As much as we bemoan the high costs of higher education, we reserve our highest regard for the quip, “If you think education is expensive, try ignorance.” In fact, there’s a telling anecdote about this quote that we’ll get to in a moment. But first to our main point: We continue to believe that basic financial literacy is every investor’s best defense against making costly investment mistakes.
In a recent back-to-school post, we shared several ideas on priming the pump for your and your kids’ financial literacy efforts. Since then, we came across another resource we wanted to add to the list. FoolProofMe.com not only contains a wealth of approachable personal finance ideas, but it’s available at no (zero) cost. We also love the catchy name, which says it all.
Now, back to that story about the aforementioned quote, “If you think education is expensive,” etc. When we Googled it, we found several sites attributing the quote to Derek Bok, attorney and former Harvard University president. On that “evidence,” one might conclude that Bok is indeed the source. But scanning the vast majority of these attributions, we realized that none of them contained any sourcing. They lacked the solid evidence required to truly substantiate the claim.
So we dug a little deeper, and found this mea culpa piece from The Chronicle of Higher Education. It turns out, even if it was a sentiment he agreed with, Bok himself denied having ever said it. Apparently, his friend Eppie Lederer (“Ann Landers”) attributed it to him in one of her columns and then later retracted the claim. Bok dryly observed, “As usual, the truth has yet to catch up with the perception.”
We can draw several parallels between this experience and some additional pointers about financial literacy.
Proceed with caution. Just as it’s easy to leap to false conclusions based on widely held misperceptions about a popular quote, there is a great deal of misinformation out there posing as financial truth, even as it flies in the face of the real evidence. In short, just because someone says so on the Internet doesn’t mean it is so – even when it’s been widely accepted as being so.
Not all information that is free is of worth. Free, public “advice” can be of great value … or not. For every excellent free financial resource we find on the Internet, we could point to countless others that, at best, are not worth the screens they’re printed on and, at worst could cause serious harm to your financial health.
Informed advice can be worth every penny. How do you separate the bounty of free, on-line financial wisdom available these days from the even greater ocean of dangerous deceptions? This is where it can help to have access to an advisor who has been there, done that, to help you differentiate the wealth from the worthless. A quality advisor should be able to do more than just give you a general “thumbs up or down” about a resource; he should be able to help you understand the substantiating evidence. She should not fear your learning the “tricks” of her trade, because a financially literate investor will only appreciate the value of such an advisor alliance all the more.
In short, whoever may or may not have said it first, we believe in the shared value of education over ignorance, especially when it comes to managing your money.
For more information or to set up a consultation, contact Pathway Financial Planning at or email email@example.com.