fast
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| Little Johnny |
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Some people say that Little Johnny just ain’t all that bright. Yes, he knows he shouldn’t be doin’ some of the things he’s-a doin’, and he knows he oughta be-a doin’ some of the things he ain’t, but still, he keeps on makin’ it day to day and paycheck to paycheck like so many others.
Little Johnny never does a budget on paper, and he thinks Excel is what he should do when he sees blue lights in his mirror. He doesn’t save money (must be the speeding tickets, huh!), and he hardly pays on time for anything, but he keeps his lights on (late as the bill may often be paid) and his rent is paid too (behind as it just might often be), and though he gets a bit behind on many-a-bill, every year come tax time, he gets a big refund that pulls him out of the mess he’s slowly gotten himself in. “Thank God for the refund,” he rejoices.
Of course, the smart people in the crowd can see (and so clearly they can see too!) that if only he would alter his W4’s and have less taken out, he would have more money come each payday and thus conclude he wouldn’t be gettin’ in the messes he keeps subsequently gettin’ out of during tax time. The problem with many smart people is that, well, yes, they’re smart, but many of them are, well, merely that, smart—good intentioned and good-hearted as they might be.
How quickly we forget that many of the folks that are consistently in a bind and living on the edge are people from of a variety of income levels. What I’m suggesting is that even though he would have more money, he would also in most likelihood spend more money, and unless he changed the habits and behaviors that continues to put him in dire need of a safety net refund, then what would otherwise be very good advice (i.e. alter the W-4’s), the end result of such a person like Little Johnny following the advice would often lead them to being in a worse situation than had he not followed the advice at all.
Why? Because the assumed change in behaviors didn’t accompany his decision to follow the advice.
I’m not going to ask anyone if there are other oddities in finance whereby good advice is bad advice, as that wouldn’t even make much sense (in fact, it would entail a contradiction); after all, Aristotle wrote, “To say what is true is to say that what is, is, or to say that what is not, is not.” Obviously, if advice is good advice, then it’s not bad advice, but what is good advice for some people may not (I propose) be good advice for some of the people like Little Johnny. I’m no expert on financial matters, but I cringe at some of the commonly accepted good advice that is often touted—not because it cannot be the wisest of the possible choices available to us but because it seems to me that good sound advice is not always good in isolation to other not explicitly stated assumptions.
The assumption in this case (as mentioned earlier) is that he will change his ways and thus be better off for it.
I don’t really have a question. I just thought I’d infuse a little philosophical thinking to see if it might spark some thoughts among others. Truth be told, I’m a bit ignorant (not so knowledgeable) when it comes to many of the nuances surrounding financial advice, but I find the topic of money and finances in general to be intriguing.
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Sat Feb 18, 2012 2:21 am |
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2StepsFwd1StepBack
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quote:
Originally posted by coaster
I don't think there's anything wrong with Little Johnny's intelligence. I do think there's a lot wrong with Little Johnny's education. A person can't be taught everything they need to know about life. They have to learn to educate themselves. The most important thing they need to be taught is intellectual curiosity. And I think that's Little Johnny's main problem. He was either never encouraged, and more likely, was actively discouraged from asking "why" so that he could be pushed through the educational system. And now that he's now out in life, he no longer has the ability to ask why he never gets ahead. He's more likely to take the easy way out (as he learned to do in school) and just blame it on circumstances beyond his control.
Wow. I couldn't have said this any better, myself.
I am Little Johnny just as coaster has described. And if it wasn't for my Intellectual Curiousity, I would be in much, much worse shape than than I am and, probably, not realize it or care.
It's all about education and proving to someone that the impossible is possible.
Good post, fast. 
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Sat Feb 18, 2012 11:44 am |
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fast
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quote:
Originally posted by 2StepsFwd1StepBack
It's all about education and proving to someone that the impossible is possible.
I disagree, but let me be clear on exactly what it is I disagree with.
First, Coaster highlights an excellent distinction, and that distinction is the difference between stupidity and ignorance. Just as there's nothing a doctor can do for the patient whom has already passed, neither can we do a whole heap for those that are stupid; however, there is a cure for ignorance, and the cure for that is knowledge, and one way to acquire one brand of that is through education. Make note, by the way, that in the very last sentence of my opening post, I reiterated (and my point is that I reiterated) that I am a bit ignorant myself when I said, "not so knowledgeable." I never said that Little Johnny is ignorant.
