Earlier today, had a zoom session with one of my investing mentees and clients. He thanked me for helping him grow his money, beat inflation, and get one step closer to his financial goals.

But when he told me that, I replied very firmly:

“You need to be more responsible for your own money.”

Now, why did I say that?

Firstly, let me just explain how this meeting came about.

For me personally, I am in the job of teaching people how to invest, giving them the skills and knowledge, mentoring them, and helping them actually become a wiser investor.

At the same time, I’m also investing their money on their behalf to grow it and help them accelerate their journey to their own financial goals.

I actually do meetings with my clients and mentees once a year to make sure I am completely up to date on their financial situation.

After 3 years of working together with me, he actually thanked me and was very grateful that, because of the investments, he has more peace of mind for the future.

However, I told him:

“You need to take more ownership of your money.” 😱

Now, why did I reply in such a firm way?

On the surface, it might seem really rude, but let me explain.

Here’s my take:

90% of people who invest their money are not responsible enough for their money.

Whether you do it on your own... do it through an ETF, do it through an automated solution... or get somebody else to do it for you (which is what I’m doing for some clients and mentees)...

most people, no matter what vehicle they choose, lack ownership over their investments.

1. Getting somebody else to invest for you

There’s a small group of clients who don’t bother to take time to know how their money is being invested.

And while I’ve been able to produce decent investment returns for them that make them feel satisfied, the issue here is that they treat me like a casino.

In other words, they treat me like some investment "guru" where the money is parked with me, and they have no idea how the money is being invested.

When I say “how the money is being invested,” it means they don’t take time to know:

• What companies I’m invested in for them
• How the companies are doing
• The future prospects of these companies
• Both the good and the bad sides

By the way, I do feel thankful for their trust. At the same time, just trusting somebody blindly without understanding is not responsible.

Because while I can grow it, it's still YOUR own money after all.

2. Investing through ETFs can also be equally "Irresponsible"

The second group of clients whom I’ve been coaching invest in these things called ETFs.

And I was in a similar position more than 10–11 years ago, when I first started getting my feet wet investing in the stock market.

This was me in my early 20s, investing in these things called exchange-traded funds, because I really started learning about this a long time back.

Back then, because I was new, I invested in 2 different ETFs.

I invested in one local ETF called the STI—the Straits Times Index—and the other one was the US S&P 500.

And I did it this way because I just had no idea what I was doing.

So on one hand, when you read all the articles… people say good stuff about the ETFs (it's the top companies in the world, it will go up in the long run, it is broadly diversified)

Blah blah blah...

But to me, here’s my contrarian take:

That is still irresponsible.

Why?

Because most of the time, people who invest in an ETF treat it like a label based on stuff they read online, where ETFs are meant to be safe.

And they just use the label.

But what are the constituents inside the ETF?

How are the businesses performing overall inside the ETF?

And what exactly is the most heavily concentrated sector in the ETF?

Are they aware? Do they take time to go and understand, to at least dig deeper?

Otherwise, even though they are investing in the ETF because it’s meant to be safe and diversified, and it goes up in the long run, that, to me, is still irresponsible.

On the surface, it looks like it’s responsible because, hey, they are investing money here. They’re not keeping it in the bank. That’s responsible.

But no.

An ETF is just a shell that makes them feel secure. But it’s an artificial sense of security as well, because they have no idea what they are truly buying into.

The ETF is nothing other than a black box to them.

3. Buying your own stocks can also be "Irresponsible"

Some investors think they actually have a lot of responsibility for their money because they buy their own stocks.

You can buy things like Tesla, Nvidia, Micron, Facebook, Amazon. on and on.

On one hand, these people are going to think, “Hey, I’m very responsible with my own money.”

But if you still have no idea about the business model, the last 5-10 years of revenues and cash flows, its strengths, and its risks, then investing your own money in an individual stock is no different from gambling.

It’s speculation.

So it’s the same as the guy at the casino who throws money into the pot, thinking he is responsible because at least he’s placing the bets himself instead of having somebody else invest for him.

For example, when I first started investing my own money years ago and buying individual stocks, I invested in many social media and tech stocks because they had growing revenues.

Was I buying my own stocks and doing my own research? Yes!

But was I responsible? NO.

Because I had no real idea about the risks and strengths of these businesses.

It was surface-level, touch and go.

I bought them because they looked strong and dominant on the outside, and seemed to have growing sales and revenue.

But my understanding was superficial.

Ownership has NOTHING to do with whether you are investing your own money, or whether somebody else invests for you.

That’s just a matter of choice and delegation.

Somebody who has another person invest their money 100%, but understands how it’s being invested and also stays updated—to me, that’s responsible.

But somebody who invests their own money 100% and doesn’t understand what they own—to me, that is still irresponsible.

Max