I’m not sure if you noticed but I made a pretty big claim in my last post:
This brings us to one of the great taboos of personal finance which is that most people are self-sabotaging.
This inconvenient truth gets swept under the carpet in the earnest and somewhat prissy tone adopted in most personal finance content.
This is a view that you don’t often see expressed in mainstream media coverage of personal finance. Quite the opposite…the implicit assumption is that we’re all hard-pressed working families, everyone is a sensible saver and no one is pissing their money away on ridiculous spending.
That’s a nice assumption (nice as in polite) but one which bears no relationship to the real world. That’s because self-sabotage is a thing and I put it to you, dear reader, that most people are self-sabotaging to some extent (although not you, obviously).
Let’s start with some small examples. When I see someone sitting in a parked car with the engine idling, burning money as they go nowhere, I see self-sabotage. When I read that about a third of food is thrown away uneaten, I see self-sabotage. When I see an obese person with knee problems, I see self-sabotage. And whenever I see people complaining (but not taking action) I see self-sabotage.
Are those examples too small for you? Well, stuff like that matters because of the incredibly powerful effect of The Aggregation of Marginal Gains. In forward gear, this propels you into The Sunlit Uplands of Wealth Creation. But in reverse gear, you end up dodging turds in The Septic Tank of Mediocrity.
If you’d like a bigger example of self-sabotage, how does burning down your own house sound to you?
I was once shown around a housing estate in Manchester. The estate was said to be one of the most deprived in Britain. Before we got there, we’d heard horror stories about drug addicts, shootings, arson attacks etc. I’d imagined some sort of urban hell with brutally alienating 1960s concrete tower blocks.
When we arrived, I was surprised by what I saw. The 2 storey houses were new(ish), they looked well built, attractive with plenty of green space. They were roomier than the 2 up, 2 down terraced house I was living in at the time.
Yet all was not well on that estate. Several of the houses were burnt out. The managers who showed us around explained that this had been done by the tenants themselves. The tenants would take drugs, get high, burn some furniture etc etc and things would get out of hand.
The issue here was not the buildings or infrastructure (which was actually very good). The issue was the tenants. Sometimes they sabotaged themselves, sometimes they sabotaged each other. But the biggest problems faced by the tenants did not come from outside causes (e.g. evil corporations / incompetent politicians) they came from their own behaviour. Most problems on the estate arose from the thought processes of the people living there.
The Escape Artist does not claim to have easy answers to social problems that may have run for generations and have multiple causes. Magic wands only exist in fairy stories and socialist manifestos. My point is that people can be self-destructive and this happens in a variety of ways.
I’m not saying that self-sabotage is always conscious and deliberate: its more often sub-conscious. Often the causes are deep rooted and go all the way back to childhood upbringing. But I am saying that self-sabotage and general clownery are everywhere once you know what you’re looking for.
We all do it to one extent or another. I’m currently struggling to get this article written as I have a hangover. Yesterday I was floundering around trying to find my house keys, wondering at my own idiocy for not having a set place to keep them. I could list other ways that I’ve self-sabotaged but I only have ~1,500 words to play with here.
Back in the old days we had religion to remind us of the realities of human nature. Every Sunday, religion reminded us that we all fuck up on a regular basis. Christianity was built around the idea of humans as sinners, trying to help each other to get better. The church provided a support structure (e.g. get togethers, regular confessions) to help us try to improve our lame behaviours and overcome our self-destructive tendencies.
Over time, religion faded in The West. Then we got the internet and now we have a bunch of monkeys on social media trying to outdo each other on the virtue-signalling…who can share the cutest puppy photos and the trendiest political causes. Everyone is a saint on the internet. Its utter horseshit of course.
To be human is to screw up from time to time if we’re lucky (or wise) and screw up all the time if we’re not.
Why am I telling you this? It’s not to make anyone feel guilty. It’s actually pretty re-assuring to know that everyone else is fucking up as well and that it’s not that hard to be better than average.