But, didn't I say that Little Johnny isn't bright? Not exactly. What I said is that "Some people say that Little Johnny just ain’t all that bright." And, say it as they might, that doesn't make it so, not even if they say it three times (as once was famously remarked).
So, what do I disagree with then? It's not all (all, you said) about education. Interestingly enough, I even went so far as to point out that Little Johnny knows better. Education isn't his issue. Knowledge isn't his issue. Little Johnny isn't stupid (even though others may think he is). Recall the very first paragraph where I explicitly state what he knows he should and shouldn't be doing. The problem with Johnny is a behavioral problem in spite of his knowing better.
For clarification purposes, let it be understood that people living on the edge are not necessarily the Little Johnny’s of the world. Many of those people just might be better off should they decide to the follow the most often touted advice.
What captures my attention is how good advice seems to be offered as if it’s a one size fits all phenomena. It’s hard to put in words. Maybe this’ll help: What might ordinarily be good advice for a novice driver that finds herself skidding around a wet corner on a back road may not necessarily be the best maneuver that a seasoned veteran should take, but I don’t think the best advice (what we would tell the veteran) is what we should tell the novice, not because we should withhold the best advice from the novice but because the novice doesn’t have the skill-set to handle what happens when the best advice is acted upon. In the same vein, we shouldn’t tell the Little Johnny’s of the world to change their W4’s without at least explaining the dangers. We harp on the advantages of doing what we think is best, but along with doing what we think is best sometimes comes the need to change other things (like not spending more than we make with the newfound money); otherwise, there will be no cushion to protect us from our failed behavior changes come tax time.
Dave Ramsey says to temporarily stop your 401K contributions to speed up the process of getting out of debt more quickly, but even he thinks it’s a bad idea to stop it if it’s not going to be a temporary thing. So, whether you should stop your 401K in this case depends. Never mind what it depends on. What’s important to my point is that it depends.
In my conclusion, I find that what advice is the best advice is not necessary truths but rather contingent truths, that will depend on other factors—that render what’s touted as good advice purportedly good advice.
Of course, this is coming from me, a person who doesn’t really know a hill of beans about giving financial advice. Fun learning it though!
Oh, before I forget. Back to your sentence. Recall, you said, “It's all about education and proving to someone that the impossible is possible.” I’ve already discussed the “it’s all about education” part. As to “the impossible is possible,” and to the surprise of many, that may not necessarily be a contradiction since the words are ambiguous and thus might not have the same referent. But let’s not go there. Funny you should mention, “proving to.” For your amusement purposes only, there is a difference between “proving to” and “proving that.” Seldom does a logician find a need to prove to someone that an argument is sound, for example, as that’s a matter of psychology. “Proving that,” on the other hand is what his job is all about, as an argument is sound independent of what others might happen to believe.
Last edited by fast on Sat Feb 18, 2012 2:27 pm; edited 3 times in total |
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Sat Feb 18, 2012 2:18 pm |
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oldguy
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IMO, Tim's points about education and intellectual curiosity are spot on. Look back 40 years - the US had the top K12 education system in the world, first in math & science - and now we are 28th out of the 28 industrialized nations. Our esteem-based system demands no testing, no competitveness, no orderly curriculum (just permissiveness & 'creativity'). As for curiosity - kids are not allowed to witness physics, no thrown balls, no tag, no monkey bars, no slides, yada - everything is PC to the point of zero adventure, zero risk.
I worked on the engineering team that put men-on-the-moon, I fear that if we started today to again put men on the moon by 2022, we could not do it. The congressional debates, the environmental studies, the ACLU lawsuits, the international licensing, the lack of qualified technical people, would never happen. I can tell you from experience in the 1960s - "zero risk" will not get the job done.
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Sat Feb 18, 2012 4:50 pm |
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fast
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quote:
Originally posted by oldguy
IMO, Tim's points about education and intellectual curiosity are spot on. Look back 40 years - the US had the top K12 education system in the world, first in math & science - and now we are 28th out of the 28 industrialized nations. Our esteem-based system demands no testing, no competitveness, no orderly curriculum (just permissiveness & 'creativity'). As for curiosity - kids are not allowed to witness physics, no thrown balls, no tag, no monkey bars, no slides, yada - everything is PC to the point of zero adventure, zero risk.
