The Personal Finance Scam
March 9, 2013 12:14 AM Subscribe
I'm absolutely shocked, just shocked I tell you.
Olen got her start in the personal finance world when she ran a series for the Los Angeles Times called Money Makeover, which involved helping regular folks connect with financial gurus sort out their personal finances.
“My question was, did we mislead people?” Olen said. “That was really the genesis of the book.” As she found out, the personal finance industry is a swamp of conflicts of interest, shoddy advice, and prognosticators who profit off of the economic anxiety of everyday Americans.
“These empires of personal finance sort of start up, in part, as a way to explain it all to us,” she said, and they proliferate during hard economic times:
"People are desperate, and we live in this society where there’s deep shame around money, and there’s this idea that everybody should be able to make it…And so we feel very bereft and alone. Until very recently — like the past year recently — I would argue the average person really had no idea that they weren’t alone in this. The number in our 401(k)’s is roughly $25,000. That’s not enough money to get you through more than a year or two, nevermind a 30 year retirement. But everybody thought this was their individual failure. It didn’t occur to anybody that this was the average number and everybody was in on this. We’re all bereft here.
And the personal finance industry really preys on this idea that you can do it alone. And that you are alone in this. And that to not be able to do it is a personal failure. For instance, to give one very specific example, Dave Ramsey, who’s the big radio guru, has explicitly denied income inequality exists. And has told people they can choose not to participate in a recession."