Underrated or Overrated – Finance and Investing

Shorter sharper type post. I’m planning on doing an underrated or overrated across a range of topics. First topic? Finance and Investment.

Hoping these will be useful to look back on as well to see how my thoughts change over time. This will also give an insight for others to see what I think of things currently. And why.

Just going to make sure we’re all on the same page here. Important to note that something can be the best in the world yet still be overrated. That’s how over and under ratings work isn’t it? It’ll still be the best but rated higher than what it actually is.

And these are all my own opinions too. I’m not trying to state facts. So your opinions will most likely differ. And that’s cool too.

Note: I’m probably not the most accomplished person to speak on the topic. I’ve only done my undergrad in Accounting and a Masters of Finance. With a smattering of related work in between. So I’m not on the same level of expertise as FinTwit. But I’m going to provide my thoughts anyway! 

I’m extremely interested in investing, so thought it was natural I start with something I love and enjoy.
Let’s get into it.

University Education for Finance Jobs

Overrated

Shows that you can put in the work yes. But doesn’t mean you can do the work or even do it well. Uni provides a lot and has been beneficial yes. But practically the skills learnt are severely lacking.

When I had my brief role at an investment fund (closed for insufficient AUM in case you’re wondering), I learnt more in a week than my whole university education up until that point.

The real world is just that different from a classroom. But to be honest, I’m not quite sure how to prepare students for that though. Maybe a greater emphasis on internships? Either way, I don’t agree a degree is an automatic job qualifier.

Exchange-Traded Funds (ETF’s)

Underrated

If you think overrated I think that is 100% totally justified too. But looking from my perspective I think they’re hugely underrated.

I have a number of mates that have no prior investment experience or retirement planning. ETF’s have been a blessing and a springboard giving them an option to invest globally, diversify, and at a cheap expense ratio!

Especially as an Australian too. We are living so far back in the past compared to the US with so many things. So an investment product that gives us cheap global exposure is a godsend. Which is super useful for the average investor like me.

Zero and Low Commission Brokers

Underrated

Again, if you say overrated I won’t argue with that. But again same as with ETF’s, it just opens so many doors for those wanting to get in on the stock market. Yeah sure, a few may go full Wall Street Bets and blow themselves up. But at least they had the option to.

Previously the fees or forms would have been too high or confusing so that simple commoners like me never would have gotten started.

But with apps like Robinhood and Stake in Australia, more people have access to the stock market than ever before. Trading costs cheaper than a pack of darts. What a time to be alive.

Financial Advisers

Overrated

Touchy, and fair enough if I get some blowback. But when talking about Financial Advisers for average joes and the middle class, I think they’re plenty overrated.

I’d argue most people have basic enough portfolios and not enough capital to justify paying yearly for a financial adviser. Besides, it’s fairly fun and rewarding to control your finances yourself.

However, for those with complex portfolios and the decent capital behind them, I’d say Financial Advisers would be underrated. A lot of that benefit coming from the time and headaches saved. Time is money.

But since the middle-class outnumber the wealthy, I’m going with overrated.

Large Tax Refunds

Overrated

Extremely overrated. I have to admit, I’ve had a couple in my time (such is the nature of casual work). While I agree they feel great, like an end of year bonus. You have to remember you’ve overpaid the government in tax and they’re just giving back to you what’s rightfully yours.

So you wild if you think giving the government an interest-free loan is a good thing. But I agree it’s mentally something hard to overcome.

Crypto

Overrated

Not the Apex character. Sorry. But crypto talk on Twitter on feels like it’s the second coming of Jesus and I’m missing out. I’ll outline in a future post about why I don’t invest in Bitcoin specifically. But a lot I talk about will also apply to crypto in general. Crypto I think in of itself is a pretty neat idea. But overhyped. Hence overrated.

Market Noise

Overrated

Might be self-explanatory, but it is noise. Give me a long term view or give me death.

I think many people though overrate the thought of being connected and up to date with every little detail in the market. Lots of mountains out of molehills. But it doesn’t usually affect my portfolio returns. Short term news doesn’t seem to generate long term profits. So I deem it overrated.

Financial Independence

Underrated

Maybe it’s cause I’m not part of some secret inside joke on Twitter, but I feel everyone is always taking the piss out of those who decide to retire early, aim for financial independence etc.

I don’t know. Maybe I’m just misinterpreting it.

Or maybe it only applies to certain types of financial independence seekers? Those ultra frugal, no kids, live in the wilderness type people? But hey, if people want to do that more power to them! Sounds pretty blissful to me.

Or maybe it’s the way it’s reported on? The publishers make it seem easier than what it is to achieve? I honestly don’t know. So if anyone could shed more light on that, much appreciated.

Either way, I think being financially independent, ie not living week to week on your wage, and being control of your own destiny is massively underrated. 

Real Estate

Overrated

Maybe just me. But I think Real Estate investments are a tad overrated. So much capital tied up with one investment. illiquidity when compared to stocks. Miscellaneous improvements and repairment costs that pop up at all the wrong times.

I do like the ability and ease of access to leverage when purchasing real estate though. Wish I could put down lever up and deposit 20% of a stock investment I was planning on.

But overall just seems like waaaaay too much maintenance and physical work for me when comparing to stock investment. Sorry, overrated.

Starting your own Business

Underrated

Wish I had the balls to do it. It’s a work in progress though. I know the success rates often quoted about starting your own business are quite poor.

But I truly admire those who take risk of going all in and running their own company. That takes not only a lot of courage but sacrifice and energy too. Those are the types of people I look up to and want to model myself on.

Summary

Well, I found this format fun. Planning on doing a few more of these in the future! Hoping at least I explained my points well enough so you can understand my point of view. Also fits in nicely along the style of Visakanv’s 1,000 word vomits of 1,000 words! Off-topic but my goal is to write consistently in order to build a library of work of sorts. And my goal is similar to Visakan’s of 1,000 articles of 1,000 words. Currently, 3% of the way there, let’s go.

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