I worked on the engineering team that put men-on-the-moon, I fear that if we started today to again put men on the moon by 2022, we could not do it. The congressional debates, the environmental studies, the ACLU lawsuits, the international licensing, the lack of qualified technical people, would never happen. I can tell you from experience in the 1960s - "zero risk" will not get the job done.
That was very thought-provoking. Thank you for sharing. Speaking of risk, I like to take risks. I suppose that the term, "risk-taker" would often characterize me regarding some of things I've done. I especially like your comment regarding monkey bars and the like. My dad once commented (and I'm paraphrasing with a twist of my own input) that it's probably not all that great of an idea to force kids to wear helmets when they're out riding their bicycles, for they need to fall down once in a while when they're young and rambunctious and feel the pain of being wild, for if they don't do it now while they're young and testing their limitations, then later on they'll be the worst for it. Oh how I can hear the health professionals now giving testament to what they have witnessed, but anyhoots … .
I’m not opposed to risk, but I suppose that I’m overly hesitant to recommend excessive amounts of it given the current nature of (and oh how I hate to say it this way) the liberal thinking that has been sweeping the nation and taking root over the last (and what did you say, forty?) forty years.
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Sat Feb 18, 2012 5:52 pm |
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fast
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Wow, that's a lot of wisdom packed in there. There's also some subtleties that leave me wondering who it is we're talking about. There are a lot of players. We have the advice giver and Little Johnny, and we have people like Little Johnny that isn't him. But, we also have people that talk about advice givers, and sometimes, those people are the people being given advice. It can start to look like a hot mess on paper.
You talk about society being the fundamental driver behind the comments made about financial advice--that comment just might include me, as I by virtue of originating this thread am (in a way) talking about advice givers.
You talk about advice being tailored to expectations, and that would seem to be about advice givers. Although I think we should tailor our message to our intended audience, I don't think advice givers should merely tell people what they want to hear. We should, as you mention, say what they need to hear.
You also said, "It's simply human nature to have more acute hearing when the message is what you're expecting to hear. If the message is unexpected, what's the response? "What was that?"."
I was a little confused on that one. I understood the message; I just wasn't sure if you were talking about the receiver of advice or the people talking about the advice givers. The following passage makes me think you were talking about the advice receivers:
quote:
And here's where it ties into intellectual curiosity: when the individual's desire to know has been dulled, the response to an unexpected and not understood message is to disregard it. The individual with a strong desire to learn...to know...will desire to receive and understand the message. And it's only then that it might effect a change in the individual's behavior. Understanding precedes voluntary behavior change. Any other behavior change must be coerced; and coerced behavior change succeeds only so long as it's monitored and enforced.
My confusion should have dissipated, but I didn't know if there was an embroidered pun, lol. But yes, I can finally see where you're going when you were talking of intellectual curiosity and now talking about desire to know being dulled.
As to my comment about liberals, I retract that. I should know better. All in all, I got a lot out of your post, and if I don't forget it, I'll be bit better for it.
Before I bring this post to a close, you asked, "And why do we not care?" I don't know. Maybe some that appear not to care simply have no mechanism to show they do. But like I said, I don't know. I'd rather live in a world where we do care, and I suppose many of us would do our part if we knew what demonstrating that we care looked like.
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Sat Feb 18, 2012 11:16 pm |
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oldguy
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quote:
As to my comment about liberals, I retract that.
Did you see where the Govt Food Inspectors confiscated a little preschool girl's home-prepared lunch and replaced it with Chicken McNugets, the official Obama nutricious lunch of the day? lol - that is a great example of government over-reach, one that we can all see as communistic.
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Sat Feb 18, 2012 11:38 pm |
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fast
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The following is an excerpt from what I contemplated posting in another thread. I chose not to because I found that it would be inappropriate. But, I think it might fly in this thread. It’s a response to someone’s inquiry about a tax refund.
[INDENT]One way to increase your refund is to decrease the total number of allowances you claim on your W-4 form. Also, you could use that same form to have an additional amount withheld from each paycheck. The more you have them withhold, the more you’re likely to get back come tax time—bigger refund!
