Personal Economy

Experience tells us that the personal impact of major issues and changes is largely unknown until long after the fact, and it’s never the way it was reported or predicted. So then why so many headlines and articles and commentary? There is a very simple answer to this, but not an answer that’s easily swallowed. Sadly, headlines, hype, and drama sell (and prompt people to react and buy and sell assets, and all kinds of things).

We know that when you get down to it, sales are a core consideration for the media. We just choose not to consider it and overlook this. We’re hopeful that the information is reliable and sound. After all, if the information flowing from books, magazines, TV shows, and newspapers is provided in a way to drive sales numbers, then where can the raw facts be found? And since advertisers believe that I won’t buy or watch unless I see an impact to me or my family, then that’s the way things are spun.

After studying finance from an armchair (especially personal finance) for many years, and reading book after book from many authors on the subject, I then ventured into the financial newspaper and magazine world. (By the way, as far as books go there are only about 5 authors that I believe are worth reading and most of them have passed… but isn’t that really the test of solid information? It stands the test of time?). We’ll discuss books and newspapers in another article.

I won’t name the magazines, but would like to relate an experience. I picked up a fairly popular financial magazine at my Dentist’s office and liked the articles. They were candid, focused, and seemed factual with no speculation. That’s what I want. I don’t want opinions (unless they’re unbiased which is rare), speculation, or rhetoric which typically constitutes 75% of the articles I see. I want the facts. I saw a discounted subscription offer for this magazine, and I bought it. Before I received the first issue, a copy of a sister magazine (also pertaining to personal finance) arrived and I assumed that I had made a mistake when ordering. I leafed quickly through the magazine and none of the articles went on my “read this” list so I laid it aside. Two weeks later, the magazine I ordered arrived, and it was pretty good. Similar in quality to the first copy I had read, and interesting articles. So then why was there another magazine? What was the real difference? Every month about two weeks before receiving the magazine that I ordered, the other one would arrive. I never saw much in it of interest, but I decided to carve out some time and go through it page by page. As I went through it, I ripped out the ads as I went along. I stopped at a few articles and read partway through only to find they had sales pitches buried in them. Out they went, one by one, and not one page remained when I was through. Not one. Every page was an ad in some sense or tilted toward a sale… and this is a popular magazine. I determined that the reason I get it for free when I didn’t order it and don’t want it, is because it’s one big ad masquerading as a magazine. An entire magazine with no objectivity or substance, made up of ads and steering articles… and it’s popular. What are people getting out of this? I really can’t say.

After a few months of reading the magazine that I ordered, I found that it too was drifting toward speculation and more ads. Oh well… I gave it a try. Time will tell which way it goes. Even the association that I joined a few years ago which claims to be unbiased, is showing rather obvious signs of bias with sales as a goal. Since we really want to manage our finances, take control, work toward goals, eliminate debt, and establish and maintain a reasonable savings, these are not the articles and recommendations we need. I wonder if we’re not better off without any of them.

The good news: These experiences are my glaring reminders to stick to the basics, and to do the work myself. To manage our finances, we need to be diligent, vigilant, and responsible, and this means allocating time. It means not letting someone else do the homework and just following their lead. It means planning and reviewing, and nose to the grindstone debt reduction and prudent saving… acknowledging the fallacy in the quick-solution mentality. I form a plan toward my goals based on sound knowledge and principles, diligently follow the plan, and review and adjust the plan as things change. It’s pretty straight-forward and not terribly difficult… and this is the good news. Few articles will divulge the tried and true… after all, it doesn’t sell anything.

Wisdom is the proper allocation of knowledge, and prudence is the ability to govern and discipline ourselves using reason. These attributes should form the foundation of how we manage our personal economy. We build on these with diligence and perseverance toward our goals, and that is how we achieve them.