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“Pound Foolish” Author Warns Americans From Taking Foolish Financial Advice From “Experts”
January 15, 2013
Managing personal finances is not an easy task for most. Each year millions of dollars are spent on books and seminars with the hopes of getting rich and out of debt.
Helaine Olen, author of the new book “Pound Foolish: Exposing the Dark Side of the Personal Finance Industry”’ and former editor of the Money Makeover series in the Los Angeles Times warns Americans of being fooled by the short-sighted money decisions of even the best-known personal finance experts.
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In an interview with The Daily Ticker, Olen claims these financial gurus offer either platitudes or dreadful advice that don’t apply to most people’s lives or situations.
“The idea that anyone can give specific advice to millions of people first of all doesn’t really work,” she says. “We’re not archetypes.”
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The average American suffers from serious financial strain and the advice parroted by these alleged experts is “easier said than done,” Olen argued.
The author uses alarming stats to draw the picture of a typical American:
Americans possess less than $100,000 saved in dedicated retirement accounts and 43% of Americans are living paycheck to paycheck. Salaries have stagnated and Americans’ net worth has fallen nearly 40% between 2007 and 2010.
Thousands of dollars in credit card bills due to unexpected medical emergencies, divorce or long bouts of unemployment are the main reasons American find themselves drowning in debt.
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Olen takes great distaste in the assertion that an individual can become a millionaire by investing all of one’s savings in the stock market. Suze Orman is among the “experts” that has promoted this suggestion before on CNBC and in her multiple books, yet Orman has admitted that she rarely invests in stocks and prefers the safety of municipal bonds, according to Olen. Equities are extremely volatile and rarely provide the 12% annual return that Orman and Dave Ramsey tout for people looking to quadruple their income, Olen adds.
Olen agrees with most personal finance experts that Americans should pay off high-interest credit cards and reduce their overall debt burdens.
Olen purposely avoids making her own personal finance recommendations in “Pound Foolish” but does proffer one tip she’s learned over the years as a personal finance journalist: invest in market index funds. They won’t make one rich but they offer the best return with the least amount of risk, she says.
Read more: http://finance.yahoo.com/blogs/daily-ticker/don-t-money-advice-suze-orman-dave-ramsey-122754956.html
Marc H. Wander is a partner of the Bloomfield Hills law firm of Witzke, Berry, Carter &Wander, PLLC. Marc has been licensed to practice law in Michigan since 1992. Marc’s practice is devoted to estate planning and business succession planning. Marc is a member of the Probate and Estate Planning Section of the State Bar of Michigan and is a prior Chairperson of the Oakland County Bar Association Tax Committee. He is a frequent continuing education speaker to insurance agents, financial advisors, CPA’s and financial industry organizations. He has also been heard on WJR Radio. Follow Marc on Twitter @MarcWander
