Why your opinion about the stimulus plan doesn’t matter

Ramit Sethi · February 17th, 2009

I don’t write much about current events here, because they usually don’t affect your personal finances, but I wanted to point out something interesting I just read.


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Have you ever noticed how everyone seems to have “the answer” to the healthcare crisis or the economic meltdown? The problem is, they usually don’t see above their own situations to the larger problems. That’s why any one of our opinions is largely irrelevant.

Check it out:

This New York Times article points out how G.M. is asking for $12.1 billion more in loans. The comments are the best part:

  • “Amy” starts arguing about healthcare and her grandfather

  • “Dave” writes about the auto companies being political sacred cows
  • “RG” complains about Wall Street fat cats
  • “Dale” bemoans the lack of a national healthcare system
  • “JK” argues that unions are a net benefit to America
  • “Outraged” argues that “unions are destroying America”

And that’s just in the first 10 comments.

You see the problem?

Everyone’s got an opinion, usually drawn from their own narrow experiences, not seeing the full picture.

This is why product managers know how difficult it is to ask their users what features they want in a product.

It’s why politicians can’t just tactically respond to what people want, but have to show leadership in what they need.

And it’s also why everyone’s got an opinion about what you “should” do with your money, but few people actually implement the strategies.

You can listen to people’s opinions all day long. You can read thousands of blog comments on personal-finance blogs each week. But trust me, those critics — whether it’s your uncle or mom or sister or friend — are still going to be saying the same things tomorrow, next year, and 5 years from now.

What matters is what steps you take toward getting rich right now.

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  1. Ramit says: “And it’s also why everyone’s got an opinion about what you “should” do with your money, but few people actually implement the strategies. ”

    Is this true? I figured that the people vocal about what we should do with money generally follow their own opinions, whether their opinions were financially healthy or not.

  2. i agree with you that politicians need to “show leadership in what [people] need”. the question is, do they have the guts to do it. i am curious what you are doing to protect your capital against the destruction of the dollar that our current “leadership” is bent on carrying out through inflation of the currency. have you hedged yourself against this?

  3. Dr.Stuart Schaller, PhD

    This bailout is a joke. There are 11 million “officially” unemployed, and there are another 5 million or more (counting illegals) that were part of the underground economy that are no longer employed. We are already 10 trillion in debt. We actually need another 3 trillion to cover the bailout, with interest costs, etc. The only thing, IMO, that is going to save the US now is a major revolution against the government. If the government gave the bailout money directly to every man, woman and child (including illegals), we would have gotten around $75,000 each!!!

    • Ramit Sethi

      Dr. Schaller, your comment is great example of what I’m talking about. You might be right, you might be wrong, but does your comment really change what you should be doing with your personal finances?

  4. You nailed this one.

    Perhaps this should be copied to your “Things I Hate” blog.

  5. Nate @ Money Young

    Dude, Dr. Stuart, thanks for your two cents, but as his article says, you opinion doesn’t matter.

    As he said “What matters is what steps you take toward getting rich right now.”

    I would like to alter that to be “What matters is what steps you take toward getting HAPPY right now.”

    Dr. Stuart, a question: Obviously the bailout doesn’t make you happy, what do you think you can do about it to change it???

    If I asked myself that question I would say very little. Which why this bailout fills my brain about as much as Muhammad Muhammad… God bless his soul(I don’t know a Muhammad Muhammad, but he probably exists) I can’t influence Mr. Muhammad’s life any more than I can influence the bail out.

    Honestly neither can you, unless you are as eloquent as President Obama (seriously that guy is fun to listen to)

    Dr. Stuart, I would recommend worrying less about the ‘revolution’ and more about taking care of yourself.


  6. Dr. Stuart Schaller, PhD

    I understand that my complaint about nthe bailout ultimately means nothing.

    Personally, my wife and I are doing OK, and trying to increase our income and savings. We are OK, but like everyone else, we could be better off than we are.

    Increasing income and savings is a bit more difficult to do at 62 than at 22.

    I get a BIG pension when I’m 65, but I CAN’T get it until I’m 65..

  7. Check it out

    My opinion is that chick is hot!

