Conscious Youngsters, Kabali Fever & Personal Finance

On the Friday that Kabali released, I was doing my own show — a short talk on Personal Finance for young folks at The Fuller Life!

Obviously, the conversation turned to Kabali and I asked them if they were going to watch it today? Pat came the response from one of the attendees, “Given the cost of a ticket I could easily have a nice dinner, and a bottle of wine to go with it!”

This was an easy decision, both options are fairly straightforward and comparable. In addition, we may have experimented with such decisions in the past, and therefore learned from them.

This brings me to the blog I wrote a fortnight back, about finding “Your M(Money)E3 — Expression, Experiment & Education”.

I was chatting with a friend, and he raised an important question. He asked ‘What if the experiment is run badly and we end up learning the wrong lessons from the experiment?’

Example: Someone tries to experiment with trading in equities, gets lured into the F&O (Futures & Options) market and ends up losing a lot of money. He then blames the equity market for his loss and labels it as speculative.

Although I am convinced that youngsters should experiment with their budgets and investing, this is also a very valid point. I did not find an answer, until I read “Misbehaving”- By Richard H. Thaler.

Quote from the book:

“Psychologists tell us that in order to learn from experience, two ingredients are necessary: frequent practice and immediate feedback. When these conditions are present, such as when we learn to ride a bike or drive a car, we learn, possibly with some mishaps along the way.

“We do small stuff often enough to learn to get it right, but when it comes to choosing a home, a mortgage, or a job, we don’t get much practice or opportunities to learn. And when it comes to saving for retirement, barring reincarnation we do that exactly once.”

I loved the last line in the above paragraph! So here are my thoughts on when to experiment and when to speak to an experienced professional:

For many money decisions the feedback loop is very long and far away in the future. This allows for little or no opportunity to correct the course we take. So, it’s best to hire a professional advisor, or even two, just in case :)

PS: Originally published on