Financial Advice-Makes US Poorer?

[imoldernu]

Thought y'all would enjoy this article about Financial Advice...
Wake Up, America! We're Paying Billions for Personal Financial Advice, and It's Making Us Poorer | Alternet

Posted without comment.

ercerpt:

Olen exposes the bogus -- and well-compensated -- advice issuing from the mouths of slick celebrities like Suze Orman, David Bach, Dave Ramsey, and Jim Cramer. She blasts through the mirages of 401(K)s, mutual funds and gimmicks of the do-it-yourself retirement plan that America has foolishingly embraced, along with the real estate schemes and stock market fantasies we turn to when the numbers in our savings accounts don't add up.

 

[GrayHare]

A complaint is fine provided a viable solution is proposed. That article does only the complaining part.

 

[NotMyFault]

Based on the people I know, people are poor because they spend way more than they make not because they are getting bad financial advice. Most people don't even have any savings.

 

[MichaelB]

It's not an article, it's a book review. "Pound Foolish: Exposing the Dark Side of the Personal Finance Industry". I guess the author feels her advice is worth money. She may be right, but the subject is not new.

 

[bUU]

A complaint is fine provided a viable solution is proposed. That article does only the complaining part.

I suppose she wants to sell her book, though even there I'm not sure she provides a "solution". But I dispute your premise. The problems with the "industry" are so plentiful and severe, and many in society jump to defend their financial planner with such fervor, that it will take not just one book but several books of "complaints" to shake some people off of that dogged determination to defend what's wrong.

I'm currently lurking in another forum reading a discussion about this and the over-the-top reactions to the idea that financial planners are often negative agents in the process are humorous.

 

[bUU]

Based on the people I know, people are poor because they spend way more than they make not because they are getting bad financial advice. Most people don't even have any savings.

I think there are three levels: What you call "poor", which are people who don't earn enough to cover what they spend. They actually need people like Suze Orman to help them move out of debt, assuming that they have the opportunity to do so (enough well-paying jobs, the skills to get one of those jobs, learning how to spend less, etc.) Then there are those who are successful at investing. But in between is a group of people who have the financial resources to excel financially but they don't because they're falling into the traps that she evidently outlines in her book.

 

[GoneFishing]

Based on the people I know, people are poor because they spend way more than they make not because they are getting bad financial advice. Most people don't even have any savings.

+1

 

[haha]

I found the whole premise stupid. But what I thought most interesting, is that the author apparently calls for "a collective solution".

Which means tax me to cover your shortfalls.

No thanks, though I can easily see how it might appeal to those who plan to run out of money before they may run out of life.

Ha

 

[clifp]

It's not an article, it's a book review. "Pound Foolish: Exposing the Dark Side of the Personal Finance Industry". I guess the author feels her advice is worth money. She may be right, but the subject is not new.

Yes far from new. Page 17-19 of the Buffett's annual Letter http://www.berkshirehathaway.com/letters/2005ltr.pdf has a very entertaining description of the Gotrock family and their variety of financial helpers who "help" become poor while enriching themselves.
http://www.berkshirehathaway.com/letters/2005ltr.pdf

 

[jollystomper]

It's not an article, it's a book review. "Pound Foolish: Exposing the Dark Side of the Personal Finance Industry". I guess the author feels her advice is worth money. She may be right, but the subject is not new.

I actually have read that book. While it is does a good job of pointing out issues within the personal finance industry, it lacks providing any solution other than "you can't do anything and you need the government to fix things".

It is highly partisan and at times conflicts with itself (eg. it takes Suze Orman to great task, but then later uses comments from her to support the authors view). The book also ignores the point that no one person/entity is perfect and one needs to use multiple sources, and ignores the many folks and resources for sound guidance.

 

[ziggy29]

The funny thing to me is that people want to sell financial advice that tells people they don't need to pay for financial advice. The Motley Fool has become notorious for this.

 

[imoldernu]

A plain talk article about questions to ask:
The problem with financial advisers and anyone who brags about their investments

 

[azphx1972]

The book sounds like financial porn, to be honest. There are plenty of resources to obtain free, solid financial advice (library, internet, etc.) if one is truly interested, and the amount of money made by the financial planning industry probably pales in comparison to what gets wasted by people who fail to plan or manage their finances.

 

[Sesq]

When I read the NY Time's review this is the part that made my hairs stand on end:

Unusual, and refreshing, is her inclusion of so many women’s voices throughout the book, such as the writer Jane Bryant Quinn; the financial adviser Manisha Thakor, the labor economist Teresa Ghilarducci, and Elizabeth Warren, recently elected to the Senate from Massachusetts.

I don't care a whit about whether she cites men or women, however Teresa is the one who wants to abolish 401(k)'s in favor of increased government pensions. Blech! Give me Orman, Cramer or Ramsey anyday.