Financial Planning Advice From The Onion

Sam Swift, CFA, CFP®, AIF®

Nov 15, 2021

As a fan of dry humor, The Onion–a satirical news outlet—has always been something I turn to when I need a laugh. They offer biting parody that generally cuts to the heart of topical news stories, but years ago they had a piece about financial planning. My heart sank when I saw the headline because I knew exactly where this was going.

Nation’s Financial Advisors Recommend Capturing Magical Creature That Grants Wishes

CHICAGO—Calling it the most reliable strategy for ensuring financial stability in the current economy, a report released Thursday by the National Association of Personal Financial Advisors recommends that middle-class Americans capture a magical creature with the power to grant wishes. “Taking into account the average American’s present level of savings as well as prevailing market conditions, there simply is no sounder choice individuals can make than venturing into a hidden glen or cavern, luring an enchanted creature from its dwelling, and then apprehending it and using its offered wishes to build a solid financial plan for the future,” said researcher Alison Knox, who explained that whether the wishes were acquired by sparing the life of a talking golden fish, rubbing an ancient Arabian lamp, or intoning the name of a woodland troll backwards to make him one’s captive, Americans would be wise to set aside one of their wishes for an ample 529 college savings plan for their children and use another wish on a well-funded retirement account.

The Onion

The Onion’s best articles have a measure of truth behind them, and this one is no different. This article works so well because it capitalizes on a few themes we see regularly: many people have a negative view about their own financial situation, a lack of ability to navigate the financial services industry without getting taken advantage of or spend too much time worrying about the daily direction of the markets and end up not investing. The author of the article knows that if a task in front of you appears overly daunting, then it can seem like capturing a “wish-granting magical creature” is the only way forward. Let me try and dispel some of those fears.

Changing Attitudes is Challenging

Admittedly there isn’t much I can do about someone who has a negative view about their current financial situation. Nor should I because I haven’t taken a glance at their bank account or understand how money fits into their life. However, as a supporter of everyone making smart financial choices, I can say that (hopefully) it isn’t as bad as you think and there is no better time to make a change than right now. A bad financial situation will only get worse the longer one puts it off.

Fear Around Financial Services

As for the concern that the financial services industry is just waiting to confuse and get rich off people, well…I wish I could counter that concern more forcefully. Unfortunately, that’s a fair criticism for a lot of the industry, but the good guys are growing. Here are some rules of thumb when beginning to search for a financial advisor.

  • Are they transparent about their fees?
  • Are they a fiduciary?
  • Meet with a couple advisors and research everyone you meet with.
  • Determine what you’re hoping to accomplish on your financial journey.

If you don’t understand why or what you’re being charged, it’s fair to say you should re-examine your situation. Furthermore, it’s mind boggling to me, but all advisors aren’t necessarily a fiduciary (someone who is legally liable for putting your interests ahead of their own).

It is impossible to get rid of all the bad actors in the industry who ultimately ending up casting the largest shadow over the industry. So, if you’re someone who has had a good experience with a financial planner please help and be an advocate for our industry and share your experience.

Inaction Due to Market Watching

The pessimism regarding the long-term direction of the markets is a valid concern if all one did was read financial headlines or if one’s only investment experience was in U.S. stocks from 1999 through the bottom in 2009. To repudiate this mindset, I’ll break out one of my favorite facts. The market has drops of over 10% about every 11 months on average. Despite this, it has close to a 10% annualized return over the last 95 years. It’s going to be bumpy, and things may look unsettling from time to time, but the long-term power of the markets isn’t going away.

Despite the parody, if you sum all of this together, I think the “magical creature” does exist. It exists in the sense of starting to invest early, spending less than you make and saving the difference, trusting the long-term power of the stock market, and keeping your investment fees low. By no means is this a guarantee but we have found this a successful recipe for more than 30 years. Hopefully this gives you some guidance so you can stop chasing the “magical creature.” Ideally by stopping the worry around your finances you’ll find that you have more time to focus on improving the odds that other dreams come true.

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