The Battle of Human Nature
As we sit here in year four of the current depression, it becomes more evident each day that that those in charge don’t want to address any of the real financial issues facing this country. The “new normal” consists of a growing number of Americans on food stamps, of young adults up to their eyeballs in college debts with degrees that can’t garner them even entry-level jobs, and of seniors trying to scrape by with savings accounts and CDs that pay them practically zero interest. The future, unfortunately, looks grim and will continue to appear so until the majority of Americans acquire the courage and intestinal fortitude to face up to the fact that the country is effectively broke and in need of a serious overhaul.
Now, don’t get caught up in the smoke and mirrors of the MSM (mainstream media), because they are one of the last places you are going to hear the hard truth. For every “Fox News” that refuses to acknowledge that the defense budget is probably 50% more than we currently need to keep us safe, there is an “MSNBC” that can’t do simple math to confront the growing entitlement system expenses that cannot be sustained with our current life expectancy being so high.
Why is this? And why is this so hard to resolve? The reason is staring at you each day in the mirror, HUMAN NATURE. Yes, that’s right, it’s in your genes, so to speak. We, as human beings, for the most part avoid temporary pain and seek short-term comfort. Just think of the last time you went out to eat after vowing to get healthy and in shape. The waiter asks you if you’d like to see the dessert menu and you lie to yourself and say, “I won’t order anything. I’ll just take a peek to see what they have.” How many of us always seem to find that special something we can’t resist? Probably 90% of us can’t resist, at least that’s what the science says. When confronted with the comfortable choice, we almost always choose that instead of what’s good for us in the long run. Politics, unfortunately, operates the same way.
Don’t invest in anything you don’t understand
Who is elected by voters by saying those same voters need to work harder, pay more, and alter their familiar lifestyle in order to make things better in the long run? The answer is clearly, no one. Everyone promises that you can have your cake and eat it, too. We know it’s a lie, but it’s a lie we want to believe. It’s a lie that can temporarily be justified and reasoned away, much like our dieter does when promising, “Just this one last time,” or, “I’ll work out extra hard tomorrow,” but never following through. We can find ourselves inside a hamster wheel running really hard, but never getting anywhere because we can’t see the obvious right in front of our eyes and step off the wheel. The first step in freeing ourselves and this country from this endless treadmill of emotional prison is to promise ourselves that we will seek out the truth in all things, no matter how powerful and painful, and look for logical solutions to fixing the problems discovered. There is simply no other path. This is what many in AA and substance abuse counseling find to be the hardest aspect of their recovery.
Why am I bringing this up? I bring this up because in my own life of finance things really didn’t make sense until I started to question what I was being told. Here are some conclusions I have arrived at over the years that you can assess yourselves.
1. The very best thing which roughly 85% of the population could do with their money is to first and foremost pay off their homes and debts before they ever begin to think about investing money. Yes, that’s right, pay off your home. It’s not glamorous or sexy, but show up at a cocktail party and drop the bomb of “I don’t have a mortgage payment or any debt” and the room will become as quiet as an old EF Hutton commercial to hear the next few words out of your mouth.
2. Maximize contributions to any retirement account available to you, either through work or individually, because even if you’re afraid of losing money and keep all of yours in cash, the tax savings will amount to a higher rate of return than almost any fixed-income product out there.
3. Don’t invest in anything you don’t understand.
4. Don’t lend money to friends. In my own life, I more often than not witness people with the best of intentions harm both personal and family relationships beyond repair. It is gut-wrenching and will profoundly affect you for the worse. (I actually first heard this one on an old “I Love Lucy” episode, but had to learn this lesson the hard way.)
5. The Government and Big Business will never, ever be completely honest about even the smallest matter. Their surveys, their figures, their ingredients . . . I could go on to list pages of evidence here, but I would need an encyclopedia’s worth of paper to do that. One of the most recent examples is the horse meat scandal. If “authorities” would allow this to “slip through the cracks,” then what other things are they covering up so as not to alarm the public?
Please think of these things and reread them a few times to let them all really sink in.
P.S. The part about commitment to the truth in all things I got from Jean Luc Picard on a Star Trek: The Next Generation, one of my favorite shows of all time.