  8. AMEN Ramit!

  9. What steps am I taking right now? The same ones I’ve been taking since 2000:

    —Working at a job I enjoy (but don’t love) because the salary, benefits, and perceived security are a good fit for me and my family
    —Sticking to my short-term and long-term savings goals, which are the same goals I had nearly a decade ago
    —Still waiting for my short-term savings to allow me to put 20% down on my first home, but salivating at the current real estate market because it is opening more doors at my current savings level than were available even a year ago
    —Watching Wall Street plummet, which is giving me a greater bang for my “buy-and-hold” buck in my long-term savings strategy
    —Constantly looking for new learning opportunities, so I can become more efficient with my time, energy, and money

    I guess I’m one of the few optimists in this current reality.

  10. Writer's Coin

    This is why you’re the best Ramit. It’s one of the “problems” people have with democracies—if politicians simply did what we wanted them to do they’d go into a million different directions and never get anything done.

  11. I have no faith in the government. The president is an empty suit who has no idea what he is doing.

    So what am I doing about it? I’m worrying about myself and trying to ignore the news. The media spins it the way they want to and we never get the truth until 100 years later.

  12. StackingPennies

    Thank you. I’m so annoyed with people saying how they are against the bailout. So what??? Even if they do see the big picture, what are they going to do about it besides whine?

    This is why I love this blog. You say it like it is. Write your politician and get involved if you really think you have a solution, but don’t whine to me about it.

    PS – as i was about to hit submit, my MSN notified me that my friend “I don’t want to be a socialist!!!” just signed on. So annoying.

  13. Are you a product manager, Ramit? Because you nailed that line… “This is why product managers know how difficult it is to ask their users what features they want in a product.” Amen, brother.

  14. Kennedy Nguyen

    You made the point Ramit. I rather spend my time to study hard and find a way to get into Standford than read those junk news. xD

  15. “What matters is what steps you take toward getting rich right now. ”

    You really should add…. “and learning from yours and others mistakes of the past”.

    There has never been a better time to learn about ‘money’ in all it’s forms, but too many people are focusing on the here and now, and I fear that they will drop their interest in even their own finances as soon as the economy picks up and go back to their old ways.

    Now is the time to make changes that will last a life time. Yes a buy one, get one free coupon at your local restaurant is a great deal, but it won’t alter your personal wealth in the long term.

  16. Snowballer

    I have to agree. I am a free market, the government doesn’t know what it’s doing, the bailout is stupid type, but I’m still taking steps to better financial fitness.

    So many things in life you just can’t control you just have to deal with. Yes the bailout is going to make things worse, but good personal finance is still good personal finance. I can only cope with it as best as possible, it’s stupid to waste so much energy worrying about it. It’s a done deal.

    The same thinking applies to all the current financial market woes. So many people I know keep refusing to get financially fit because they disagree with the politics of it all.

    I do too, rather passionately, but I still have to live. I will worry about what I can change (my own habits) and cope with what I cannot (an out of control government run by idiots).

  17. Ramit, you hit the nail on the head. As the ol’ saying goes (and I’ll cut it down)… “opinions: everyone has one and they usually stink.”

    In fact, try going one lunch hour with a group of friends, and just sit back and listen. Try not to speak. Almost everything said is just opinion and noise to fill the silence. People can’t handle silence.

    Ramit, this post has been a light bulb moment for me. Thanks!

  18. Can’t agree with you more. My one friend constantly updates his FB page with venomous reactions to politics, yet he finds himself buried in debt and not trying to increase his savings / earnings. Quit talking and start doing.

  19. Marco Almeida

    Nice T-shirt!
    But that’s just my opinion :p

  20. Great post. You cut straight through the crap and got to the point. You can complain all you want. Until you do something, your opinions are just air.

  21. AMEN!

  22. Maybe people shouldn’t comment on articles

  23. Reminds me of this article

  24. Ramit, I agree with your post, but one thing I think you should do is take an even bigger step back and look at all the spending we are still doing. We are spending a ton of money on defense, foriegn aid, and for two wars and we’ve been doing it for a while. Most of it has been fairly hidden from the press, but it’s a noteworthy issue because it’s collectively all of our money. (Take a look at the F-22 Raptor issue that’s been popping up lately.)

