To earn cryptocurrency, it might be necessary to dismiss the professionals in the field.
UAE resident recounts financial manipulation in the UAE and the power of low time preference
In her early 40s, a Canadian expatriate in the United Arab Emirates (UAE) faced a meeting with a financial adviser that left a lasting impact. Feeling financially secure with a decent salary, she entered the conversation eager to plan for her future. However, the consultation turned out to be a wake-up call, as the financial adviser presented a disheartening scenario using a mountain diagram and a small stick figure symbolizing her state of finances.
The expert's depiction was unsettling, showing where the individual was currently and attempting to scare her into investing more, fearing that without such aggressive action, her financial situation would worsen dramatically. The adviser's tactic left the woman feeling frustrated and confused, wondering how she could be in such a dire state with no debt, a good income, and no retirement plan.
Looking back, the individual realizes she was manipulated rather than informed or empowered. Financial advisors often employ "wake-up calls" meant to shame, frighten, and sell their services, rather than educate and help clients make informed choices. The traumatic experience marked a turning point in the woman's financial behaviour, drastically affecting her decisions for years to come.
It was only recently that she discovered the concept of "low time preference," a term from economics and behavioural psychology. Low time preference refers to a person's ability to delay gratification and prioritize long-term rewards over short-term pleasures. Consequently, individuals with low time preference are more likely to invest, save, and plan — rather than spend impulsively or chase instant rewards.
The term low time preference was first introduced in Austrian economics, particularly in the works of Ludwig von Mises and Hans-Hermann Hoppe. The woman first learned about it in Saifedean Ammous's 2018 book, "The Bitcoin Standard."
Before moving to the UAE, she was a regular investor, having opened a registered retirement savings plan, or RRSP, in Canada as soon as she began working at the age of 26. She invested steadily and increased her contributions whenever she received a pay rise.
However, upon relocating to the UAE, her financial plan was compromised. Enticed by financial advisers introduced by her workplace, she was pressured to invest in products requiring lengthy commitments and hefty monthly payments. Knowing she would return to Canada soon, she declined, feeling shamed by the advisors for not committing to regular savings plans.
The advisers insisted that a minimum investment of $10,000 (Dh36,729) was necessary. The woman often told herself she would save up and occasionally did. However, she admits to slipping back into unproductive habits, thereby missing out on the compounding interest for an extended period. Regrettably, she later learned that the investment products were predatory at worst and poorly structured at best, with up-front fees often undisclosed.
As the individual reflects on her experiences, she realizes that losing her savings routine during the move overseas and succumbing to consumerism played a significant role in her financial setbacks. With renewed understanding, she has taken steps to rebuild her low time preference. Emphasizing self-learning and taking control of her finances, she invests regularly in Bitcoin without needing a third party, which has provided her with a sense of peace and clarity.
"I wish I could turn back time," the woman concludes, underscoring the importance of adopting a low time preference mindset. While she regrets the missteps she made years ago, she remains optimistic about her financial future. With perseverance and a disciplined approach, she is committed to moving her stick figure from the edge of the cliff towards the summit.
For more articles related to finances and investments in the UAE, visit: this link
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If you're interested in learning more about developing a low time preference, visit:
- Low Time Preference: Implications for Personal Financial Decision Making
- Delay Gratification: The Key to Financial Success & Personal Freedom
- The financial advisor's tactic of using a "wake-up call" to manipulate, scare, and sell services instead of educating and empowering clients could significantly impact one's personal-finance decisions.
- Adopting a low time preference mindset, which prioritizes long-term rewards over short-term pleasures, is essential for effective personal-finance management, such as investing, saving, and planning for the future.
- Investing in products with predatory practices and undisclosed fees can lead to financial loss, highlighting the importance of conducting thorough research and taking control of one's personal finance, including investing in cryptocurrencies like Bitcoin without the need for third parties.
