Theme of the Year #3: We Are All Nuts

By far, the most read item this year on Bad Money Advice was Swoopo: Entertaining Yes, Shopping No. It’s the closest I’ve ever gotten to a post really going viral, accounting for about 4% of all page views on this site. No Thinking Chimp doubt it was the first thing many of you ever read here.

So I don’t need to recap what it says. But I will remind you all that I called Swoopo a sort of "commercial performance art in which it is demonstrated just how dumb we really are." But dumb isn’t quite the right word. Irrational is better.

And that is today’s year-in-review theme, that we are all nuts. Not that there is anything wrong with that. It’s just that we aren’t nearly as logical as we think we are.

Back in March I posted on a wonderful new concept discovered by two professors: saver’s remorse. The gist of it is that it is possible to regret saving instead of spending, just as you could regret the reverse. In a better world that would have been an absurdly mundane finding, but in our world it is pretty radical.

Much of the personal finance mainstream is predicated on the principle that we humans by our nature save too little. The discovery that we are apparently just as capable of being irrational in the other direction significantly upsets that apple cart.

In June I got a little more philosophical with a guest post on Consumerism Commentary, Thinking is Not Enough. The point was that the problem is not merely that we don’t stop and think about what we are doing with our money but that thinking clearly and accurately about it is not as easy as we assume.

Later that month the subject of how less than perfectly rational we can be was more directly discussed in On Money and Psychology. That’s still one of my favorite posts, and not just because I found a picture of a banknote with Freud’s picture on it. Mainstream personal finance advice may assume irrationality on the part of consumers, but it does so in a way that’s not helping any.

On the slim chance that some of my readers still thought they were perfectly logical, in July I came out with Percentages are the Way You Think, in which I explained how you think that some dollars are worth more than others. (They’re not, BTW.)

I got more practical in August, with a post providing helpful hints about how to cash in on years of saving as advised by mainstream advice.

In a post with a lot of traffic due to one of my more compelling titles, A Piece of Paper Worth a Billion Dollars gave even more practical advice. If you are going to forge something, think really really big. This is because, well, people are nuts.  An almost certainly fake $100 bill isn’t worth as much as an even more certainly fake $10,000 one. Go figure.

I returned to the big picture in November with The Nagging Nanny State. Turns out, all we need to do to solve our national crisis of not saving enough (see above) is harness new technology in the form of text messages. Just send everybody a periodic reminder to save. Problem solved.

Sadly, there was a flaw in that plan. In order to get those text messages you will need a cell phone. And as an American, you can’t get one of those in a rational  way, as I explained in Crazy Cell Phone Contracts for Crazy Americans.

It’s been a crazy year. Merry Christmas everybody!

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