Last week, I came across a shocking story of a 20-year-old university student in United States who committed suicide because he thought that he was nearly million dollars in debt. Alex Kearns had been investing via an app called Robin Hood. One day, when he opened the app, he discovered that he had somehow incurred a loss of -$US730,000.
He had been trading options – a very risky and complicated form of investment. He thought that he wasn’t trading on margin because he had not enabled that option. (When you trade on margin, it means you borrow money to invest.)
In his suicide note (posted by his cousin-in-law Bill Brewster on Twitter) he wrote, “How was a 20-year-old with no income able to get assigned almost a million dollars’ worth of leverage? The puts I bought/sold should have cancelled out, too, but I also have no clue what I was doing now in hindsight.”
The whole situation is even more tragic when it was learned that he didn’t actually have that negative balance.
In an interview with a news channel, Brewster said that it was a user interface issue, misleading Alex into thinking that he had a negative balance. (It also had to do with how the investment vehicle worked, but I am not familiar enough with it to fully explain it to you in layman’s English.)
Nevertheless the shock of seeing that negative -$730,000 balance put him in such emotional distress that he did something irreversible: kill himself.
Alex’s tragic story made me think about how financial struggles can be so crippling that suicide seems like the only way out. How many times have we heard of stories of gamblers killing themselves because over their crippling debts?
It also highlighted the dire need for financial education. Alex admitted that he had “no clue” what he was doing. Options is a form investment so complicated that even day traders have a hard time with it. How was he, a newbie, going to fare? The lack of safeguards was also another red flag. Ideally, Alex should have gone through a vetting process to see if he could trade options.
These two issues – the lack of financial education and mental health support – is a source of personal frustration for me. In the Malaysian personal finance sphere, although I’m thankful that there are more articles on making more money, investing and saving, there’s a serious lack of resources on how to manage the emotional aspects of money management.
Financial PTSD
I have written before how I have an unhealthy relationship with money. It has driven me to prioritise money over my own well-being and do things that are not good for my mental and physical health, just so that I could increase my bank balance.
A lot of that was tied into the financial distress I went through in the past (six figure debt, bouts of of uncertain income…)
In fact, I believe I am suffering from some kind of financial PTSD because of those years when I struggled financially. And although I have already settled my debt, and I now live debt free, the shadow of that crippling season of financial insecurity never left me.
I still struggle with the fear of not having enough money, and this is probably something that I have to work on for sometime. But believe me when I tell you that it’s not worth killing yourself because of debt or money.
Money is a tool. It is not your entire life. It may feel like your entire life because you think money can buy you happiness and security.
But it’s a lie.
You can live very happily on very little money, or with no money at all. I come to this conclusion by studying the life of people like humanitarians Princess Alice and Gandhi, and environmental activist Rob Greenfield, who all voluntarily decided to eschew a life of plenty to pursue a life of service.
So if money is not the root of happiness, what is? That’s an age old question, isn’t it? But if I may be so bold, I’d like to suggest that happiness comes from things we often take for granted: Good friends and family, good health. The fresh air, a beautiful park. Learning new things. A lot of the things that can improve our happiness doesn’t cost money.
But if you’re unconvinced, then please watch this video by Mary from Pennies not Perfection where she talks about her sister, who committed suicide because of financial problems.
Don’t make money your god
Money is just a tool. We should be good stewards of our money, to manage it responsibly and to be generous with those who are struggling.
But we should not be making it our life’s purpose or reason for being.
“He who loves money will not be satisfied with money, nor he who loves wealth with his income; this also is vanity. ”
— ECCLESIASTES 5:10
Recently, I watched a video by CF Liew where he talked about how some people ruin their lives because of property investment. He mentioned how some people will actually juggle five loans at once to buy numerous properties at once.
I was horrified. Sure, if you’re very, very lucky, it could work. But the risk is huge. Why do people do this? Perhaps they think that their gamble will pay off, they will be rich and they will finally be secure, happy and at peace.
That’s just deceptive thinking. We’re deceiving ourselves we think that taking on a huge, unsustainable amount of debt will make us happy. And that payoff could result in happiness. Financial guru Dave Ramsey went bankrupt because he bought a string of properties with multiple loans. That bitter experience made him the debt buster he is today.
Debt can drive us to deep despair.
This is what drives me to write about personal finance because there’s so little financial educational information out there, especially in Malaysia. I fell into debt because of lack of financial education. I wasn’t able to manage my money well because of the lack of financial education and Alex killed himself because he lacked financial education to comprehend what he was doing.
And that breaks my heart. A lot of our problems could have been prevented or even solved through financial education. And I don’t want this to happen to other Malaysians.
But we can easily go deep into the other end. We can put too much priority on our finances or be so vigilant and gung ho over it that we can end up even more stressed!
if you’re in deep debt, and you feel that everything is hopeless, I get you. I’ve been there. If you’re unemployed and you’re seeing your savings decline, or if you don’t even have savings and you’re digging deeper into debt, I feel your pain. But please, please, don’t kill yourself because of debt or money problems. It is not worth it and it’ll impact those you love greatly.
If you’re struggling with suicidal thoughts or depression, please call the Befrienders at KL: 03-7956 8145 (24 hours), Ipoh: 05-547 7933 (4pm to 11pm) and Penang: 04-281 5161 (3pm to midnight).
Elizabeth Tai 