You may think the biggest problem with your money is that you don’t have enough of it . . . obviously, that’s what most people think . . . if they're thinking about their money at all. Even the disgustingly rich people think about their money (in between sunning on their yachts and buying pounds of diamonds at Tiffany’s), because money isn’t about money, it’s about control.
Who has control of your money? You? Your spouse? Your parents? Your trusted advisor? A lot of people use a human filtering system, because they don’t want absolute control of their own money. They’re afraid they’re going to mess something up, so it’s better to delegate to someone who couldn’t possibly mess things up as much as they would. Or so they think . . .
Sadly, I have seen a lot of loved ones and trusted advisors muck it up. Blame is a two-way street, because yes, the people in control are at fault for either not disclosing something, or for confirming that you understood the risks—or even for assuming they have enough understanding to be in charge. The muckees are also at fault, and let me attempt to explain why via an analogy.
Have you ever had your car serviced, and the mechanic said, “blah-blah-blah, blah-blah-blah and that will cost $1,500.” And because you don’t understand how cars are put together and you don’t WANT to understand how cars are put together, you said, “If it’ll keep the car running, just do it.” So, $1,500 later, you drive away happy (and poorer) for another 3,000 miles.
The problem with this situation is that you can’t possibly know if you needed to spend $1,500 if you didn’t understand exactly what the mechanic was telling you to do. It’s possible that you could have deferred the cost until the next visit, or you could have taken a cheaper alternative. Or maybe your mechanic is the Michelangelo of car maintenance; he was proposing something akin to the Sistine Chapel - beautiful, but entirely unnecessary to get from point A to point B. You relied on the mechanic to tell you what you ABSOLUTELY had to do to keep the car running, whereas his job is to sell parts and service. It’s not his (or her) fault that you don’t understand car talk, and most of the time, you’re okay with it too, because in the grand scheme of things, not knowing about cars won’t have permanent repercussions.
Not understanding the decisions around your money WILL have permanent repercussions. You’ll accumulate debt. You’ll retire on less than you thought. You’ll take care of your parents when they start to ail. You’ll divorce over financial issues. You won’t quite be able to fund college for your kids. And, you’ll unknowingly transmit your lack of knowledge and strategic decision-making over to the next generation.
This isn’t to say that financial issues aren’t confusing, because they are. But no one is doing themselves any favors by not assuming at least a smidgen of control and understanding around their money. And since control and understanding don’t typically happen overnight, there’s no time like the present to start.
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