    All of this talk from people about how to fix the economy is actually reflective of the American consumer. They’ve been spending recklessly for a decade now, and they are offering all of these band-aid solutions without holistically looking back and thinking about what actions/decisions/habits have gotten them to this point.

    Personal finance is not just about monitoring your balances, its about recognizing and knowing your limits.

  25. Hehe, thanks for this reality check. Yes, I have noticed that a lot of comments out there are on what’s wrong, and sometimes, even why things should work a certain way.

    And though I don’t say it out loud, you’re right, it doesn’t matter.

    I suppose sometimes people are just venting, which I don’t mind. Other times, I think some people may be bearing their ignorance. But that too I don’t mind. 😀

    In the end, I’m can only do what I can on my end.

  26. topseekrit

    I think people’s opinions matter when they collectively decide to do something about a particular situation. The key is that they took action to make a difference (i.e. organizations, employees, communities, etc.)

    Yeah random thoughts that have nothing to do with the given topic is a waste of time, but this is America where freedom of speech lies.

  27. How awful to have opinions of your government in a democracy! These people should be ashamed of themselves!

    But seriously, just because some folks commented on an online article while they were bored at work, this means that they don’t take care of their own finances and should shut up? I’m sure they’re fine, and the beauty of the situation was that if you were really sick of opinions you didn’t have to read them, just like this is the last straw in me reading your blog anymore. From the same old frugality tips disguised as something new and different to you blathering on about what I don’t feel is important, I’m done. Maybe if I find you’ve taken a good look at your blog and started writing for the sake of sharing information as opposed to marketing yourself I’ll be back, but I doubt that will happen. Someone needed a post, not quality.

    • Ramit Sethi

      Jessica, I’m not saying they shouldn’t express their opinions. I’m saying they don’t matter to your day-to-day personal finances, and in fact can be counter-productive.

      Btw, if you have some fresh new tips that you’d like to submit as a guest post “for the sake of sharing information,” I’d be open to checking them out and possibly posting them. Just send them my way if you’re interested.

  28. i think it’s funny that everyone nitpicks at whether or not this bailout will work before it was even signed. nothing was built in a day, and this bailout won’t fix anything in a day either…so i think people should chill out and give it some time. just because you don’t like it now and it’s apparently not hitting you now, doesn’t mean it may not work in a couple years when everything is finally getting in motion. i’m giving it some time to see how things pan out. if it gets worse, then it wasn’t a good idea…and if it gets better, then it was a good idea and any hater will have their foot in their mouth.

    as for me, i’m taking plenty of care of my own savings and not totally worrying about this until something that completely hits me personally, like there is a bill saying that i have to get up at 4am and do a fancy jig on my doorstep every third wednesday, is about to be passed.

  29. Dr.Stuart Schaller, PhD

    Dear Ramit (and all):

    The purpose of my first post was to try and get people to stop think the bailout will actually help anyone and to think about what is in their own best interest; nothing more.

  30. Actions speak louder than words. Or spoken more poetically – “What you do speaks so loudly that I cannot hear what you say” – Emerson.

    Discussion for the sake of discussion is healthy because you get a chance to develop certain skills that can benefit you when you might need them. Complaining and bitching about everything without considering any sort of counterargument is not useful.

  31. Don’t pretend like you have the answer | Josh Mock

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  32. Hi – here’s what I am actually doing: #1. Buying stuff: Lack of consumer confidence and massive unemployment are making the employed richer and we don’t have to do anything. Our purchasing power is increasing as prices deflate. #2 betting against the stock market. Did you know that if you had shorted the S&P500 (ticker symbol SH) you’d be up 22% for the past 12 months? Market prices are psychological. Go read the news (or even the comments above) and you’ll see that things aren’t going to change for the better in 2009.

    Disclaimer: I’m not an investment professional and you should not consider anything I’ve said to be advice. It’s not.

  33. Hi Ramit .. I just came across your blog. I think it makes a lot of common sense. That’s why people probably don’t do it that much.
    Personally I have been following some of the ideas. Some of the things that I liked WWAID, C.E.O strategy. Actually WWAID made me chuckle :).
    Good luck with your book.