That’s what you said you wanted, and if what you said you want is in fact what you want, then you now have some additional facts that will help let you make up your own mind.
However, please don’t construe that as good advice; after all, I’m not the one who knows what’s best for you. But, the experts do. They are what you might refer to as an authority on the subject, and they can list the reasons/pros/advantages for why you
shouldn’t want what it is you think you want.[/INDENT]
There was more to the response, but the more I wrote, the less appropriate it became. It’s not that I was setting out to be sarcastic; it’s just that my tone has a way going downhill all on its own in an endeavor to get my message out.
Anyway, my retraction was made because I didn’t want to be offensive. I come across that way sometimes, but I don’t mean to.
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Sun Feb 19, 2012 12:31 am |
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IngeniousBastard
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Little Johnny lives in a society that has no interest in his best interest. Big Corporations need Little Johnny to work for them! If Little Johnny got all high falootin' and started to get ahead in life, who the heck would make all their widgets!? Alas, the powers-that-be will continue to keep Little Johnny in the dark, by teaching him to focus on shiny objects and deceiving him into thinking they are looking out for his best interests. After all, they provide a 401k with investment matching! Plus, if Little Johnny can manage to get some more overtime this month, he'll have enough to put down on a brand new candy-apple red 2012 Ford LIABILITY XLT! Little Johnny might actually manage to attract him a cute little filly with that there rig!
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Sun Feb 19, 2012 7:52 am |
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fast
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quote:
Originally posted by coaster
[...] that's an obviously facetious libel and slander. 
Facetious huh. Obviously.
IngeniousB.,
Although I'm a fan of Fords, I found your descripion, "[...] Ford LIABILITY XLT!" to be quite humerous. Is that an orginal? Too funny!
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Sun Feb 19, 2012 1:39 pm |
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IngeniousBastard
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quote:
Originally posted by fast
Is that an orginal? Too funny!
Original indeed, sir. While I have no issue with the Ford Motor Company or their products myself, I was merely pointing out the fact that too many people are in a hurry to throw money at liabilities like new cars and the like instead of assets like property or investments. To their defense, liabilities look so much cooler!
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Sun Feb 19, 2012 4:42 pm |
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2StepsFwd1StepBack
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quote:
Originally posted by fast
quote:
Originally posted by 2StepsFwd1StepBack
It's all about education and proving to someone that the impossible is possible.
I disagree, but let me be clear on exactly what it is I disagree with.
First, Coaster highlights an excellent distinction, and that distinction is the difference between stupidity and ignorance. Just as there's nothing a doctor can do for the patient whom has already passed, neither can we do a whole heap for those that are stupid; however, there is a cure for ignorance, and the cure for that is knowledge, and one way to acquire one brand of that is through education. Make note, by the way, that in the very last sentence of my opening post, I reiterated (and my point is that I reiterated) that I am a bit ignorant myself when I said, "not so knowledgeable." I never said that Little Johnny is ignorant.
But, didn't I say that Little Johnny isn't bright? Not exactly. What I said is that "Some people say that Little Johnny just ain’t all that bright." And, say it as they might, that doesn't make it so, not even if they say it three times (as once was famously remarked).
So, what do I disagree with then? It's not all (all, you said) about education. Interestingly enough, I even went so far as to point out that Little Johnny knows better. Education isn't his issue. Knowledge isn't his issue. Little Johnny isn't stupid (even though others may think he is). Recall the very first paragraph where I explicitly state what he knows he should and shouldn't be doing. The problem with Johnny is a behavioral problem in spite of his knowing better.
For clarification purposes, let it be understood that people living on the edge are not necessarily the Little Johnny’s of the world. Many of those people just might be better off should they decide to the follow the most often touted advice.
What captures my attention is how good advice seems to be offered as if it’s a one size fits all phenomena. It’s hard to put in words. Maybe this’ll help: What might ordinarily be good advice for a novice driver that finds herself skidding around a wet corner on a back road may not necessarily be the best maneuver that a seasoned veteran should take, but I don’t think the best advice (what we would tell the veteran) is what we should tell the novice, not because we should withhold the best advice from the novice but because the novice doesn’t have the skill-set to handle what happens when the best advice is acted upon. In the same vein, we shouldn’t tell the Little Johnny’s of the world to change their W4’s without at least explaining the dangers. We harp on the advantages of doing what we think is best, but along with doing what we think is best sometimes comes the need to change other things (like not spending more than we make with the newfound money); otherwise, there will be no cushion to protect us from our failed behavior changes come tax time.
