Mini Career Break Report #2: Face the financial fear and do it anyway

I wish I had money to burn.

"You are a curious creature," said my friend R yesterday. "It's as if you want to be a Type B person, but you're constantly in Type A mode instead."

My friend's astute observation came after watching me scurry around to banks, lawyers, rental property and government offices for 7 days. Instead of resting after my two-week Aussie vacation, I decided to do as much as I can so that my remaining 5 weeks would be a breezy one.

As usual, in my zealousness, I've crammed way too many to-do items into my schedule. And almost everything on my to-do list are things I detest/dread doing.

And they are:

Dealing with rental property 

I have a small apartment that earns me $1.8k of rental income a month, but it's by no means passive income. Recently, I got a new batch of tenants and they were complaining about the mess the previous tenant had left behind. 

To my horror, when I went over to inspect the property, I discovered broken furniture, stained mattresses and numerous plumbing an lighting problems. So, I had the stuff hauled away for $350 and engaged my usual Fix-It Man to fix things up. Ouch.

My problem was that I had not done regular inspections to the place so I didn't realise how bad things had gotten.

Also, I didn't have a proper system in place to manage the place. For one (and please don't keel over in shock), I don't even have keys to the apartment or keep a ledger, so I don't know who paid what when.

So I spent a few more days creating a digital system, made copies of the keys and an excel sheet.

Lawyerly stuff. Had some documents certified copied. I generally detest dealing with lawyers in general, but it had to be done, sigh.

Obtain online accounts for my retirement account (Note: I'm not American, so it's not Roth IRA) and mutual fund accounts so that I can better keep track of them. I kept meaning to get the online access but my life had been topsy turvy since 2012 because I moved countries, changed jobs 3x and more. This is the first time in a long while that I could take a breather to do this!

Rebalanced my mutual fund accounts as it had waaaay too much equity investments for my liking. Furthermore, 1/3 of my retirement funds were in mutual funds, and it made me incredibly nervous that they were in high-risk investment vehicles. (In my country, we are allowed to transfer some of our retirement funds to private mutual funds. I discovered, to my dismay, that if I had left my money where it was, it would have netted me way more in dividends.) 

My investments barely rose in the 6 years I've left it in mutual funds, which broke my heart. During some years, I actually LOST money. However,  I think I'm lucky as many people actually ended up losing a lot of money transferring their money to private mutual funds. Why? Well, in my country mutual funds have very high fees - 5%-8% sales charge for the initial investment and 1.1% management fees yearly! 

Fortunately, the government recently released a platform that would allow investors to invest in mutual funds with 0-0.5% sales charge, but I'm now leery of mutual funds as it's far too volatile for me and I hate playing around with my retirement fund income.

Upgrade my medical insurance
My policy is literally 10 years old and it's time to upgrade it!

These squiggly lines might as well be Greek to me!

Doing all this "money stuff" was necessary as I've put it off for far too long, but was extremely stressful for me. In fact, my eczema made an unpleasant reappearance this week after a blissful month of dormancy. -_-.

See, I may be an accomplished "pay off my debt" Queen and I'm awfully good at saving my pennies, but I'm terrible at the investment part of the Financial Independence equation.

Why?

I'm absolutely terrified of investing.

Like "lie awake at night" kind of terrified. Like pop-Xanax-to-relax kind of terror.

I suspect I have financial fear, the kind that is bordering on pathological.

I live in fear of making a financial mistake that would ruin my life.

I relate to the writer of the article, Are You Ready to Finally Let Go of Financial Fear?, when she said:

No matter how much money I had in the bank. I still had foreboding money issues.

See, I may not be a millionaire, but I am debt free, have 2 years' worth of emergency fund, a paid-off home, passive income that will sustain me if I'm out of a job and an okay (though not great) amount in my retirement accounts ... and I still feel like my world is going to collapse any moment. I thought I'd be happy once I got all these sorted out ... but no, I'm still trapped by financial fear. And it's getting fucking frustrating.

My Financial Fear is probably due to several reasons:

• My initial forays into investing have been challenging. My property, for one, had been fraught with legal problems since day 1. If I had a choice, I'd get rid of it to get rid of the bad memories, but the sales tax would rob me of any gains I'd get from selling the place. My mutual funds have also not performed well; I had better luck with cash deposits!
• For too long I let others manage my money. First, it was my parents who insisted I buy property at 23. They did help me with the downpayment, but I wasn't psychologically ready to own property and the complications that came with it. It also ended up ensnaring me in a legal battle that lasted 5 years. Then, it was fund managers who told me what to do, and me, trusting that they knew best, just signed on the dotted line.
• I have no idea what to do to ensure I have a good retirement. Am I on the right track? Am I desperately behind? I have no idea. I want to increase my net worth, but I have no idea how. Much of the information out there is US-based, and it's tough to find good reference material/courses about investing in my country, so I feel like I'm throwing out money in the dark, hoping that it would land somewhere good. (Most of the time, it didn't!)
• I probably inherited my dad's chronic anxiety over finances. I grew up watching my dad fretting over money. He generally had a very fearful approach to finance and setbacks. Once, when he was laid off, he moped around for months, saying that he was afraid of ending up in the poorhouse. The thing was, due to his careful money management, his properties were nearly paid off, he had a pool of emergency funds and to top it all of, he was getting a sizeable government pension. Plus, us kids were already working and independent. Yet, my Dad behaved as if it was the end of the world. Investing? He thinks they are of the devil, so I was repeatedly warned throughout my life against investing in anything other than cash deposits! I really can't blame my dad, however. When he was a young boy, his dad became a drug addict and his family literally went from riches to rags. Growing up that way would have made him very, very cautious and fearful of financial setbacks. Still, I suppose all this had an effect on me and I grew up thinking of money as a fearsome, unfathomable beast that cannot be harnessed.

When it came to investing, I always feel like I'm in the dark, shooting blind.

So, yeah, while some folks actually get excited experimenting with their finances, I pretty much hate it.

And what do I do when I hate doing things? Well, I avoid them.

Over the years, my financial issues just grew and grew and grew and I ended up with lost investments, damaged furniture and sleepless nights.

Denial is not a strategy, folks.

So, I'm over it. I want to banish Financial Fear from my life.


What I'm doing to overcome the fear

1. Study up
Things have improved, education-wise, in my country - so I'm studying the basics of investing in vehicles like REITS, Peer to Peer lending and bonds via blogs and books as much as I can.

2. Get professional advice
Fortunately, the government actually has retirement specialists who can sit down with me to talk about strategy etc. So I hope to get some kind of proper direction and advice on how to increase my retirement savings - I've made an appointment for next Tuesday.

3.  Be informed before I invest
My "investing & hope for the best" strategy, has got to go. I listened far too much to "trusted advisors" and friends because I found the numbers confusing. From now on, I plan to study an investment before even thinking about investing in it.

4. Therapy
Maybe I have some PTSD due to all the financial challenges that my family and I faced throughout the years. I'm not sure how much talk therapy can help, but I have to acknowledge that it has gotten so bad that my health is affected because I ruminate far too much about it.

5. Experiment little by little
I think the only way to invest is to do some "exposure" therapy. I'm going to start with small amounts, and as I gain confidence, add more.

How about you? Do you deal with Financial Fear? Are you trying to shake off the legacy of your family's attitude towards money?