.

    its my nature to want to help others. But i guess unless you show the trappings of wealth people dont want to listen, which is strange, as surely those who look like hobo's are probably the most money orientated.

    I often find finical advisors are overly optimistic also, with no room for even small holding of gold or cash.

    I am relative junior in my firm, yet the only other individual who has half as depthful insight into investments is the MD.

    Why would your spend your whole life working for money, and then not understand money?

    i dont understand people!

  2. I can perhaps offer an explanation. You have a 'cause' and are very focused on that cause. Speaking from my own experience, there are so many things that fill my days, weeks and months and I have a virtually infinite list of things I want to learn, do or experience. I cannot do them all and I find I get paralysis from this. My days are spent working (very) hard, commuting, spending time with my partner and then about 40 minutes of zone out time at the end of the day so that I can actually get to sleep at night.

    Without a cause, I am far less focused than you are and have a task which I keep putting off to consolidate all the various company pension schemes I've accrued over the years into one and investigate the SIPP angle.

    But where to start? Here would be a good place. At the moment, I'm writing this, I could make a start. But I have to leave the home in 35 minutes to go do something and so I'll put it off till another day. And so it goes...

  3. You've made a sincere offer which has not been taken up. Either he thinks you are boasting beyond your competence, you are trying to con him, investing is just gambling or he doesn't want to put the effort in. I've been far more open with my aims as increasing my income isn't dependant on climbing the greasy pole. Many people admire the FIRE objective none have asked me how.

  4. Many people, for whatever reason, have a complex emotional relationship with money. Otherwise well-balanced, well educated 'normal' people really do struggle with personal finance.

    When I started to do some research into ‘financial dyslexia’, I found it was a major problem for lots of people.

    These are some of the reasons for my book 'DIY Simple Investing'.

    Just accept that you are the exception...maybe one day your colleague will stumble upon your blog and have a 'light bulb' moment!

    As the ancient saying goes..'when the pupil is ready to learn, the teacher will be found'.

  5. I am a newbie to the world of FI and DIY investing and currently doing some research on the following two points. It looks like there are some good samaritan's (RIT and the readers) offering help so any suggestion on the below points will be greatly appreciated.
    1. I have already rectified my mistake of sticking with the default company pension fund for many years and the past and new money is now in index trackers. If I plan to consolidate and move into a DIY platform SIPP then is there a good way to invest lumpsum into new SIPP? Lets say a £50k pot should be invested immediately in the new SIPP funds that I decide on or drip feed over 3,6,12... months. I am 37 years old so this money will stay invested for a good amount of time.
    2. The difference in charges in the company pension vs SIPP has become a lot better with the move to trackers but at what point will it make sense for me to move from old company pension to a DIY platform SIPP. Is a 0.20% on a £50k pot good enough for (currently unknown risks & hassle) of moving? I guess I will need run through a few concepts through like Present value of money and then it will be a matter of personal choice vs the risks involved but I am trying to ascertain the risks involved so that I can make a decision. Thank you - ASingh

    1. Vanguard has an interesting study comparing investing a large sum all at once or spreading over a certain period. First hit when you Google for 'vanguard lump sum investing'; it is a PDF.

    2. @ASingh
      Assuming you are in the UK...
      Does the company scheme match your contributions up to a certain level? If so this is valuable so think hard before moving away from such a generous offer, even for 0.20% less in fees.
      You can still use a SIPP to top-up above the level of company matching contributions & upto the tax limits (for tax limits see

    3. My original inclination was for drip feed but your suggested study indeed has made me think again - thank you very much. I have been doing a bit more research since my original post so it looks like I do have some thoughts on how I want to proceed. Thanks once again. Asingh

  6. I share your passion / frustration, but I strongly feel that people should be responsible for their own lives. i.e. if your colleague wants advice, he now knows that he can ask for it.

  7. The Defined Benefit pension era allowed people not to think much about money without their usually coming to much harm, especially as much of their otherwise investable cash went on housing.

    And so it was that I paid little heed until I'd turned forty.

    All is different now.

  8. You just have to accept that other people have radically different world views from you and some of them are just plain misoncieved

    It takes two views to make a market after all

  9. "It takes two views to make a market after all,"

    Such a great phrase, thanks for sharing!

  10. > My work day generally does not afford me a lunch break.

    Where an adult worker’s daily working time is more than six hours, he is entitled to a rest break. ... uninterrupted period of not less than 20 minutes ...

  11. The story sounds like you provided unsought advice... no surprise he has not approached you...
    you dont know all circumstances of this person life... maybe he is rich or expecting inheritance...

  12. I am 80 years old and took retirement after 35 years of corporate, academic and military experience. I can assure you that your experience with the novice associate is typical. Do not fret and do not bring up the subject again. If he wants help he will ask.

  13. Hi RIT
    I agree with the others who are of the view that you do not say anything - if he wants help, he knows where to go.

