Financial Secrets (Part 2)

Today I will conclude with excerpts from Dr. Sarah Newcomb’s article in the Sep 2016 AAII Journal.

     > Financial skills are not easily learned when
     > communication is opaque, and experience can be
     > a ruthless teacher. Leaving loved ones to
     > learn about money management ‘the hard way’
     > may mean they learn too late, or not at all.
     > Remember that even a third-tier topic of
     > conversation is perfectly acceptable to
     > discuss with intimate relations. Neglecting
     > to speak out on financial matters with
     > spouses and loved ones may well be an act of
     > avoidance rather than tact. If we want to
     > leave a legacy of strength and stability, we
     > be brave enough to challenge the culture of
     > silence and speak plainly with our loved
     > ones about money [italics mine].

Dr. Newcomb later mentions data from an American Express study:

• 91% of couples avoid discussing money with their partner
• 80% of couples have at least one partner actively hiding financial information from the other
• 50% of baby boomers claimed never to have discussed money with their children
• ~70% of parents claimed to feel more comfortable talking with their teens about sex than about investing

Dr. Newcomb goes on to say:

     > Silence may be comfortable today, but our
     > spouses and children will feel the impact
     > of our financial legacy when we are gone.
     > Rather than bequeathing confusion and
     > hardship, opening the door to financial
     > discussions can help prepare them for that
     > more difficult transition. The same holds
     > true when your financial picture is bleak.
     > Sheltering loved ones from difficult
     > realities will not help them cope.
     > Speaking the truth, however painful, is
     > more loving than presenting a pretty
     > falsehood.

I suspect Dr. Newcomb has some powerful lessons for all to learn in her words on this topic.

And on the grand scale, I feel the financial industry promises too much while delivering too little. This takes place at a self-perpetuating cost that people happily pay because the opacity of the subject matter blocks them from knowing any better.