Hilarious money advice that makes me want to die

Ramit Sethi

You cannot imagine the kind of articles I run across about money. Today, a small window into my inbox. I think you’ll admire me for not turning into a homicidal maniac considering I read 50+ of these every day.

1. “She suggests peppering your teen with daily finance texts…”

Let’s start off with this post from ING Direct.

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This …financial educator…”thinks parents should use this to their advantage and harness the teens’ texting obsession to help them learn about money. [She] suggests peppering your teen with daily finance texts, because guess what? They’ll actually read them.  Some of her suggestions for clueless parents include little gems like:

  • “Just deposited ur allowance to ur checking account. JW how much money u want to deposit in ur savings account?”
  • “TTYL about wat ur going to do with ur bday money from gma and gpa. LTS. 2nite at dinner?”

Ramit’s comment: I am going to supply my future children with a gun and ask them to summarily kill me if I ever do this.

2. Young clueless Redditor has no understanding of how money works:

  • Quote 1: “If you can’t afford to retire after making $170k for ten years or so, you are the worst money manger on the planet.”
  • When challenged by minor things like taxes and costs of living, he responds with…
  • Quote 2: “Ten years of $170k. Live on $70 (still far better off than most!). You’ve got one point something million. Invest in corporate bonds at 6%, so you’re getting $70k per year on interest alone, forever.”
  • As he gets further challenged about taxes and other issues that any ordinary person who earns money (and is not a privileged, sanctimonious college student) would understand, he responds with even more amusing logic

Ramit’s comment: Everyone has an opinion about other people’s spending. Unfortunately, not only are they indignant, they are almost always wrong. Give me 10 minutes with any of these patronizing people and I will find at least 30% of their spending that is a “waste.”

3. Arrogant people think they can beat the market.

This happens a lot with smart people, especially in technology, because they see the stock market as a problem that can be broken down and out-logic’d. Unfortunately, it doesn’t work like that.

Ramit’s comment: The best part is your smart friends will brag about their stock returns…but when their investments go down, suddenly they won’t be talking about their investing acumen anymore. I just nod and smile now.

4. These day traders won’t realize they’ve been losing money for years.

How can that be? How can you not realize you’re losing money for years — even decades? Just the same way that people who buy real estate can (note the haunting quote at the end).

Ramit’s comment: Another area of money where people’s beliefs in their own ability is almost religious — even when data convincingly demonstrates that almost nobody can consistently beat the market. The “But I Am A Special Snowflake!” phenomena is alive and well in America. We need a new TV show with Tiger Mom laying down the law for these people from birth.

5. Finally, my favorite.

Amidst all the turbulence, all the discord, all the staggering negative economic data, one author had the flicker of a powerful idea. This idea took years to develop as she nurtured, focused, and refined it. Finally, the result of countless hours and innumerable long nights…

An article on cutting back on lattes.

Key quotes:

  • “By saving $3,000 every year — that’s $250 a month — you’ll have a nest egg of $90,000 in three decades. Those who invest and beat inflation will enjoy greater gains than others.
  • “People aren’t doing this because they are obstinate or defiant. They are doing this because they don’t realize the harm they are doing themselves.”
  • “Spreading peanut butter on a slice of bread and brewing a cup of coffee during the hectic morning rush are small but important financial gestures.”

Ramit’s comment: Oh my god. Do we think there’s one American who hasn’t been guilted into thinking their small $3 purchase is a horrific Satan-spawned communist idea? It’s easier to believe that people “just don’t realize the harm they are doing” than to actually dig beneath the surface. Just like fat people don’t know they’re fat, right? This canard is why personal-finance “experts” continue giving horrible advice.

Ugh. I am going to decide if I want to continue writing this blog or simply move to a deserted island, never to see the face of technology or another “expert” again. See you guys later.

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  1. Eric S. Mueller

    The “beat the market” mindset drives me nuts. I can’t tell you how many friends I’ve had that say “Yeah, I really need to get started investing. I just need to figure out which stock to buy”. I’ll suggest picking some index funds and investing for the long term and get back “Naw, that’ll never work. I just need to find the right stock”.

