My Most Controversial Financial Advice
I started this blog in part because I thought internet financial advice was wrong or outdated or at least incomplete because it didn’t apply to someone like me. And without necessarily meaning to, my most controversial posts are the most popular because there isn’t much competition for these views. Maybe this is the lawyer in me, but I’m incredibly proud to be defending these fringe opinions.
1. College isn’t worth the cost.
When people talk about college, they only discuss the best case scenario – graduation, a good job, manageable debt. But as a lawyer, I tend to think of the worst case scenario – no degree, bad job, high debt. So how likely is this latter scenario? 73%! 58% of college enrollees do not graduate and 15% of graduates end up in low-paying jobs with high debt. Sure, maybe you’re a smart kid and your parents are wealthy and have connections. You will likely be in the 27% – the percentage where college won’t hurt. My advice is for the students who could start their lives with insurmountable debt that will follow them for decades.
There’s a growing movement to cancel student loan debt, and it’s not because these former students are swimming in salary and opportunities.
Personally, I would encourage high school seniors to try a wandering path to their dream jobs. College will still be there later.
2. Law school doesn’t pay off.
This is less controversial than the college article. It’s not even controversial among lawyers. Lawyers are notorious for being unhappy, law school is much more expensive than college, and many people only go to law school because they couldn’t find a good job after college (see #1 above). Spending six figures on tuition to work 80 hours/week at a job you hate to pay off your law school loans? I don’t even know why I felt like I needed to write such a long article about such an obvious topic.
3. Asians aren’t Cheap.
I wrote this as a joke but it’s gotten popular because people seem to search for “why are Asians so cheap” quite often. It’s not cheapness but a difference of personalities. It’s easy to judge others’ financial decisions incorrectly based on your own perspective.
4. Follow Your Passion
We’ve all heard stories about people who are struggling to get by because they’ve decided to chase a far-off dream. But most of us chased money and ended up stuck in well-paying jobs that make us miserable. If you chase your dream, you can go somewhere dream-adjacent. We spend a lot of time, a large proportion of our lives, at work. Try to find something that could be amazing for you.
5. The 50-30-20 Budget is Stupid.
While I think Senator Elizabeth Warren’s Two-Income Trap is extremely interesting, I’m less of a fan of her advice about budgets. It doesn’t take into account the wide range and ever-changing needs and goals of households. It doesn’t make sense to prescribe set percentages to singles, parents, childless, multiple children, low-income, high-income, etc. Personal finance should be personal and this 50-30-20 budget is not.
6. Stuff Can Be Better than Experiences.
Saying experiences are better has launched a series of FOMO-enthusiasts who seek to visit every country in the world – to what end? It’s not to expand their horizons but to check off some bucket list of bragging rights. Having the right stuff can be just as fulfilling and contribute to a more meaningful life and more meaningful experiences.
7. Fear is Killing Women’s Finances
Women are encouraged to be fearful, and that fear can hurt us more in our lives and in our finances than whatever it is we are supposed to be afraid of.
8. The Latte Factor is Crap.
I’m not encouraging anyone to buy an expensive coffee drink every day. But there should be a hierarchy of personal finance tips. You should start with choices that save a lot of money without a lot of effort or sacrifice – like reducing housing, transportation, subscription, utility and/or insurance costs. Usually one decision means you could save hundreds or thousands of dollars a year. After you’ve cut all those items, that’s when you can start looking at little expenses that require lots of effort or sacrifice – like saying no to coffee every day.
9. Women Should Pay In Their Relationships.
It kills me a little when women champion feminism and then use it as a tool to get a free dinner. It’s like selling your birthright for a bowl of soup. They say there’s no such thing as a free lunch, and this is true here. Because we are reciprocal creatures, when we receive something, we feel the need to give something back. So the initial giver might actually make out better in the end. That’s why women need to be careful when being treated while being courted.
First and second dates – sure. But when it gets to a real relationship, there needs to be more financial parity in order for there to be equal power.
10. Frugality Doesn’t Work.
What I consider a good use of my money is going to be very different from what you consider good. I remember reading a list of “appliances that aren’t worth the money” and one item on that list was a rice cooker. But of course, the person who wrote that wasn’t Asian and didn’t realize the wonder that is the rice cooker. It’s not that the list is wrong, but it didn’t apply to me. Frugality to you is extravagance to me. All we can do is determine what we individually value and not take financial advice from those who have a very different value system from ours.
11. Early Retirement Isn’t For Everyone.
I’m so glad I took a two-year career break. I would recommend it to anyone. If nothing else, it makes retirement seem tangible. But for me, I’m happy to delay retirement until I’ve prepared emotionally and spiritually for it.
12. Be Generous to the Needy.
To many people, personal finance is about accumulating money but for me, personal finance is about creating a life you want and becoming the person you want to be. Giving to the needy is something I value and encourage, because it gives you a tremendous feeling of abundance. Giving directly to the needy also allows you to suspend your judgment of others and believe in our shared humanity.
13. A $500k Salary Won’t Solve All Your Problems.
This one is controversial because I know how life-changing $500k is. I’m not trying to discount how money can save problems. But I know people who make this level of money and they have their own sets of problems.
14. Don’t Keep Secret Money Accounts from Your Spouse.
There are certainly women who have been left destitute when their spouse made off with their money. That still doesn’t justify being the spouse that steals first.
15. Bargain Hunting is Making You Broke.
The only way to save money when shopping is to ensure that you are only shopping for things that you need. The problem with bargain hunting is that you’re often shopping for things that you don’t need, and getting a deal on something you don’t need might not be a deal.
16. Renting is Not a Waste of Money.
This is a classic nugget of wisdom from Boomers who think back about what they could have done if they just owned earlier. But a good decision 50 years ago wouldn’t necessarily be a good decision today.
Based on the costs of owning, maintaining, buying, and selling a home compared to the cost of renting, the performance of the stock market, the instability of most jobs and relationships, and the mobility and opportunities for younger generations – renting is often a much better financial and life decision for many people.
Best case scenario – you buy a house that’s as affordable and attractive as a rental and stay for at least 10 years. Possibility – small in most metro areas. A more realistic scenario is you buy a home that’s a financial reach but still must make major concessions in age, repairs, HOA fees, and commute, find that you want to get married/start a family/take a new job. You sell this home for a loss and then keep this buying and selling routine until your kids enter grade school.
17. Marriage Is Often a Bad Financial Decision.
The typical response from the olds is that you have to get married. I mean, yes, it can be a great decision if you don’t get divorced and you’re happy. But that’s a big “if.”
For men, marriage is often worth it because married men tend to make more, perhaps because they have a supportive spouse. For women, marriage usually downgrades her career and increases her housework (higher for married women even in comparison to single mothers).
My Most Controversial Financial Advice
The final controversial advice is that, even my advice isn’t universal.
I tried to think of universal advice, and I couldn’t get any. Generally, you should save a percentage of your income and invest in a diversified portfolio. But some people invest all their money into one amazing endeavor (think, Jeff Bezos) and turn out ok.
People can get rich sitting on their couches playing video games (see, Ninja). Others have made a fortune on bad stocks (see, Gamestop and AMC investors). On the other hand, many people do all the “right things” – go to college, get a steady job, buy a house, get married – and end up scraping by. The personal advice that works for you is whatever resonates with your values, helps you achieve your goals, and offers a practical and doable plan. These personal finance gurus have nothing on your own judgment for your own life.