Title: "Pound Foolish: Exposing the Dark Side of the Personal Finance Industry"
Author: Helaine Olen
Publisher: Portfolio-Penguin, 2012; 304 pages; $27.95
Ahh, personal finance pundits. With the exception of political commentators and televangelists, few can match their consistently dramatic and loud performances, in which they show few qualms about hollering and hooting at the very members of their audience they are supposedly trying to help.
As with everything, of course, there are exceptions. In her new book, "Pound Foolish: Exposing the Dark Side of the Personal Finance Industry," journalist and former finance writer Helaine Olen exposes both the bombastic tone and sometimes-fact-defying advice provided by many personal finance pundits, and the (generally) quieter, gentler finance intelligentsia whose spot-on commentary often goes unnoticed or is flatly rebuked by finance-industry interests and insiders, before being proven correct years down the road.
Olen starts with an expose of a personal nature: that when she became the lead writer for the Los Angeles Times Money Makeover column, responsible for making firm recommendations about what her subjects should do with their money, she knew so little about personal finance she relied upon "Personal Finance for Dummies" as her bible.
Generally, Olen’s tone adheres to the norm for an expose: critical, outraged and, as exposes must do, inclined to nitpick at the (easy) targets of her lens, from Suze Orman to David Bach to Jim Cramer, but also including many lesser-known television, print and Web providers of personal finance advice and information.
Throughout "Pound Foolish," Olen makes it her business to surface a laundry list of legitimate reasons we should think twice (at a minimum) before following finance advice from media gurus, ranging from the fact that much of the "financial education" we see is ultimately funded by the Wall Street investment firms to church up business, to the fact that many of the strategies these gurus offer simply don’t stand up to scrutiny when you run the numbers of reflect on their predictions, restrospectively.
Olen deftly disproves the numerical wisdom of a number of financial experts’ "systems" and "strategies," from David Bach’s "latte factor" to Dave Ramsey’s "debt snowball" approach.
In the same vein, Olen aims much of her exposure what she sees as the hypocrisy of personal finance gurus. In particular, Olen calls out Suze Orman for peddling products and services that seem to defy their own frugal-living advice, like Orman’s branded debit card, a deal with GM to push car loans (which Olen contrasts with Orman’s own advice not to borrow to buy a car), her deal with FICO to offer credit repair kits, and her do-it-yourself will and trust packages.
Olen is also skeptical of financial advice and materials targeted at women because they are supposedly more likely to shop too much or let their emotions sway their decisions. Also scrutinized through Olen’s critical and insightful lens are get-rich real estate gurus and financial literacy and bankruptcy programming that does little or nothing, in Olen’s opinion, to actually keep those with money troubles from ending back in hot water in the future.
"Pound Foolish" runs the gamut between uncovering interesting facts about the finance industry you didn’t know and exposing downright troublesome material. But the upshot of "Pound Foolish" is to make anyone who reads or watches financial advice rethink the soundness of that advice, given a glimpse of the various biases, motives and interests that motivate the advisers.
Perhaps more importantly, "Pound Foolish" also has an underlying current of empowerment and encouragement — readers may come away with the sense that with a bit of research and discipline, they can probably do no worse on their own than they would following the advice of many media finance gurus — and, in fact, they might even do better.
Tara-Nicholle Nelson is a real estate broker, attorney and the author of two critically acclaimed books on real estate. Tara also speaks and writes on the art and science of life transformation at RETHINK7.com.
|Contact Tara-Nicholle Nelson:|
|Letter to the Editor|