This Week In Your Wallet: Scams, Stamps and Student Loans
Money Rules #42, #43 and #44 read: Don’t Shop Angry. Don’t Shop Sad. Don’t Shop Hungry. Why? Well, anger — though it would intuitively seem otherwise — makes us more optimistic. And we’re more likely to take risks when we’re feeling that way. For that reason, you shouldn’t invest when you’re angry either. Sadness feels like a big old hole. And when we’re down, we’re more willing than we should be to swipe our credit cards to buy something — anything — to fill that up. As for hunger, I know, your mother told you that. But it’s not just that hunger makes you buy the thing you’re hungry for. It’s that hunger makes you buy more of everything.
Those insights — and so much more — are tackled by Wall Street Journal columnist Jason Zweig weighing in on the new book, Noise: A Flaw In Human Judgment from Nobel Prize winner Daniel Kahneman, Olivier Sibony and Cass Sunstein. “How does the book define noise,” Zweig asks. “It’s deviations in judgments that should be identical.” For example, the fact that doctors order significantly more breast cancer screenings for patients they see before, rather than after, lunch. Or that judges recommend prison sentences that vary by years when presented with hypothetical prisoners who have committed the very same offenses.
And yes, this sort of noise gets in the way of doing the right thing with our money. (It’s also a big reason why current investing trends are, in particular, not working for women.) The problem is, we often don’t realize noise when we see or hear it, and often don’t even know that it’s there. What’s the solution? As Kahneman told Zweig: Discipline. And patience. Investors should try to follow a methodology no matter what is happening in the outside world. Comparing what is happening today to historical data is another smart move. As is getting multiple opinions. And, if you feel your emotions getting the better of you, try to put a little distance between yourself and whatever financial decision you’re facing. Buy yourself time. Sleep on it.
It will come as no surprise to most of you that I get a lot of email newsletters. A lot. Some I open all the time. Some, only when I have the time. Vogue Business goes into the former category, because it pushes me to think differently with stories like this one about how Gen Z is investing, not just in traditional stocks, bonds, etc., but in the iconic items of luxury labels that they can a) wear and b) sell for a profit. “Gen Z’s earnings from stocks and bonds are predicted to bring in just a third of the returns enjoyed by previous generations, according to Credit Suisse’s global investment returns yearbook 2021,” Lucy Maguire reports.
So they’re looking elsewhere. And where are they getting the advice on what to buy and how to buy it? Social media, of course. She cites a survey from DoSomething Strategic that notes 45% of Gen Z turns there for financial advice. Will investments in these alternative asset classes — handbags, sneakers, music rights, “demi-couture clothing” which the story explains is bespoke, but with a price point between haute couture and ready to wear — pay off? Are they truly alternative asset classes, rather than whims? Time will tell. PS: If you’re more interested in building a sustainable wardrobe, here’s the scoop.
Steering Clear Of Covid Scams
Vaccination rates may be rising, but pandemic scams aren’t going away anytime soon. That’s what experts told HerMoney reporter Isabella Simonetti as she dug into the latest and greatest (can you say that about scams?) sweeping the country. Among those to have on your radar – and how they work:
- Vaccine scams. You’re asked to take a short email survey about your vaccination experience — and give away valuable personal data as part of the process. Malware may also be installed on your computer. Don’t be swayed by “rewards” for participating. They’re a ruse.
- LinkedIn scams. Be wary of emails you receive via the platform regarding job openings. They’re being used to prey on the unemployed and other job hunters.
- QR scams. They may now be accepted as the safer way to check out a restaurant menu — but only use ones from reputable sources. Otherwise, you put your data and device at risk. Here are 8 tips to shut down hackers before they can harm you.
Goodbye To Gigs?
Finally, although the April jobs number was a disappointing one, economists are pointing out that a large number of gig and part-time workers seem to be finding full-time employment. That’s good news, as USA Today points out, for workers for whom these full-time jobs bring benefits like 401(k), subsidized health care, and — thanks to the last year’s experiment in remote working —increased flexibility. Also in the offing, higher wages. Bank of America, for example, has raised its minimum wage to $25 an hour. Cheers to that.
Have a great week!