Dave Ramsey says to temporarily stop your 401K contributions to speed up the process of getting out of debt more quickly, but even he thinks it’s a bad idea to stop it if it’s not going to be a temporary thing. So, whether you should stop your 401K in this case depends. Never mind what it depends on. What’s important to my point is that it depends.
In my conclusion, I find that what advice is the best advice is not necessary truths but rather contingent truths, that will depend on other factors—that render what’s touted as good advice purportedly good advice.
Of course, this is coming from me, a person who doesn’t really know a hill of beans about giving financial advice. Fun learning it though!
Oh, before I forget. Back to your sentence. Recall, you said, “It's all about education and proving to someone that the impossible is possible.” I’ve already discussed the “it’s all about education” part. As to “the impossible is possible,” and to the surprise of many, that may not necessarily be a contradiction since the words are ambiguous and thus might not have the same referent. But let’s not go there. Funny you should mention, “proving to.” For your amusement purposes only, there is a difference between “proving to” and “proving that.” Seldom does a logician find a need to prove to someone that an argument is sound, for example, as that’s a matter of psychology. “Proving that,” on the other hand is what his job is all about, as an argument is sound independent of what others might happen to believe.
So what you are saying is that Little Johnny is neither ignorant (which can be resolved through education) nor stupid (which may have no resolution); rather, he is knowingly avoiding doing what is right because, as Ingenious points out, LJ rather have a shiny set of wheels with a huge note so he can attract the girls. Then I would agree with your disagreement that “even the impossible is possible” because LJ doesn’t even care.
Then, again, remembering back to my clubbing days back in my mid 20s, my pick-up line of “I’m maxing out my 401k contributions so I can benefit from my employer's matching program” never had as much success with the women as did my shiny, new Mustang Shelby. 
Edit: Er... I meant "Shelby Mustang". I really did own one. Really! 
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Mon Feb 20, 2012 11:19 pm |
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fast
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quote:
Originally posted by 2StepsFwd1StepBack
So what you are saying is that Little Johnny is neither ignorant (which can be resolved through education) nor stupid (which may have no resolution); rather, he is knowingly avoiding doing what is right because, as Ingenious points out, LJ rather have a shiny set of wheels with a huge note so he can attract the girls. Then I would agree with your disagreement that “even the impossible is possible” because LJ doesn’t even care.
It’s not that he doesn’t care.
This is more about the advice giver than the advice receiver.
If the advice-giver cannot see that Little Johnny isn't going to do better and change his ways and not live beyond his means, then I won't give a look of disapproval when the advice-giver tells him to adjust his withholdings in such a way that will result in his receiving a very small and virtually insignificant refund.
However, if the advice-giver does know, or (and you'll love this) or if the advice-giver should know that people like Little Johnny (i.e. people who not only live on the edge but also show no signs of changing their ways despite their knowing better), then I think it would be well-advised not to rush to bat with what is often touted as not only good but the best advice; the refund can no longer act as a safety net for those that make unwise decisions if the refund is changed from enough to help them play catch-up to virtually nonexistent.
Whether Little Johnny deserves to fall into financial ruin if he doesn't change his ways is irrelevant. What is relevant is whether or not advice givers should knowingly espouse what is ordinarily good advice when they have very good reason to suspect that the advice-receiver cannot handle the additional requirements that must accompany the supposed good advice. See, if the advice is both given and followed, then financial ruin is more likely if the person follows the advice yet fails to change his ways.
You don’t tell a person to drain a pool if you know they’re gonna keep diving in it. They would have been better off had you never said a word. You explain to them that they must not dive in if you take the water out. Tell them to take out a little water and not to dive and see if they do. We can be so quick to set people straight without taking to time to see that we’re not dealing with computers; we’re dealing with living, breathing people, and not all of them can alter their habits in the time it takes us to wink. We should warn them of the dangers and pitfalls of taking what is ordinarily good advice.
