I just finished reading “Pound Foolish: Exposing the Dark Side of the Personal Finance Industry” by Helaine Olen. It’s supposed to be an exposé about the follies in the personal finance industry. Perhaps the real exposé is the author’s bias.
On the positive side the book is full of details about the contradictions the financial “gurus” make, or how their financial numbers don’t add up. Helaine certainly did her research for the book, but these are all easy pickings. In Helaine’s book, she targets them all: Suze Orman, Dave Ramsey, Jim Cramer, David Bach, Robert Kiyosaki, and even Sesame Street’s Elmo!
Gurus like Suze paint broad financial advice without getting into the personal specifics. As I’ve stated previously, they call it “Personal Finance” because it’s personal. Take what you think applies to your situation and throw out the rest. What might make sense for someone making $40,000/year and a negative net worth, might be terrible advice for a small business owner making $500,000/year and over a $5 million dollar net worth. As much as Olen bashes Robert Kiyosaki (I don’t disagree with what’s said in the book), that doesn’t mean all his advice is bad either or all statements are inaccurate.
Ironically with Suze, as someone who invests primarily in bonds, she certainly does dole out the stock advice. Over the years, I’ve personally noted many contradictory statements from Suze. So again this is no surprise to the reviewer.
The other good aspect of the book is that Olen discusses the lack of transparency and the tricks played by the financial industry. However, this shouldn’t be a surprise, either. Caveat emptor, or buyer beware, should apply to all financial advice. I’m not sure why individuals default to thinking everyone always has their best interest at heart. Ronald Reagan once stated, “trust but verify.” That advice should apply to any finance advice you receive. Also the famous quote from P. T. Barnum, “A sucker is born every minute”, should apply to finance as well.
The bad part of the book comes with any mention of her obviously very slanted politics and her belief that we are all helpless little sheep. Helaine Olen more or less repeats this theme throughout the book. In Olen’s world why even try to better yourself and educate yourself about finances. It’s not your fault you didn’t study hard, choose an easy college major, and now work at a low-income crappy job. It’s not your fault you didn’t educate yourself about finances, took out a bigger mortgage than you could afford or didn’t read the terms of a mortgage before signing. Want to do investing yourself? Forgetaboutit! You are a poor investor – don’t even try. Life is hopeless in Olen’s world.
No in the true form of any Statist, she states the government is our savior and the solution to all our financial woes. Other than this, Olen offers no other real solutions to the issues she discusses.
“Pound Foolish will tell the story of how we were sold on a dream–a dream that personal finance had almost magical abilities, that it could compensate for stagnant salaries, income inequality, and a society that offered a shorter and thinner safety net with each passing year. The book will tell the tale of how that fantasy was sold to us by people, organizations, and businesses that had a vested monetary interest in selling it to us. Finally, it will tell the story of how we allowed ourselves to be convinced that the personal finance and investment industrial complex would save our collective financial souls–and what comes next, now that it is clear it never could.”
Her book can be summed up into this: in the financial world everyone is a scammer, liar, cheat, thief; the game is rigged; don’t even bother trying to better yourself. That social justice and more regulations will solve our country’s income inequalities. Maybe some of the issues within society are in fact from government policies is never a source of discussion in her book and is certainly telling. Is it possible that actions from the Federal Reserve, tax policies, government regulations, or government spending also caused some of the ills she describes?
Also keep in mind that our very government failed to protect us from various financial crimes (cough Bernie Madoff) and that no central planner was able to predict the 2008 financial crisis. So perhaps in Olen’s myopic view of the world maybe she missed out that central planners aren’t good with finance as well? After all, they don’t call former Secretary of Treasury Timothy Geithner “Turbo Timmy” for nothing.
The final kicker is she’s in support of the Occupy Wall Street movement. They recently released a how-to-book on how to be anything but be responsible with your finances. The document goes into minute detail on how to scam the system, for the sole purpose to bring down the system.
If you are uneducated about such issues in the financial industry, this book should be an eye-opener. Otherwise, this book isn’t an exposé, but someone who whines from chapter to chapter. Keeping in mind this book is from someone who started with no financial experience, only to write a column in which she was instantly declared a “financial expert” herself.
Unlike the author, I will recommend passing on this “bitchfest”. I recommend empowering yourself and educating yourself about finances instead. Education certainly DOES make a difference! In some cases, even bad education is better than no education in finance.
If individuals such as myself, with no family history, background, or connections, can educate themselves about finance..then maybe, just maybe, it’s possible for a few others to do the same. We are not all helpless victims of society like she portrays in the book.