A couple of months ago, I somehow stumbled upon reddit.com/r/personalfinance, possibly the most deluded and the most obsessed subreddit since /r/keto. I would call it a cult, but I feel the personal finance subreddit is far more dangerous than a cult.
The biggest problem of personalfinance is that none of it makes sense: from the ridiculous, atavistic, debunked myths of “the stock market is sooooo dangerous!” to “you should save 99% of your money in a no interest bank account and NEVER EVER TOUCH IT EVER AGAIN,” personalfinance spouts the typical bullshit you can find in your average 1995 magazine written for the suburban 50-year-old-man. I hesitate to call it a troll subreddit, because some of its members seem genuinely obsessed with outdated, borderline dangerous financial information.
Take this piece of advice from one of the top posts of all time:
There are many types of mortgages. You usually want a fixed-rate mortgage to lock in current attractive rates in case you stay in your house for many years.
I’ve very rarely read something so stupid in my life. In fact, it would be hard for me to concoct something so blatantly false even if I tried to.
The fixed-rate mortages here start a 4.5%. That’s a 5-year-fixed term, meaning it is reset after 5 years to whatever the current rate will be. The variable rate is 2.25%. Half of the fixed rate. With interests not going up significantly anytime soon (okay, maybe 1.5-2%), we are going to stay below the 4.5% threshold for a very long time.
As I said, I’m unsure if that whole subreddit exists to mislead people or if those people are serious. I tried to make a few posts to debunk some of the commonly known scams, but of course the braindead worms always downvote it to promote their “do not pick individual stocks! it’s far too dangerous” or “never ever get a credit card! the interest is too high!”
All in all, it’s always the same thing, day after day, week after week and month after month. Always the same garbage being spitted out by the same idiots, like good brainwashing session, and always the same fear-mongering about debt and losing money. So, in the interest of all readers, let me sum up the entire subreddit in a few points:
- Cars were made by Hitler. Did you know that Hitler started Volkswagen? Also, Ford and GM are controlled by the Zionists. If you buy a car, you’ll go bankrupt. Cars cost millions of dollars to maintain. Do not buy a car. You’ll spend $5,000 a month on gas, insurance, gas, maintenance, maintenance, repairs, fees, license, permits, gas, parking and maintaining your car. Solution: buy a bicycle instead, because that’s totally the same thing.
- Did you know that if you get a mortgage, you’ll have to pay your property – TWICE! That’s how high the interest rate is, despite the fact the fed rate has been at 0.5% for years when it used to be at 10%+. Solution: if you must buy a house, pay it in cash. But first, put 90% of your salary in a secret bank account that not even your spouse knows about so you can surprise her at 65 with retirement money.
- Speaking of houses, did you know the average house owner spends over $5,000 a month on repairs? Do you know how much a house costs to repair? Do you? You’ll go bankrupt. Do not buy a house. Sure, it will gain value and you can make a profit, but something something bubble something look at the financial crisis. Solution: remain homeless. Or if you must live somewhere, squat a 24 hour gym. They even have showers!
- Credit card: did you know you have to repay those eventually? Credit cards were designed by the devil: they charge you 20% per year. Sure, you could repay by the due date and never pay a penny in interest, but we both know you’re far too stupid to do that. If you get a credit card, you’ll instantly max it and trap yourself in a lifelong hell. Fact: everyone who got a credit card eventually ended up $250,000 in debt Solution: never buy anything. Stay home and eat the CO2 molecules in the air to sustain yourself, like a plant.
- We are the biggest financial subreddit on reddit. This makes us special and allows us to push our agenda and you’ll believe it because we’re Reddit and not a private subreddit. After all, we are just like you, right? At the same time, we’ll promote the typical new genre garbage books in our “AMAs” on the sidebar. Buy those books!
And no, we definitely do not get paid off under the table to promote obvious garbage commercial crap. Here’s a typical IAMA post:
Think that’s enough commercial garbage? Solution: trust everything we say blindly. Upvotes are a good way to judge the validity of a reply and if you see something that doesn’t validate 100% of our preconceived, fanatical notions, report it so we can remove it ASAP. Hopefully, it won’t stay up long enough to have the time to corrupt anyone else.