    Yeah, make sure to diversify by investing in lottery scratch-offs too.

    • Taline

      That’s hillarious! Your friends must be friends with my friends! 🙂

  2. Susan

    Don’t you hate people who spend money on lottery tickets who could use that money for better things? Even when I try telling them that the odds of winning are the same as praying to an ATM for it to spew out cash, they don’t believe me.

    Please keep up your website. Your advice is sound and rational.

    • Ramit Sethi

      Lottery tickets are an entirely different beast. Imagine you make $35K/year. Why might you buy a lottery ticket, KNOWING you won’t win?

      Hint: It’s not logical. It’s actually pretty rational.

    • Scott

      I would say that people buy lottery tickets for the same reason they buy a ticket to the movie and overpriced popcorn. Entertainment. Any time I’m in Vegas I gamble knowing that I’ll most likely lose money, but it’s fun.

    • pravchaw

      They buy a fantasy. That is rational. Better than smoking cigarettes.

    • Parenting and Money

      I agree with the lottery expense. I see people budget this into their weekly expense instead of just saving money. If you meet someone whose strategy to get rich is to win the lottery, it screams that they have no real plan.

    • Flip Adams

      While I certainly agree that the chances of actually winning the lottery are ridiculously slim, it is the most fun you can have for $1. The daydreams and wonderful conversations I’ve had with my wife as a result of that one dollar are priceless. Yes, we know we’ll never win, but oh the places we’ve been…

  3. Susan

    Thank you for your insight. I check into “Economic Logic,” dated Monday, January 28, 2008. They gave a couple of reasons people might buy a lottery ticket under the conditions you described:

    “John Laitner argues that this is because of the means tests poor people face: buying a lottery ticket will not make them any poorer as they will still stay eligible for social assistance. If they win, however, they can escape poverty for good. Thus, they win in expected terms. In a sense it is about the dream of escaping poverty, and it is close to free.

    John Morgan argues that lotteries, as long as they help in providing a public good, can replace efficiently taxation. Lotteries work better that voluntary contributions. John Morgan and Martin Sefton confirm this in a laboratory environment. Rob Moir, also in experiments, shows that this reasoning may collapse if there other public goods to be financed.

    Bruyneel, Dewitte, Franses and Dekimpe try to show that people play lottery more when depressed, say, because of reduced sunlight. Thus lottery is fun, especially when life is not fun.”

    BTW, as a writer, logical and rational are used as synonyms. Could you please explain how the terms differ in economics?

  4. Russell

    In response to #3, thought you might enjoy this comic:

    Reminiscent of a Warren Buffett quote, something like: “Beware of geeks bearing formulas”

  5. BV

    I’m not sure I see the Reddit ridicule.
    Ramit: were you annoyed because of the fact that this comment was made not taking into account any specifics, e.g. tax, previous savings, debt already gotten etc?

    Yes, we shouldn’t make fun of others’ financial situations, normally because we don’t have all the details. I think, however, the general point is something *many* people would agree with, which I think you have failed to acknowledge.

    Yes the savings from 170K won’t last the next 30 or so years of retirement (generally speaking), but that’s not the real issue. The *point* is about people’s psychology/understanding of money.

    You, Ramit, earn over 100K, but many people don’t. Many people cannot even imagine earning that much, and so don’t have a fuller understanding of what is “rich”, with all that it entails (taxes etc). To be honest, those who think about earning 100K or more imagine that they’d be really careful with their money – and so may be mean to others who they think are irresponsible. [If you really want to know if you’d be any good managing 100K take a look at your current financial situation before criticising others, I’d suggest.]

    Personally speaking, 100K isnt a salary that freaks me out or seems unattainable, and my viewpoint about what is “expensive” is probably more in line with yours, Ramit. But most people cannot see that, and it’s not really their fault.

  6. Nick Chertock

    Good points all around. I live in San Francisco. Making $170K means you might be able to sock away a little every year. Kids and houses and taxes take a bite.