Awareness is the first step towards change. So let’s have a look at some forms of self-sabotage that impact people’s finances:
Where would I even start? Smoking, strip clubs, drugs, bottled water, pre-ripped jeans, designer toilet seats, SUV’s, payday loans…all forms of self-sabotage.
Why would anyone trade decades of their life for a shiny metal object (sometimes known as a car)? Lack of financial savvy (bad maths) could be one reason. Consumerism is obviously another. The inability to defer gratification is another.
Here’s the strange thing: a lot of big spenders know on some level that they’re behaving irrationally but do it anyway. Perhaps they associate money with problems or with greed and so act in a way that removes the surplus money from their life?
You need to understand your money blueprint. To get to financial independence, your beliefs, thoughts, feelings and actions must be aligned (congruent). If you have any guilt or shame about having money, you will find ways to remove it from your life. That’s self-sabotage.
Good investing takes patience. As Warren Buffet says, you can’t have a baby in one month by getting 9 women pregnant (fun though it may be to try).
I found it hilarious that even Financial Independence discussion groups on Facebook, Reddit etc became polluted by the bitcoin bubble a few months ago.
People who read endless blogs about financial independence, long term investing etc fell for the latest pump and dump scheme like teenage boys getting fleeced in a strip club. Why didn’t anyone tell us that bitcoin was stupid? Oh wait, they did.
I now meet people that sheepishly admit to me that they got sucked up in the crypto-currency thing and now can’t bring themselves to sell, take the loss and move on. But that’s just compounding the original mistake.
A lot of FIers are smart but quirky. Often we’re introverts (The Escape Artist is INTJ). Introversion can be a super-power in that you’re not overly influenced by what the other monkeys around you are doing.
But, like anything taken to extremes, introversion can be damaging. Introverts often miss out on valuable opportunities which involve co-operating with other people.
Introverts can also fall into the trap of isolating themselves and not reaching out for help. That’s a big mistake : no one has all the answers by themselves.
You see a lot of bitterness in comments on the internet.
Bitterness can look worldly (even smart) at first glance. But bitterness comes from the denial of past failure. We all strike out from time to time but people who are bitter have never processed their failure and moved on. We all have a giant toddler inside us that wants to sulk when things don’t go their way. Don’t let the toddler win.
A lot of FIers pride themselves on their scepticism. That’s great, just don’t cross the line into cynicism. Remember: when it comes to personal finance, you create your own reality.
The Victim mentality
There are no rich victims.
Victims blame the government, they blame their employer, they blame society, they blame their partner, they blame their parents. It’s always someone else or something else that is to blame.
Victimhood is now being actively marketed with a huge political and media push behind it. Identity politics divides people into groups as victims and oppressors. Did I mention that its all horseshit? Yes, I think I did.
Before I started this blog, I had no idea just how much people procrastinate. Now I get a ton of emails from people revealing that procrastination is their weakness and their guilty displeasure.
Procrastination is sometimes dressed up as perfectionism (if it isn’t 100% correct, I’ll do nothing) but its caused by fear…particularly fear of failure. We prefer to say we haven’t yet tried than to try and fail.
We’re often embarrassed about our fears so we pretend they don’t exist. But, make no mistake, procrastination is about fear.
Remember : getting your finances in shape is an emergency. Procrastinating over which fire extinguisher to use is not a good idea when your house is burning down.
British people love grumbling and complaining. It’s one of our national pastimes. Like all vices, it can feel fun in moderation but there’s a hidden cost to be paid. Complaining is like spraying yourself with money repellent.
By complaining but not taking action, we give energy and attention to the thing that we think is wrong. We exaggerate it and make ourselves miserable. And, because people naturally tend to hang around other people like them, if you’re a complainer you’ll find yourself surrounded by other complainers. That’s not a winning formula.
I’m not saying that everyone can reach FI if only they’d stop complaining. Luck plays a big part in life and we have social security safety nets for good reasons. Life is often unfair…as it always has been: the universe does not run based on our quaint ideas of fairness. Was it fair that Rome fell to the barbarians or that the dinosaurs went extinct?
My point is just that getting to financial independence is hard enough without aiming a gun at your own foot and pulling the trigger.
Now…where did I put my beer?