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For those who have never heard of the Dutch horror film, “The Human Centipede,” which inspired this post, a brief synopsis is in order:

A deranged surgeon has an odd desire to simulate the segmentations of a centipede using human substitutes.

In essence, 3 unlucky individuals were interconnected by being sown in a mouth to anus type configuration.

The head of the centipede, considered to be the “luckiest” of the group would be the member who would ingest food that would subsequently go through his alimentary canal and directly into the middle segment who would repeat the process for the last segment.

It’s a toss up on which remaining segment you think has it worse.

Thanks Xrayvsn!   You just ruined my meal!

I just came here to read about personal finance.

Why on Earth would you bring up that kind of mental imagery? 

Great question.

I shall explain.

Personal finance is personal.

Such a simple statement but it is so profound on so many levels.

It therefore behooves you to pay attention to it.

The head of the centipede.

It is easy to get caught up in the moment when reading personal finance blogs and books.

There will be authors of said media that will extol how successful they have become by using such and such technique and therefore you should follow what worked for them verbatim.

The problem is that the solution that worked for them may not necessarily work for you.

Likewise, there are things that would be perfectly reasonable to incorporate into your financial plan but would seem ludicrous for someone else to implement:

If hypothetical Investor A told you that 100% of his investment portfolio was in Bitcoin, would you think he was a fool?

How would your opinion change if I provided some background information that Investor A was a trust fund baby who will receive $250k/yr for the rest of his life?

It certainly would completely flip my initial stance of his Bitcoin play.

Hell, he could invest it all in beanie babies and tulip bulbs and still be set for life.

You certainly do not want to relegate yourself to the second or third segment of the centipede and just be force fed whatever any financial guru happens to be eating.

It is so easy to read about someone who has made his or her money in real estate and come to the conclusion that real estate is the only way to go and reject everything else.

Likewise if all you are consuming is information in the echo chamber of Index Funders, then you may come to a completely different conclusion.

As much as I like to think the personal finance advice I have given in this blog is helpful, it is mainly meant to be a case example of what can still be accomplished from a self-professed “I made every mistake in the book” individual.

My words are meant to inspire but were certainly not meant to be taken as your personal finance gospel.

I get it now, Xrayvsn!

I do not want to be the middle or end of a financial centipede.

So you are saying I should not listen to or read any of the works from these financial gurus, right?

No, that is not what I hope the take home message of this post is.

First, I would hate to lose you as a reader.

Second, I think more harm than good would come from shunning financial advice from the mainstays in this space.

How to  metamorphosize into a financial butterfly.

I wish the movie was called Human Caterpillar because it would make far more zoological sense to go from a caterpillar into a butterfly.

But alas it is what it is so I am forced to take liberties here and invoke cross-species analogies.

Increase your knowledge base.

The financial centipede scenario can be thwarted by first trying to expose yourself to as much information as possible.

Just like signing informed consent, it is important to fully understand the risks, benefits, and alternative options available.

This is your best weapon against the echo chamber phenomenon.

That is why I particularly enjoy articles/discussions that are contrary to my own thoughts.

The contrarians have already done the work for you and have poked holes and exposed the weaknesses in whatever investing philosophy they happen to be attacking.

Like real estate?

Well then read articles of people who are naysayers about real estate.

Find your tribe.

This may seem like a direct contradiction to what I said about personal finance being personal.

Granted, the odds that you will find an individual to follow that is in your exact life scenario is infinitesimally small.

That does not mean you cannot gain benefits from finding a group of like-minded individuals in a similar social circle.

If you are a high income physician, reading articles intended for lower income individuals may be low yield compared to reading articles in a niche that better suits your circumstances.

The converse is also true in that an individual with a low income may not find any information fruitful in a blog geared towards high income earners.

The best example of this is what people consider “living frugal.”

A physician’s household may be considered to live frugal and still spend low 6 figures a year.

Last year I spent a little over $120k in living expenses and think I live an extremely frugal lifestyle despite the fact that this amount is double the median income in the US.

Everything is all relative.

The highest yield information you can gain is thus from individuals with similar educational background/profession, age, and even marital status/amount of children.

There is a famous quote by Teddy Roosevelt stating that comparison is the thief of joy, which it certainly can be.

However, there are benefits in seeing how you compare with your own cohort so you can adjust accordingly.

 

Note:

If you are in search of financial help, please consider enlisting the service of any of the sponsors of this blog who I feel are part of the “good guys and gals of finance.”

Even a steadfast DIY’er can sometimes gain benefit from the occasional professional input.

 

 

-Xrayvsn