Personal finance author gets us talking about money

As the author of “Pound Foolish: Exposing the Dark Side of the Personal Finance Industry” Helaine Olen has strong views about money management.

This week, journalist and author Olen is the keynote speaker for the Pathways 2013 conference, presented by UW-Extension, Cooperative Extension and the UW–Madison Center for Financial Security. The conference has moved online with more than 200 participants from across the globe sitting down to their computers to have a discussion about financial security.

Olen’s keynote can be streamed live at 9 a.m. Wednesday, June 5.

Olen recently participated in a Q & A sharing her views on the industry.

Q: To what extent do you think we are personally responsible for our personal finance picture — especially when there’s an entire industry and too many products to count that are meant to improve our overall financial well being?

Olen: The answer is not as much as we think. We live in a country with extremely limited class mobility and one where the more resources seem to be going to the older members of our society than the younger ones. All too many of us are congratulating ourselves on our savvy financial skills when in fact we should be thanking the gods for our luck — luck at being born in a particular place, class or time. As for that entire industry that you say is meant to improve our overall well being? I would disagree with that, at least in part. That industry is all too often most engaged with its own well being. Very few of us have the ability to know when that is or isn’t occurring — the same way very few of us have the ability to figure out if a car mechanic is honest or trying to line his own pocket at our expense.

Q: What are a few main takeaways that you hope consumers get from reading your book? And what about takeaways for the industry?

Olen: The takeaway from my book was that you are not irresponsible and you are not alone. There is nothing more empowering than the ability to manage your money but, in the end, it is simply an adjunct, allowing us to hopefully improve our financial position. But there is no personal finance or investment scheme that can protect us from income stagnation, wealth inequality or plain old bad luck. That’s the takeaway for the industry too.

Q: What do you think is the next “bubble” that we need to worry about in terms of personal finance?

Olen: If I knew the answer to that, I wouldn’t be here! I’d be on a yacht off the Cayman Islands, trading happily on the tax-free seas. And, that, I should add, is another point of my book. No one knows the future. No one. That being said, I’m sure suspicious about bonds, but that doesn’t make me unique. It also doesn’t mean I have an answer to where you should put your money to keep it safe.

Q: Throughout the process of researching and writing the book, did your own opinions about money and finances change?

Olen: Yes, two things: On the small scale: I began to think about using my money in ways that make my family and me happy in both the short and long-term. I don’t spend any less but I am happier with what I get for my money. As for the bigger picture, it doesn’t take a lot of thinking about the book to realize I am quite pessimistic indeed about our current prospects. The long-term trends are not good, and it would take a real societal shift for things to change. That doesn’t mean I don’t think they will. But just to understand: things are so bad at the moment; students pay to take non-paying internships. We seem to be powerless to do anything about student debt. It’s horrifying.

Q: What role do you think technology will play in changing the way we approach and manage personal finance?

Olen: I don’t know the answer to that. I suspect, like all things, it will be a mix of good and bad. Technology has brought us the index fund and the ability to charge consumers for advice in different ways. On the other hand, it’s also brought us day trading, high frequency trading and all sorts of not great innovations like synthetic CDOs. Again, we have this idea that technology can fix human nature when, in fact, it is simply a tool of human nature. No more or no less.

Q: Is there universal free financial advice that you learned from your research that can benefit people?

Olen: No. Nothing in life worth having is free.

Pathways 2013: Financial Capability over the Life Course is sponsored by Edvest and CBM Credit Education Foundation.