The End of Personal Finance

[jeffrey]

That our personal finances weren't fully ours to seize didn't seem to occur to many of us until recently, when the stock market plunged almost 40 percent in a mere year, housing went into free fall, and the unemployment rate began to climb perilously toward double digits. All these facts suddenly left the personal finance industry facing a conundrum of its own making. The backbone of the self-help complex is the idea that you can do it. You. Singular. But what happens when you lose your job and can't find a new one before your six months of recommended emergency savings runs out? Or a good chunk of your retirement income is in the form of a pension from your former employer—and that employer is named Chrysler? What then?

The End of Personal Finance: Decades of advice turn out to be so much garbage. | The Big Money

[Broken Arrow]

Another thought-provoking editorial.

What I am trying to figure out where she's going with this? That the "problem" with personal finance is that "we think we need it"?

She apologizes, in retrospect, someone for dismissing a question whether to buy into gold, and yet, states that, "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." So, why be apologetic for not being able to predict the future price of gold or any other asset class for that matter?

And why does a bad bear market automatically make "personal finance" invalid? That's a rather broad brushstroke, isn't it?

[EEinNJ]

That article reflects a view I've had, to varying degrees, for several years. It's not that personal finance advise such as saving, budgeting, staying out of debt, having insurance, etc. is invalid. It's the investing aspect that has proven to be misguiding. Not surprising, because personal finance writers are no better than Wall Street strategists and investment advisers at predictions. The snake oil is that if we "take control" and invest carefully, we will have financial security- maybe even retire rich! It's the great expectations advise that is the garbage, not the boring basics.

[snafu]

The root cause of much of the pain has been inaction or actions that border illegal. The infamous example... at least two separate 'bell-ringers' took every action in their power to request SEC check Madoff's investment program which they believed was a scam. They were brushed off as not credible. Mortgage brokers working on commission threw mortgages at anyone qualified or not. Those were then repackaged with commercial mortgages many were familiar with without saying they were junk! Top administration at AIG, Chrysler etc. enjoyed remuneration that set a new bar for all top administrators. Meanwhile, the firms were sinking in quagmire. We all remember they took their personal jets to the meeting with politicals for bailout billions.

Who knew or predictated personal financial decisions on the premis that ethics were dead? I am looking forward to the next 'dog & pony' show by Fidelity and Tempelton to ask why they didn't know as they have heart-to-heart talks with the CFOs. Surely they smelled the odor

[wnlbutterfly]

Apparently I am a simpleton, because this article comes off to me as saying that personal finance advice is pointless and that we are all kidding ourselves thinking we are in control of our finances.

This paragraph bothers me: ""Personal finance has come to substitute for the role government should play for people," observes Nan Mooney, author of (Not) Keeping Up with Our Parents. "In the past 20 years the myth of the person succeeding on their own has gotten bigger and bigger. This myth is dangerous. It tells you if you can't balance everything and you are in debt, it is your fault."

To me this is saying that hey, if you maxed out those credit cards, it's not your fault. And "the role government SHOULD play"...WHAT?

We don't have control over our jobs (company could downsize), and we don't have control over our investments growth (we can make good guesses based on info we have on hand). BUT we do have control over our personal spending, we have control over our savings (saving money instead of spending). What I get from Suze O and David Ramsey is learning how to budget, being aware of areas I can cut back, really taking a look at the big picture for my family.

Please let me know what I have missed or if I am just not seeing the point of the article.

[Broken Arrow]

I'm kinda with you here, wnlbutterfly. I read this article less of a coherent stance how to approach personal financing, and more of a series of frustrated vents about the current state of affairs.

As it is stated at the top of the article, this piece is categorized under "Opinions on the news." Plus, the headline, "The End of Personal Finance: Decades of advice turn out to be so much garbage." seems rather sensationalistic doesn't it?

Sensationalism does bring something interesting to the table to talk about, but in the end, we still have to be practical about the way we approach our everyday finances.

[rob62521]

Is it me or is the keyword "personal finance" another way of saying, "common sense?"

Bingo! Those folks who are doing OK have some common sense.

I like Suze Orman overall, and I think her audience is really middle class, not poor. I know Larry Winget in one of his books states that his advice is for people who make a decent income. Having said that, I do agree that much of people's problems with money is emotional spending. We have a friend who makes decent money, but his "happiness" depends on buying stuff. But, he's never satisfied and when money gets tight, he gets grouchy.