- Do not EVER buy stocks! Stick with a 2% bond! Stocks are far too risky to own! Did you know stocks go up and down? Bonds go up all the time. What do you prefer? TRIGGER WARNING: Some stocks have even gone to 0. That’s right, $0. It means you will have saved all that money for nothing. Solution: put 100% of your money in a AAA-bonds, but not the US government, because the US government is bankrupt because reasons. Also, never withdraw it. If you need more money, it’s because you don’t work hard enough.
- To get more money, ask for a raise at work. What do you have to lose, except for your dignity when you realize that you’re basically begging a stranger who doesn’t give a shit about you and wants to spend as little money as possible to keep you doing the crap that you’ve been doing for years? Solution: do not compare your salary to anyone else, you’re underpaid. Then put the money in a 2% bank account.
- Speaking of raises, the best way to get a raise is the passive aggressive is to give a 2-weeks notice. Solution: if you quit, they’ll fight to keep you. And if they do let you quit, then use your emergency funds.
- Speaking of which, your top priority in life should to be have 6 months living expense in an emergency funds that will earn no interest just in case you end up unemployed, because you must account for all possibilities, right? What if you lost your job tomorrow, do you really think you could find another one? In this economy? Don’t fantasize. Solution: put 80% of your salary in a secret fund that you might never end up using just for so you can get the illusion that you’re safe.
- You must pay all your taxes! Rich people never use any tax exemption or rules to shield themselves from a tax liability. Rich people never base their company in Delaware to save sales taxes or income taxes. Rich people have never used complex tax strategies in the Bahamas or in Ireland to reduce their tax liability to 0. Whenever you check and see half your money wasted, you should feel patriotic, because you are doing your duty to your masters. Solution: volunteer to pay extra tax so the government never feels it lacks money when it wants to start new stupid projects like a wall between the US and Mexico or a new battlecruiser that will never be used for anything more than patrolling random seas 5,000 miles from here.
- Medical insurance: always buy the best insurance. Did you know some surgeries can cost $500,000? Also, if you get cancer, you’ll need to pay all those expensive treatments and we all know insurance companies always pay, on time. Solution: ask for the most expensive plan, it must be the best since it’s the most expensive and you’ll be well protected.
- Speaking of which, negotiate all contracts you sign, except medical insurance. Those guys are professionals. How much is your health worth? Solution: let the pros handle it.
- Vacations: have you thought about not going on vacations this year to save money? Put the cash in your mortgage, by age 60, you’ll be glad you did. Think of all the money you’ll save. Solution: go to a pastry shop from another country and buy a cake there, you’ll be traveling through food! Don’t spend too much, however! In fact, just look at the cake, it will be experience enough. But don’t drive to the pastry shop, bike there.
- Got a big inheritance? I think we already know where it’s going. Don’t have any debt to repay? Well, what the fuck are you doing on this subreddit then? Solution: borrow some money so you can feel you can belong to our community. Would you join Weight Watchers is you weren’t fat? Thought so.
- Do not ever go bankrupt! Going bankrupt means that you are going, well, bankrupt! Your credit score will never recover – at least for seven years. And going bankrupt is so shameful! No, truly, it is much better to be trapped in a lifetime of debt. Solution: work more and spend less so you can devote 100% of your life to repaying your debt.
- Have you bought something today? A coffee, a sandwich, a new piece of clothing? You should feel bad about it. This is money you could have used to repay debt. Solution: save save save! You can enjoy life when you’re dead!
I mean, just look at this dumb, dumb reply to a post “Do I need to save for retirement?” (I think you already know what the morons at /r/personalfinance will say):
Yeah, well, fuck you too man.
I mean, how do these people even sleep at night? “Tomorrow the next great Depression might start OMG better put money in a fund that will also lose 90% of its value if the Great Depression begins!”
How about this one, called “Just killed one of my 2 [student loans]. 6500 down, 30,000 to go. What to do with freed budget?” (you already know the answer):
Wow, I totally did not expect that answer. Don’t you love it when you can just read the title and guess what the first 1,000 replies will be?
