Helaine Olen is not a fan of the personal finance industry.
In Pound Foolish, Olen launches a full scale attack on all aspects of the personal finance community including banks, stock brokers, and financial gurus like Suze Orman and David Bach. Not even Elmo can escape her wrath (I was always more of a Grover fan myself).
Olen argues that the personal finance movement and efforts to educate the masses on how to handle money and invest are all just a sham perpetuated by those with ulterior motives.
There is obviously some truth to this statement. You should always take advice with a grain of salt and consider what they person dishing out the advice has to gain by recommending a particular course.
I found myself nodding in agreement as Olen complained about commission-based advisors churning accounts to pad their own bottom line and the 401(k) industry lobbying to keep fees and expenses hidden so as not to “confuse” participants. It doesn’t take an Albert Einstein or an Isaac Newton to figure out that automatic enrollment is more about increasing assets under management than helping Americans save for retirement.
But the deeper I got into Pound Foolish the more I realized the author’s argument is uneven and one-sided. Olen is very good at pointing out conflicts of interest and despairing over how unfair the system is, but when it comes to offering solutions to the problems at hand she falls decidedly short.
In fact, the press release that accompanied the free review copy I received questioned her on the lack of actionable steps or remedies to the problems. She simply reiterated the conclusion of Pound Foolish in which she suggests we start talking more about money. Her hope is that as the topic of money becomes less taboo we’ll be able to “improve our finances by banding together to insist on changes that will improve all our balance sheets.”
One would think Olen would be a proponent of the financial literacy movement as it would stand to reason that an educated consumer would be more able to defend herself from the con-artists and scammers trying to fool them.
Instead Olen skewers financial literacy as a tool of the financial industry designed to acquire customers at a younger and younger age. For example, she points out that a ten-part Sesame Street series on money management was sponsored by PNC Bank. In other words, Elmo is no more than a shill pushing financial products and building brand awareness to the next generation of customers.
Olen also questions the effectiveness of teaching financial literacy in schools, arguing that taking a class on finance in high school will do little to protect someone from signing a predatory mortgage when they are 40.
I disagree. Perhaps if more people had been educated on basic financial concepts like how mortgages work and the difference between gross wages and net wages fewer people would have signed on for mortgage payments they could never afford.
My real problem with Olen’s way of thinking is that she removes all personal responsibility from the individual. We’re all just drifting in the wind with no control over our lives while greater forces conspire to hold us down.
I think that’s a terribly sad way to look at life.
Life is not fair. Bad things happen to good people. And the deck is usually stacked against us.
But does that mean we shouldn’t try to take control of our lives and improve ourselves? Obviously it is easier to just throw up our hands and complain about how unfair everything is, but then why even bother getting out of bed each morning?
As the publisher of a personal finance blog, I’m obviously biased in my belief that we can indeed take control of our finances. Our goal is to teach personal finance in plain English so people can make better decisions with their money.
And yes, this blog does make money (though sadly, not much) from advertising and affiliate commissions. For example, if you click on one of the links to Pound Foolish in this article and make a purchase, we’ll earn a small commission from Amazon. This revenue goes to helping us keep this website up and running.
We also try to be as transparent as possible and keep our readers’ best interests in mind. For example, you won’t find any spammy links to payday loan websites even though they can be extremely profitable. We turn down those offers and give up easy money because it is not something we believe in.
Now, the $64,000 question…would I recommend Pound Foolish: Exposing the Dark Side of the Personal Finance Industry?
That may seem odd since I was mostly critical of the book in my review, but I actually did enjoy reading it even if I didn’t agree with everything the author had to say. I found the chapters in which she took down financial gurus like Suze Orman, Jim Cramer, Robert Kiyosaki, and David Bach particularly entertaining.
I also think it is important to push your boundaries, challenge your assumptions, and keep your mind open to new ideas.