    What annoys me about the lottery tickets is that certain convenience stores where I go in to buy a Red Bull from time to time (and no I don’t feel guilty) have a line of people just buying lotto tickets. I think they should be sold through machines only so I don’t have to wait in line behind these dreamers. The lottery is often called ‘the poor man’s tax’ but if it gives them a bit of joy then who am I to take it from them. But thinking that the lottery is your only ticket out of poverty is a dangerous pattern of thought that will prevent you from making anything of yourself.

  7. rkt88edmo

    I think you’ve only mentioned giving the government an interest free loan once so far this tax season, c’mon Ramit, where is the INTEREST FREE GOVERNMENT LOAN rage?

    All that interest being lost – why it is collectively millions of dollars a year! 😉

  8. JP

    Have my babies Ramit. This post was awesome man.

  9. Financial Advice for Young Professionals

    You are on point today man! I always laugh when people give me stock tips or tell me how their stocks are killin’ it! Just wait buddy haha. (I used to make these mistakes too though until I learned better!)

  10. Brandon Adams

    Why do older people send such unintelligible text messages?

    • cc


  11. Noah Bradley

    The universe is not lacking in idiots.

  12. Anand

    Ramit’s comment: I am going to supply my future children with a gun and ask them to summarily kill me if I ever do this. ===> LOL.

    I read this at my office and started laughing badly. I infact imagined that particular scene. Thank god, I wasn’t drinking coffee while I was reading it.

    But you were on the dot with your comment on that post. Do you have any suggestions on teaching kids about healthy financial habits?

  13. Brian

    “She suggests peppering your teen with daily finance texts…”

    I bet she would have realized this is a silly idea if she found ONE family to test it for a week.

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  15. Paul Agapow

    The latte (coffee / Starbucks / etc.) tip is one that I’ve come across multiple times, but has seemed curious to me in other ways:

    – Exactly how much coffee are you drinking that you think cutting back on it will make you rich?
    – If it’s costing that much money ($250 a month – that’s 10% of some peoples salaries), how did you not notice this before?
    – If you’re drinking that much coffee, are really enjoying it? And finally:
    – If you’re drinking that much coffee, why the hell are you buying it from Starbucks? Don’t you like coffee?

  16. Mike Hernandez

    Walter Schloss just passed away late last month. He beat the market for 50 yrs straight. I wish people were more careful with the word “can’t.” Most folks don’t earn more money on the side. Most people don’t optimize their spending or automate their saving. Most people don’t identify and pursue their dream job with an effective approach. But if don’t = can’t, there wouldn’t be much point to this site, would there?

  17. Nick Chertock

    Mike Hernandez: Bad example because all those other “don’ts” rely on choice whereas beating the market every year is mainly a matter of luck and so few people pull it off that it’s not worth qualifying the statement. It’s much better to make people aware of the fact that unless they are on the level of Schloss or they hire someone with that kind of insight, they should not expect to be able to RELY ON beating the market in order to gain ground in their retirement returns.

  18. Andrea

    “She suggests peppering your teen with daily finance texts…”

    Clearly the person who suggested this does not have a teenager, nor have they ever met a teenager. Or been a teenager.

    As a mom of an 18-year-old, I *promise* you that this is *laughable*!

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  20. Long-Term Returns

    All of these right on (well, except I don’t know what to make of teenage finance texts). Living off $1,000,000 invested in corporates will support $25K/yr lifestyle at best (if that) with a 50+ year horizon, thanks to inflation! Day-trading and/or try to beat the market is a self-inflicted slow financial death because it’s a zero-sum game during which you bleed all sorts of frictional costs — spreads, commissions, taxes, and whatever you spend on all the brilliant “programs” and newsletters. It’s very sad that most people completely lack the numeracy and basic investment skills to understand these. They don’t require anything more that high-school algebra level analysis.

    Overall, I have to say I expected a ton of b.s. because of your site’s name, but your financial advice is solid. Congrats on the successful blog and not selling your soul in the process!

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