Let’s have a fun exercise!
Especially if you have studied Finance at tertiary level – Poly or University; or working in Finance in the corporate world.
If you are not Financially trained, you may want to play this exercise with your Financially trained friends, colleagues, or neighbours.
Warning: Must choose your playmate carefully OK? Wait they punch you I not responsible hor!
In you day job, you make analysis like whether it’s better to buy or lease an equipment.
When you bought your car, did you do the same analysis?
You know, whether it’s better to rent/lease your car over buying?
As a newly minted accountant, you scored brownie points by proposing to your Board of Directors and CEO that it’s good, better, best to sell the building your company owns to a REIT, and lease it back for 20 years. This way, you can monetise the capital gains in this asset sale (pump up the EPS – shareholders happy; CEO happy) and re-deploy the cash into projects with higher Internal Rate of Return.
(Your CFO is sweating bullets soon you may usurp his job!)
Now back home, your dad asks you whether it makes sense to sell the remainder of his HDB lease to HDB so he can monetise the asset value to pay for his retirement, what would you the accountant do?
Proof of the pudding is in the eating
The answers are not important. Everyone is entitled to their opinions.
Notice I italic the words do?
I didn’t use the word say.
What I am after is whether these financially trained individuals practice what they have been trained or taught?
Did they do an analysis first (like in their day job), or did they straight away acted/say out their bias?
Q1. Why do you think we act one way in corporate life and do the complete opposite in our private lives?
Q2. If the same people who have spent 3-4 years getting their Finance diplomas or degrees behave like that, do you still think Financial Literacy can be taught?
(Please don’t be so serious; its just a rhetorical question. And it’s Friday!)
Singapore Man of Leisure (welcome to my blog; just google it!)