Aside from that, these people rehash the same crap, day after day, like a good /r/politics front page during election time. It’s barely supportable. I’m going to stop here while I can still somewhat support it. /r/personalfinance is about as useful and interesting as /r/breakingbad after the show ended, but before I do, let me reveal some real personal advice tips
Real Personal Finance Tips:
- Always invest 100% of your savings in the stock market. Always. Every other form of investment is inferior and no, stocks are no more risky than bonds or other investments (it all depends on your definition of risk, because yes, there are many definitions).
- Never have anyone manage your money for you, ever. No mutual funds or managed investments.
- Diversification is for pussies. Yes, you want to buy more than one company, but don’t go around buying bonds or investing in other countries. It’s totally pointless.
- Saving for retirement is pointless. You already have a pension plan at work and even if you don’t, your stocks will keep spitting out dividends long after you’re retired. Take companies like AAPL: they pay $0.57 now, but in 40 years, they’ll pay more than $2.50, and Apple is not even a good dividend payer.
- Paying taxes is for idiots and losers. Warren Buffet pays 18% in taxes and he’s one of the highest tax payers in his income group. If you know what you’re doing, it’s not hard to significantly reduce your tax burden. For instance, did you know you can start a company and deduce pretty much everything? Or that you can structure a mortgage so that the interest on your property is tax deductible? Those are just two blatant example, there’s plenty more.
- Generally speaking, you want to be a contractor, not an employee. Being an employee is the single biggest scam in the history of the United States. Most contractors I know operate in some tax haven – such as Delaware – and plain and simply do not pay any taxes at all. If you must be an employee, then there’s no point working hard because you are getting robbed blind by the rich. When I hear “employee,” I hear “slave,” unless you don’t do anything at work and can use that time to read/write/browse Reddit.
- Even better than being a contractor is being a business owner. When you own a business, it’s extremely rare to pay more than 10% in taxes, if anything.
- Medical insurance – if you get seriously sick, you’re going bankrupt, insurance or not. In the US, surgery can add up in millions faster than that your head can spin. Even with 90% copayment, you’re dead. So skip on the insurance and place the premium you’d normally pay in your stocks. Again, if you get seriously sick, you’re going bankrupt either way.
- Money is best enjoyed when you’re young. Have you ever seen old people on vacations? Is this really what you want to look like? I thought so. Enjoy life young. Getting older sucks.
- No, a child does not cost $250,000 to raise to the age of 18. This is a gross myth and a figure that is grossly distorted and exagerated. The people doing the study used accumulated value, which is at best misleading because $250,000 in 18 years is worth around $100,000 today at 5% per year. And this is for the first kid, assuming you buy everything new and get 0 support. This is just basic fear-mongering.
- It’s not hard to earn 10%+ per year from the stock market. I’ve done it every year of my life except in 2008, where I lost 25%, and I don’t work that hard on it. In my best year, I made 45%.
- Buying a new car is indeed really dumb, but so are most of the things you could spend your money on anyway (cigarettes, alcohol, gaming, etc.). So buy whatever the fuck you want, it doesn’t really matter anyway. Your money will not follow you to your grave.
- Don’t hesitate to go bankrupt if you must. Millionaires do it all the time and they do just fine.
- Your credit score is a leash: it keeps you in check. When you play by their rules, you are their bitch. Stop caring about it, it’s completely irrelevant. “Oh no, I have bad credit!” So what? Stop borrowing money!
- Got a big inheritance? Spend it the way you want, it’s your life, not anyone else’s life. Want to save it? Stocks. Want to spend it? Go right ahead. You’ll end up dead one day anyway.
- Have you ever visited a website composed of people wanting to lose weight? If not, go do it right now: you’ll immediately notice how frustrated some of those people are. Reddit’s /r/personalfinance is the same: it’s filled with people who made bad life choices (like over-eating) and who are unleashing their rage onto newcomers because it makes them feel their failures had a purpose. They are so brainwashed by their miserable life that they’ll lash out at anyone who disagrees with them. Any contrarian indicator will remain them of how stupid they are and this process is so painful that they’d do anything to block it. Call it willful denial.
That’s it, a surefire plan to succeed in life. Enjoy.