This post is 100% inspired by a blog post I found on Forbes.com
It was written by J.D. Roth of GetRichSlowly.org.
To say it resonated with me would be an understatement. His views on money mirrored my views on weight loss so closely that I’ve decided to ‘commentary’ on his post here on my blog.
Below you will find J.D.’s original article, with my comments in [Blue]
Today I’m going to rant.
I get a lot of requests from reporters who want quotes for their stories about personal finance. That’s fine. I’m happy to help when possible. What bugs me, though, is that nearly every single reporter pitches her story with the same caveat: “I need tips about saving, but I don’t want the same old stuff. I need new, unique ways to save money.”
[The weight loss and diet industry is no different. People want stories and articles about weight loss, but every request for help comes with the same caveat: “I need tips for weight loss, but I don’t want the same old stuff. I need new, unique ways of losing weight” and I’m sure J.D. would agree when I say that this is largely because the new, unique ways move magazines and sell books]
“New, unique ways to save money” have become the bane of my existence. I loathe these requests. Why? Because the basics of personal finance never change. They haven’t changed in thousands of years, and they’re not going to change for thousands more. Fundamentally, all you need to know about managing your money is this: Spend less than you earn.
[Obviously, if you visit this blog with any regularity, you know how I feel about the basics of weight loss. No matter how many tricks and tips are invented it will always come down to spending more energy then you eat]
That’s it. If you spend less than you earn, you’ll do fine. Everything else is details. Those details are important, I know, but most of them are common sense and widely known.
Reporters don’t want to hear that the best ways to save money are to cut cable television (and other monthly expenses), start a vegetable garden, clip coupons or buy a used car. No no no. These ideas aren’t good enough. So, you end up with articles that claim they’ll save readers $5,000 a year — but only if you can get rid of your hot tub or ditch your pet ostrich or give up the vacation home on the lake. In other words, by constantly striving for new, unique ways to save money, reporters make their articles mostly useless.
[Similarly, very few people want to hear that weight loss is mostly about eating less. It HAS to be about hormones and meal timing and burning an extra 5,000 calories every day]
Instead, I think reporters should have the guts to promote the basics. Why? Because they work.
The basics of personal finance
We’ve covered this a zillion times before — including a four-part series in April during which I described my core financial framework — but let’s do a quick review.
Smart personal finance can be reduced to one simple equation:
If you spend more than you earn, you have a negative cash flow. You’re losing wealth and in danger of going into debt. (Or, if you’re already in debt, you’re digging the hole deeper.) If you spend less than you earn, you have a positive cash flow, which will let you climb out of debt and build wealth.
[If you consume more than you expend, you have a positive energy balance. You’re gaining energy and in danger of gaining body fat. (or, if you’re already overweight, you’re digging the hole deeper.) If you consume less that you expend you have a negative energy balance, which will let you climb out of debt and build health]
So, basic personal finance comprises three essential skills:
- Earning — Your ability to bring in money. This skill requires resourcefulness and a willingness to work.
- Spending — Your ability to live frugally and spend wisely. This skill generally requires sacrifice and the ability to prioritize.
- Investing — Your ability to produce a surplus and to make that surplus grow. This skill takes patience and research.
- Consuming – Your need to eat. Managing this requires a degree of mindfulness. Changing major habits takes some serious work.
- Expending – Your daily life and Exercise. Prioritize your workouts to your goals – expend but expend wisely.
- Lifestyle – Your ability to eat a little less and move a little more. This takes patience, research and practice.
Spend less than you earn — invest the difference. That’s all you need to know. The rest is developing the mindset and skills to make these things happen.
[Eat Less, Move more, while enjoying the foods you eat.]
Missing the point
Last Tuesday, I did yet another interview with a reporter who was looking for new, unique approaches to personal finance. Her e-mail said she needed finance tips for new college grads. “I don’t need the obvious stuff, like ‘save money, spend less’,” she wrote. “I’d like to tell readers something they don’t already know.”
[sound familiar? think about this statement the next time you read about the LATEST amazing fat-burning hormone]
When I spoke with her, the truth was even worse. She was looking for advice on things recent graduates should buy. “When you’re out of college, you don’t have much of an income, and you may not have a job. If that’s the case, what should someone spend money on?” she asked. I was dumbfounded. I offered some lame answers — it’s okay to spend on a wardrobe (if your job requires it) or further education — but in the end, I gave up.
[Think: ‘What should you eat to lose weight?’ or ‘special fat burning foods’]
“To be honest,” I said, “I think it’s dangerous to do a story like this. In essence, you’re giving young people permission to spend, even if they don’t have the money. That’s the road to debt.”
[So the question becomes – ‘is it dangerous to give out similar weight loss advice – giving people permission to eat more than they need to, sometimes A LOT more?’]
Note: I don’t mean to pick on this one reporter. She’s just fresh in my mind. Her requests and approach are very, very typical of most other reporters I’ve talked with.
Nothing new under the sun
This is what happens when you’re constantly trying to find new and unique ways to save money. You start by chasing narrow niche topics (“The pitfalls of insurance if you carshare”, “How to save on silk underwear”, “How the BAH helps military members afford a home“) and eventually you’re writing nonsense like “10 things every college graduate should buy”.
I reject the relentless push for new, unique money tips. They’re few and far between. Besides, there are millions of people who can profit from hearing the old advice. For many, the old advice is new advice. And even those who’ve heard it many times before can benefit from hearing it again.
If you want to write a story about personal finance and you’re worried that readers will be bored because you’re covering the same topics everyone else has covered for the past hundred years, the solution isn’t to look for new, unique ideas. The solution is to find new, unique ways to convey the timeless information that works. Find real-life examples (like the GRS reader stories). Explore government statistics. Find a new angle into the story (psychological? religious? political?). But don’t turn your back on the basics just because they seem tired and worn out.
[Absolutely fantastic paragraph that can be echoed in weight loss – We can stop scamming people with ridiculous stories, and start helping by finding new unique ways to explain the basics, and find innovative ways to help people apply the basics – admittedly, this is the crux of Eat Stop Eat – a simple, flexible and effective way to reduce calories]
The basics are the basics for a reason. And until everyone grasps the concept, the fundamental formula of personal finance needs to be trumpeted from the rooftops: To build wealth, you have to spend less than you earn. It’s not new. It’s not unique. It’s simply the truth.
Bottom Line – Probably the two most important aspects of your life – health and wealth – they are eerily similar. Proper management is almost identical. The fact that people are trying to find new unique things to say – just to entertain you is also almost identical.
The one point I need to make is that obviously constantly eating less will end up reaching a point that is unhealthy. But the point of eating less is that allows you to eat MORE on occasion. Celebrations and the like. But then again, this is similar to wealth management – the point of buidling wealth and growing your money is so that you can eventually spend on the things that are important to you.
So again, the fundamentals are the same.
Original article is here:
J.D. Roth’s website is here:
My other posts of fat as debt here: