Personal Finance For Normal People

When I came up with an outline for my book proposal for what eventually became A Wealth of Common Sense: Why Simplicity Trumps Complexity in Any Investment Plan, my grand idea was to make markets, investing, and personal finance accessible to normal people.

I wanted to explain complex topics using plain English, a little bit of data, and a splash of common sense.

There was just a tad bit of naivety in my idea.

My editors basically said, “This is a great idea…and absolutely no one will buy this book.”

They had all the sales data and the sales data shows most regular people don’t like to read about finance.1

So I came up with a new outline and marketing strategy which would appeal to an audience who actually likes reading about this stuff. I still tried to write a book that was aimed both at my grandmother and finance geeks but it’s always frustrating to me that personal finance can’t go mainstream.

Most people find this stuff mind-numbingly boring. A combination of embarrassment about the state of their finances or a lack of interest keeps many people away from the topic.

So every once in a while a blogger or the financial media will put out stories just to rile people up to elicit the right emotions to get people to pay attention.

The way I see it, there are 3 ways to get the masses to read about personal finance since most people don’t care about the subject:

(1) Make them angry. Here’s a story of a guy who was able to save $500k on a $50k salary by the time he was 35 in New York City! (Ok so his parents paid for his condo, gave him a monthly stipend, paid for his college, and he tapped his trust fund but still…)

(2) Stress them out. You’re definitely not saving enough. Just look at how much this successful person has saved and they’re like 11 years younger than you. WHAT IS THE MATTER WITH YOU! HURRY UP! YOU’LL NEVER RETIRE!

(3) Show get rich quick schemes. Just follow these simple steps, read this life-altering book, check out these motivational fortune cookie quotes and you too can become wealthy just like I did! (disclaimer: this is not how I got wealthy but how I plan to stay wealthy)

You could add motivation as a topic people flock to such as the FIRE movement but those people are outliers, not the norm. And people outside of the FIRE movement seem to get pretty angry when they read about the 31-year-old software engineer who used their six-figure income, 70% savings rate, and frugal lifestyle to retire as a blogger at an obscenely young age.

These clickbait stories tend to cause an uproar among the financial commentariat. We all chime in how none of it makes any sense (and it typically doesn’t but that’s the whole point). People spend all day dunking on it on social media. The jokes eventually turn into outrage and then we do it all over again a few months later with another recycled topic.

The latest version of this was a made up budget for a couple making $500k/year:

I’m pretty sure this one resurfaces every 6 months or so just to get people’s blood boiling again. Everyone was going line by line to show how wrong or unrealistic this budget is. I’ll let you in on a little secret — this is what the author of this budget wanted. Outrage drives clicks.

I heard a theory recently that went something like this — corporations and their PR departments know how to cause a stir with the outrage brigade to drum up attention for their “brand.” Is it possible these companies use orchestrated outrage by creating a crisis of their own doing, with a plan in place in advance for how to put out the fire, to gain free publicity?

This may be a stretch but stuff like this wouldn’t surprise me in the social media/streaming/information age where the competition for eyeballs and attention is as great as it’s ever been.

Last summer, MarketWatch kicked the hornet’s nest with this little tidbit:

I don’t even think they were trying to be controversial about this one but people still got upset because these kinds of statistics force people to assess their own finances. And it makes sense when you look at the numbers that people generally get upset at these types of stories.

Just this week U.S. Government Accountability Office estimated that nearly one half of those approaching or in retirement age (55 or older) had nothing, zip, zero, zilch saved in a traditional retirement account such as a 401k or IRA. And that’s actually an improvement from the last time these numbers were released.

I don’t blame the bloggers and financial personalities that put these types of contentious posts out there. If this is the stuff that gets people actually talking about personal finance then that’s a moral victory. At least people are having an actual conversation about budgeting or saving for retirement for once.

So the conundrum is people only seem to pay attention to personal finance when it elicits a harmful emotion because the topics tend to be too boring to talk about otherwise.

I wish I had a solution to this problem but I honestly don’t know what that would be.

Our daughter goes to kindergarten in the fall2 so my wife and I have spent the past year or so looking at the different options. There are schools in the area that do a Spanish or Mandarin immersion program to teach children a second language at a young age.

I’m sure there are benefits for young children learning a second language and all that but why do we make this a priority but don’t teach them the language of finance?3

Maybe that wouldn’t solve everyone’s financial troubles but it seems we need to find other ways of getting more people to pay attention to personal finance.

Further Reading:
The 3 Levels of Wealth

1You could make a case that people like Suze Orman and Dave Ramsey have made their careers selling finance to regular people but they’re the exception, not the rule.

2I’m thinking about hiring Lori Loughlin as an admissions consultant.

3Or maybe how to code?