Is Personal Finance Dead?
May 7th, 2009 by Nut
Yesterday I stumbled across an article on Slate‘s money site, The Big Money, titled The End of Personal Finance: Decades of advice turn out to be so much garbage. Essentially, she was saying that personal finance has become useless.
Her whole point is that we don’t need personal finance anymore because the current batch of personal-finance experts have been so wrong for so long. But who is “they”? She mentions Suze Orman and Jean Chatzky—both of whom have some serious inconsistencies. Suze Orman especially—she’s more of an entertainer than a personal-finance person.
But don’t despair, there are some “new” financial gurus out there that might be worth listening to. But her “new” gurus all sound like quacks—their strategies range from buying gold to selling all your stocks to predicting the future with linguistics theory.
Seriously?
What about sites like Get Rich Slowly, IWillTeachYouToBeRich, and The Simple Dollar? What about the sensible, everlasting advice contained therein? There is no mention of them, and the lack of one isn’t only annoying, it’s a disservice to the readers of the article.
Let’s take a look at some of the other arguments from her article:
The past two years have demonstrated over and over again that bad things can happen to good savers and investors.
Does personal finance claim to keep bad things from happening? Nope. We preach about being prepared for the worst, but bad things can and do happen. Does that mean we should forget about spending less than we make or trying to stick to a savings goal? Should we not wear seat belts because “cars will still crash”? I hope not.
No one, it turns out, really knows what an individual stock, mutual fund, or commodity like oil or precious resource like gold will be worth in six months, never mind six years.
Who has she been listening to? What personal-finance gurus or investing personalities has she been paying attention to that claim to know the future? If you honestly think anyone knows what is going to happen in six months, six years, or six minutes, then you really don’t have a clue.
Nonetheless, personal finance is unlikely to crawl away and die anytime soon for a simple reason: We think we need it.
We think we need it? Yeah, and we think we need pay our taxes, too.
Panic
This is just another part of the panic cycle that the media goes through when times are tough. Everyone becomes a pessimist and forgets that all this stuff has happened before and we managed to work our way out of it. How? By spending less than we make, by investing over the long term (that’s a lot longer than six years, Helaine), and being frugal with our money.
Is personal finance dead? I think not. We’re alive, we’re strong, and we’re not going anywhere anytime soon.
Photo by A.M. Kuchling
