Financial Nonsense
There is much nonsense in this wonderful but absurd world of ours. And a considerable amount of that nonsense seems to be financial. At Dwyer financial our modest ambition is pretty much limited to somehow reducing the level of financial nonsense that we encounter in our little corner of the world.
“We have met the enemy and he is us.” -Pogo (Walt Kelly)
“Be the change you wish to see in the world.” -Gandhi
According to a 2022 federal reserve study, in the world’s largest wealth wealthiest country (the United States), 40% of Americans lack enough money to cover a $400 emergency expense. After our recent increase in inflation, the percentage is probably much higher.
Being able to borrow money without adequate, or sometimes any collateral, seems to be the not-so-new normal, 125% 7-year new auto loans. College students with no assets and little or no income and plenty of debt are getting unsolicited, unsolicited, bona-fide credit card offers. 40-year home mortgages with less than the old standard 20% minimum down payment. Reverse mortgages for older folks who insist on keeping their unaffordable homes yet magically spend a lot of the value while eliminating a monthly mortgage payment.
Banks and credit unions pretending to help their customers with slogans like Financial Freedom, Freedom Unlimited, Fueling Your Financial Future, Because Your Money Deserves the Best, while focusing on increasing customer liabilities (loans) not assets. And proudly offering the oxymoronic “high-yield” savings account that lags inflation and loses purchasing power.
Financial companies and professionals (?) of all of all stripes, in person, online or whatever, that regularly un-necessarily complicate and obfuscate the subject of investing; that regularly overemphasize the issue of short-term fluctuations and risk at the expense of achievable long-term returns, and with little concern for our arguably biggest financial risk- inflation; or, at the other extreme, tout unsuitable, very risky investments and strategies that speak to our greed-and-fear, which can be doubly devastating. The government and its many regulations try to help as the paperwork continues to pile up.
There continues to be a troubling lack of practical money management and financial education in our schools and universities. This responsibility has been largely ceded to the wide-ranging system that profits from our financial mistakes, er, decisions. Imagine if the fast-food industry were in charge of nutritional education. Maybe that is why many of us are overweight but light in the wallet.
“It ain’t what you don’t know that gets you into trouble. It’s what you know for sure that just isn’t so.”
-Mark Twain
We have been indoctrinated to believe, to know for sure that home ownership is a great investment. Yet several studies and several famous investors disagree quite strongly and convincingly. (This information is rather unknown, undiscussed, uncirculated, and of course, very few players in the influential housing industry can afford to be objective and forthcoming.) In fact, some questions whether a home can be described as an “investment” at all. Add to this the long-term trend toward an un-necessarily large home and the popularity of storage units (often full of stuff of little value) and you have a mostly imaginary crisis in which a lot of folks are losing or making a whole lot of money. And, sadly, homelessness is on the rise.
But, don’t despair! There is also a fair amount of financial sense floating around. Our clients are proof positive that you don’t have to succumb to nonsense. We stand ready to try to help anyone who has a sincere desire to improve their financial situation. No cost, no obligation, no financial minimums. That’s the way we’ve worked for over 35 years. But, we have come to realize that probably not more than 20% of the population is ready and willing. Maybe 20% is too low a number. I am willing to stand corrected. But we are plenty busy, so 20 is plenty. Still, we always have room for one more. It’s your call.