Okay, that was a bit melodramatic, but my real intention is to just hone in on what has captured my attention—and that is the times when good advice is not always such good advice when such purportedly good advice is followed in isolation to other changes that should be made but aren’t. Something like that.
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Tue Feb 21, 2012 1:54 am |
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fast
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quote:
Originally posted by coaster
There's no point giving advice when you know the advice isn't going to be followed [...].
Yes, but now we're not talking about Little Johnny. See, Little Johnny not only received the advice; he followed it as well. What was he told? He was told to adjust his withholdings. What did he do? He adjusted his withholdings. He followed the advice. Now looks where he's at. He's filing bankruptcy. And why is that? Because his bills got so far behind he couldn't catch them up like he always could. Why not? Because he had no large refund to pull him out of his jam like it had always done before. Why didn't he? Because he followed the advice given to him which resulted in him not having a large refund.
The assumption the advice giver made was that he wouldn't fall behind on his bills if he had the money to pay his bills throughout the year. The assumption was faulty. He did fall behind, and what peaks my curiosity is why on Earth couldn't the advice giver not see that coming? In fact, isn't it more the exception than the rule that people will stop misbehaving with money after they choose to adjust their withholdings? After all, one hasn't much to do with the other, so I don't see why a person who would follow such 'smart' advice will all of a sudden (and therefore) change his or her financial misbehavior—which seems to me to be more crucial since following the advice directly leads to the loss of the safety net.
The best advice isn’t the advice that puts someone closer to financial ruin, so advising someone to adjust their withholdings without good reason to think they have the wherewithal to adjust their others issues accordingly makes for a less better off scenario.
Or at least that’s the ingredients for an argument that could be put up for examination.
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Tue Feb 21, 2012 2:52 am |
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fast
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quote:
Originally posted by coaster
ehhhhh.....I think that's extending the OP by introducing new assumptions that weren't assumed in the OP, don't you think?
Got an example? Well, besides the bankruptcy part, that is; that was mainly added for emphasis to drive home the point.
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Fine for extending the discussion into a new turn, yes, but I think given the assumptions made in the OP, it couldn't be forseen that Johnny was going to blow the extra money he got in his paycheck, knowing full well that he was NOT going to get the big fat refund he'd gotten in previous years.
Couldn't be forseen?! Most of the opening post was geared towards seeing that it could be foreseen.
In the first paragraph, I talk about what he knows (both what he should and shouldn’t be doing), yet I express that (still), he isn’t changing his ways and merely makes it paycheck to paycheck. In the second paragraph, I give signs that he won’t change by talking about the budget he never does. I paint a dismal picture for his current behavior and thoughts. Does it sound like he has the makings for changing his ways? In the fourth paragraph, I down right explicitly state that he would in most likelihood spend more money.
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And I'd like to think that any professional advice given Johnny to reduce his withholding would make it clear that he wasn't getting any more money, he was just getting it along the way instead of having to wait for it.
You make not only an excellent distinction but an excellent point! The distinction shouldn’t go unaddressed either. We would (and should) hold the paid-for advice giver to a higher standard. It’s generally accepted (I would imagine) that we will hold the amateur harmless in most circumstances. And yes, we would expect the professional to have some level of fiduciary duties and be more comprehensive in his financial advice.
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The circumstances leading up to Johnny's bankruptcy can't be blamed on the advisor and the advice given, because, frankly, the consequences suffered assume a level of irresponsibility or stupidity on Johnny's part that's astounding, and […].”
Astounding? You’re such an optimistic!
As to blaming, well, I can blame you for the fact it’s raining, but of course, I get what you’re saying. We shouldn’t blame the amateur advice-giver; besides, like you said, there is a significant level of irresponsibility not on the part of the advice-giver but rather the advice-receiver in this case.
My mistake, I think, has been to put a shade more responsibility on the advice giver than is common.
Back to the astounding part: Astounding? Really? That’s another problem with smart people. They just don’t grasp the severe level of, uh, well, um, let me put it to you this way: I had a teacher that once used the phrase, “misplaced admiration” to describe the admiration I had for another. To be so optimistic as to think people won’t act so stupidly and self-destructive is, well, uh, misplaced.
Great post. Thank you.
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Tue Feb 21, 2012 11:55 am |
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