    I have dropped numerous hints to friends and colleagues about saving/investing but they still don't think about it seriously enough to ask me in detail what I'm doing.

    When they do, I will tell them what I'm doing but until then, all I say is that I'm 'saving'.

  14. Hi RIT,
    AS with the others above - you have dropped the hint and he hasnt taken it - walk away. They need to take the responsibility for it. I've had a number of open discussions with people - not anything serious initially, but about retirement and planning etc - only one person has ever talked further - and to his credit he has done something about it and is thankful for the support and discussion. Dont push it - if he wants the help he will ask.

  15. Let him come back to you. In my experience, the few people have come back to get more info but they were the 'first job/first pension' category.
    This proves that education is missing - whether at school, university, work - something needs to be done to enable them to do the most with their money/contributions.

  16. "have been wondering if I should do something about it."
    No, you shouldn't.
    I made that mistake once by being too keen to help a financially illiterate coworker. It's useless. They will not learn anything from it, and the best you can hope for is some mildly condescending ribbing on being a "financial genius". They will also want to know if you've lost any money each time a market downturn (of course for them market = FTSE 100) makes it into mainstream news.

  17. keep being the grey man. only one or two of my close friends know that i'm not struggling financially because i drive and old car have threadbare carpets and give the general outward appearance of being short of money.

  18. I've decided to be more open with friends, and discuss FIRE (too) frequently. I suspect many think I have a silver spoon, with my public school education and all, not really understanding the tradition of frugality in my family. I think I've earned less than most of them (apart from 2 glorious years contracting), but just haven't spent it.

    I don't think they think any less of me for my scruffy appearance, but that's why they are my friends.

    Work colleagues have no idea.

  19. He'd only blame you when the market went down, some people are really quite happy to be victims in this world.

  20. I've always been good with money and have been FI for the majority of my adult life, although with few outward signs of obvious wealth.

    In that time I've given a few pointers to close friends and family that could help markedly improve their long term finances and help achieve, if not FI, then at least much more robust personal finances. Few have ever listened much, if at all.

    I've one friend who's a high earner and usually a very sensible guy. I've explained a few things such as how he could cut his tax bill with pension contributions and help protect the long term purchasing power of his cash savings. The usual stuff. Usually, whenever he seems me after he's noticed shares have taken a tumble he asks me when I'll run out of money and be scratching around for a job. I don't tell him, and he probably wouldn't believe, that since he first began asking me this my net worth has risen by 50% even though I've not done a single day's work. I'm sure others seem to think I'm scraping along, thinking "where did it all go wrong", and would be utterly shocked to see my spreadsheet totals.

    One person took heed of my suggestions to take control and with some guidance have completely transformed their own prospects for early FI.

    I now don't offer any unprompted advice to anyone and think that's the best approach. We have different lives to lead and it's not my job to shape theirs for them.

  21. Be careful with advice.

    I am 85% FI and recently disclosed this to my friends. Most people were pretty shocked that I planned to retire in 2 years at 42 and just said "oh, but I could never do that" even though they were in a better situation than myself. One person who was interested asked me how he could do the same. I told him save at least half your income and invest often. He's doing the first part well, but the second part is a disaster. He's convinced himself that Elon Musk is the future, and is pouring everything he has into Tesla/SolarCity. I tell him this is not a good idea, but he insists he thinks this is all the future. Another factor here is greed, he isn't willing to wait 10 years, he wants his retirement in half that time.

  22. I've been in this scenario many times. I think the reasons are many: inertia, fear of the future or looking like a fool, embarrassment over discussing financials with a peer, disbelief that you are qualified. It's easy to be an ostrich over money and takes someone really courageous and committed to accept the offer of help. Very few do.

    1. We have lived as a one income household all our lives because my good lady was unable to work for health reasons. We were very young parents.
      I do okay now....but it was tough in our 20's and 30's as we brought the children up. But we were lucky with our parents and in laws were always there to help in those special things we could not afford eg round to mum's for big Christmas lunches we never went without treats.
      My savings kicked in my mid 30's and were to buy the one thing everyone told me money could not buy.....all I wanted was time.
      In my late 40's I am now FIRE....I will continue to 50 because of some pension options, I will then 'retire'.

      But in answer to you question.....people who do not dedicate themselves to saving very very hard will make excuses. They don't want to know what you know.....because it may mean they were wrong.

      My brother spends all his money and I like him. He never moans about it, he likes his top of the range technology and he loves his expensive holidays and business class flights. That's what his money is for....and who I am to say that's wrong. But at least he knows his options and he has happily made his choice.

      But I know others who never have money and moan all the time. They I hear they earn more than me....and I have no idea where it goes. But the last thing they want to hear is how wasteful they have been.

      Your offer was more than enough....I would leave it there.


  23. There is a fear factor to take into consideration that causes others to be irrational. I read somewhere that money is a bigger taboo topic with men than testicular cancer. We need to find ways of braking the money taboo.