  34. Bible Money Matters

    I agree that we need to put the rubber to the road, and start taking action in our own personal finances. It’s important to make good decisions, pay off debt, save and invest for the future. At the same time I think it’s important to stay engaged in the political process – and to let your elected representatives know when you’re not happy with them.

    The key in my eyes is moderation. Don’t go overboard complaining for no reason – and when you complain – complain to those who matter. When it comes to money, don’t worry so much about what you can’t do – but about the things you CAN affect. Setup a budget and start going on changing your own financial life!

  35. Erik Snyder

    There are many instances when the government does affect my personal finances. Because of the mortgage crisis, many American can not refinance their homes, because home values have dropped so low. This potential monthly savings affects everyone’s budget. Also, There are very few places to make money with your money right now. Money market and CD rates are close to zero, factoring in inflation and you’re losing money. I think the biggest need right now is creating jobs and cutting taxes, which will not happen because of this spending excess bill just signed.

  36. I don’t want to hear about it « Stacking Pennies

    […] I don’t want to see your Facebook status about the stimulus, nor an MSN name stating that the country is going to hell in a hand basket, with too many exclamation points.  (At least levity to the sentiment and say “where are we going, and why am I in this hand basket!?”)   Unless you are going to be some kind of political activist and actually do something, or unless I am voting in the near future in a way that can affect this, I just don’t want to hear your opinions on whether or not you think this is a good idea.  Last week, Ramit took the words right out my head and composed them into an articulate and pointed blog post in a way I never could:  Why your opinion on the stimulus plan doesn’t matter. […]

  37. Ramit,
    It is true that the bill has been signed. But as a person who both emailed and mailed my opinions to my congressmen, I must say that I am saddened.
    The desire for the current President who chose the slogan “Change We Need”, and then proceeded to do exactly as his predecessor did. He also signed into law the bill proposed by his predecessor. And appears to be moving troops from Iran to Afghanistan.
    I’m still waiting for the “Change We Need” from the head honcho.

    As to how it affects my finances. The stimulus plan is ineffective/inefficient as far as building 4M new jobs.
    I don’t wait for a gov’t handout.
    I pay all our bills on time (if not ahead of time). Put a measily 5% of my pay away, however since my wife is going back to work after staying at home for 9 years raising our children, she’ll be putting away most of her paycheck towards retirement. Which of course increases our retirement portfolio.
    All the while we will be paying down our 15 year mortgage at a 4.625% rate, and be quite thankful if I am still employed throughout the next 14 years to accomplish that task.
    We will continue to provide food/education/shelter for our 4 young children, while we examine more sustainable methods to provide for income outside of our jobs.

    Unlike Dr. Stuart, I don’t believe that we would have received anywhere near $75,000 in cash from the gov’t, but likewise, it wouldn’t have been a mere $800 that the gov’t is being “kind” enough to give back to us after borrowing from our children’s futures, this time around.
    As for spending any percieved increase we get back in taxes, that will not happen. Paying down our debt is highest on our goals at this point in time, so that we may be able to help our children out when the cr*p hits the fan and the national debt reaches over $15T by the end of the term for the current commander-in-chief.

    • Ramit Sethi

      Chris, I’m a big fan of how you’re paying debt down — that is excellent. My point of this post is: How much time have you spent on the asset allocation of your retirement portfolio? Or calculating if you’d be better off investing more or paying off your mortgage? Or optimizing your income, insurance, food, gas, and other costs (see my 30 Day Challenge)? Because those are things you can control.

  38. Ramit,

    I normally don’t comment on your blog, and normally don’t read down to comment 40. Right now I am supposed to be putting down some notes from a meeting I had with a business mentor about venturing out with entrepreneurship – but I find myself figuratively a million miles away, reading about a topic albeit educational but far removed from my circle of influence. Funny where procrastination leads.

    I like your article, one thing that does strike me is your tone towards personal empowerment. Ultimately the macroeconomic situation is the aggregate of our individual decisions and we need to take steps within our own lives to be more responsible, accountable and financially honest. Debating the government’s next move is an effective way of avoiding the responsibility of planning our own lives.

    It is of course valid but probably not the most effective application of our skills towards bettering our own lives. I love the mission of your blog – best of luck with your mission.

  39. Millionaire Acts

    Nice to stumble your blog dude! We’re in the same niche. 🙂

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