How Personal Finance Led Us Astray

Friday, March 22, 2013

Transcript

For over 20 years a voracious personal finance industry has tried to help us make smarter investments and sound financial choices. And it's created a number of stars in the process, television personalities and best-selling authors. And yet, according to Helaine Olen, author of Pound Foolish: Exposing the Dark Side of the Personal Finance Industry, most personal finance advice is really a kind of financial self-help. Bob talks to Olen about how insisting that we can affect our financial fate ignores the larger economic forces that control us.

Guests:

Helaine Olen

Hosted by:

Bob Garfield

Comments [10]

I was really looking forward to this interview, boy was I disappointed. Olen sounded bitter, condescending and very biased. She offered so little evidence against those she railed against (Ramsey, et al). I know these people are worthy of critique; I've taken the Ramsey course, and knew as I was listening that some of the info was 'bunk' -to put it nicely-. However, he offered many great principles to live by that keep you from financial ruin. She only had 1 or 2 qualms with each, yet they'd been in business for 20+ years. Then, to top it all off, she offered NO alternative!! Typical Monday morning quarterbacking. Again, I was totally underwhelmed.
Oh yea, as the others said, Kramer is a nut job anyway, only a fool would listen to him; he's pure entertainment - Period.

Jun. 11 2013 12:05 PM
Dan Hampton from La Crosse, Wi.

A good show but having spent my entire career as a stockbroker, it is readily apparent to me, at least, that shows like Jim Cramer's are purely entertainment and nothing more. He does insist, in his opening comments, that he is there to "educate" and he does a pretty good of that. If you are looking for good stock picks, might I suggest that one secure a copy of Berkshire's Annual and use that as a guide. Heck, it works for Warren.

Robert Bach's "Latte Effect" was interpreted a little too literally by your guest to suit me. The overarching issue isn't whether a latte is $3,$4, or $5, but how foolishly the typical consumer spends his/her money and how a little less of this, and a little less of that can translate into a sizeable net worth over the course of time. Your guest was dismissive of the concept becasue Bach doesn't take into account taxes or inflation. Well, I have a news flash: has she never heard of an ERISA account? $6.00 a day contributed to an IRA at age 20, assuming a 6% ROR, will yield you $401,000 at age 65. Regardless of the inflation number over that period, $401,000 seems like a better number than nothing at all.

Mar. 25 2013 08:46 PM
Corey from The Internet

This guest is right on so many things but wrong on so many others. Robert Kiosaki did NOT suggest that people flip houses, he advised against that in favor of buying commercial properties ONLY if they had a positive cash flow. This means he rejected 99% of the properties he looked at, and went out of his way repeatedly to suggest that there is no fast way to get wealthy, only investing in your own knowledge and financial literacy, and rejecting get rich quick schemes.

Is she another so-called specialist that hasn't done broad research? Has she even read his books?

Mar. 25 2013 07:30 PM
Rick Evans from 21702(today)

"Bob talks to Olen about how insisting that we can affect our financial fate ignores the larger economic forces that control us."

Fine! We can all agree that the medical and education industrial complexes are driving inflation and wages have stagnated. Ironically that tax free compensation in the form of employer health insurance is part of the reason for stagnating wages. And, yes there is little short term that people can do about globalization, job killing technology or sudden illness. However, Ms. Olen paints a picture of helplessness and hopelessness that serves no one.

That said what aside ignoring various personal finance gurus would Helaine Olsen offer. In interviews she's mostly served up "It's not your fault." emotional pablum while ignoring changes in middle and working class consumption patterns.

Olen focuses on silly things like the mythical $5 latte. In reality Americans DO blithely pay for TV that is available free over the air. Americans house smaller families in 50% bigger houses than 40 year ago. Despite rising fuel prices Americans have adopted gas guzzlers to haul around small kids while shifting from owning to serial leasing --- The $255 monthly payment of my previous car which I kept for 16 year went into retirement savings.

Finally, about teaching kids personal finance in schools? Fine, if you don't want agenda driven finance industries to do it then mandate teachers learn and teach about it. Teaching kids that you should not spend more than you make, that you should save for a rainy day and that you will need a pile of money when you no longer work is not that complicated.

Mar. 25 2013 10:36 AM
leo from chicago from Chicago

Excellent segment. Right after this, the next program on WBEZ was 'MarketPlace Money'.

Mar. 24 2013 03:20 PM
Stacy Harris from Nashville, TN

Helaine Olen is right on the mark! (Catch here comments on C-Span (www.c-spanvideo.org/helaineolen).

Stacy Harris
Publisher/Executive Editor/Media Critic
Stacy's Music Row Report
http://stacyharris.com

Mar. 24 2013 03:07 PM
Jennifer Wilson from Holyoke MA

While I agree with many of the points Helaine Olen makes regarding the personal finance industry and the need for better regulation to protect consumers, I do take issue with her characterization of Robert Kiyosaki's advise. He does not tell people to buy houses and flip them. I suggest that anyone who wants to understand his take on financial education read The Cashflow Quadrant. I have found him to be a valuable guide in understanding the rules of money and how not to be a victim.

Mar. 24 2013 01:58 PM
Sarah

I think there are several issues at play here.

"Financial literacy" can be a way to make relevant some basic math skills. (And not-so-basic, as in calculating compound interest.) That, I believe, is to the good.

Ditto understanding how the stock market works, something that can be done via choosing certain stocks to follow for a period of time. Especially if you examine the relationship between daily stock prices and news.

But I agree that much is what is presented to children as "financial literacy" is now linked to get rich quick schemes and the person most likely to get rich is the person or institution providing the advice.

Mar. 24 2013 11:13 AM
Jonathan Young from Chapel Hill, NC

Seriously Helaine, you're hating on financial literacy for youth? Yes, financial scams and exploitations can be cut down by passing legislation, but how dare you imply that that means we shouldn't empower people with the ability to make educated choices and mangage their personal finances.

Financial literacy curriculum is non-existent in our current education system, pre-k through college. If commercial companies are willing to sponsor this kind of education in exchange for some brand familiarity (in the absence of other solutions) so be it.

I really did enjoy the rest of this segment, but think about the unbalanced message your sending here.

Mar. 24 2013 11:03 AM
Sarah

The stock market is a scam.

http://www.lewrockwell.com/blog/lewrw/archives/33424.html

Mar. 23 2013 11:54 AM

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