6 financial lessons of 2011

by Nick on December 22, 2011

As we count down the days to the new year it’s time to reflect on 2011 for a moment.  Have you learned anything from the craziness of 2011?  Was 2011 even crazy or was it just a normal year, with ups and downs and everything in between?  Either way, there are a lot of things we can take away from 2011.  DailyFinance suggested 6 “big” financial lessons from 2011.  Let’s see what they had to say and then talk amongst ourselves… Of course, it’s my blog, so I get to give my humble opinion first (in parens)… 🙂

  1. The Roller Coaster Ride Isn’t Over.  (Seriously?  This is a “big financial lesson”????  Volatility isn’t going anywhere?  How is this a lesson?  It might be “true.”  But it’s not a “lesson.”)
  2. Don’t Obsess Over Today’s News.  (Good.  I like it.  Save and invest for the long term.  “Today’s news” moves the market.  But it’s (a) out of your control and (b) temporary blips.  So I “ignore” today’s news when it comes to investing.  It’s just not worth my time.  I’m not convinced that anyone can “trade” the news and be more successful than a passive investing style in the long term.)
  3. It’s Not Just About the U.S.  (We learned this in 2011?  Newsflash: Europe existed before 2011.  And it was “relevant” to the markets a long time ago.  Yes, there was a time “years ago” when news didn’t travel like it did, but come’ on.  In their defense, if you didn’t “know” the world mattered before 2011, you probably know it now unless you lived under a rock for the last 12 months.)
  4. Politics Govern Your Pocketbook.  (Again, we learned this in 2011?  Yes we had the whole “debt ceiling” debacle in 2011.  But we’ve known since at least the New Deal that politics were relevant to your wallet.  That being said, 2011 involved a lot of turmoil based on broken government.  But you have more control over “your” wallet than “politics.”)
  5. Take Control of Your Finances.  (Yes.  Again, not sure this is a 2011 lesson, but I’ll give it to them.  You can make more of an impact on you than any government program.  DailyFinance suggests some major drugs coming off patent that made generics available for the first time.  Of course, requiring seniors to scan patent expirations to know when they expire is a bit extreme, but they could have asked their doctors and saved a few bucks.)
  6. America Is Still a Good Investment.  (Although I agree, I’m more focused on American capitalism and business than U.S. Treasury popularity.  Business opportunity in America is endless.  And companies are actually making money in America.  While we have our ups and downs capitalism generally works.)

OK.  Although a bunch of these aren’t “new” for 2011, there’s really very little that could be considered “new” for 2011.  The problem with focusing on one year is that it’s a very small piece of the finance puzzle.  It’s the “today’s news” of the decade, so to speak.  But I would have liked to see a few specific instances of financial lessons that individuals or small business owners could use in guiding their lives. 

For example, I’m not sure “U.S. Treasuries were popular” does much to help you.  Does that mean you should invest in Treasuries?  Also, I’m not sure “politics govern your pocketbook” helps either.  Is there a “politics are crazy” mutual fund that goes up the crazier Congress is?  Maybe there should be… Maybe the volatility index is something people consider close… But seriously, it doesn’t “help” you.

I would have liked to see more things like:

  1. Don’t get arrogant in business.  If pressed hard enough, consumers will find a suitable alternative.  So respect your customers or get used to apologizing;
  2. Dishonesty can have far reaching ramifications.  Allegations of phone hacking took down a 168-year-old paper causing loss of 200 jobs and stranding 7.5 million readers.  And that’s just the tip of the iceberg.  The allegations go way beyond finance.  (And I admittedly know very little about the actual details.  The point is this business is alleged to have done some pretty shady things and was forced to close down after the better part of two centuries.); or
  3. No matter how bad you think you have it people have likely made millions from less.  (Again, not new to 2011, but we learned more about Dani Johnson’s story this year.)

So yeah, very little specifics are so new to 2011 that they can be considered widespread lessons.  But it’s important to realize that honest, simple and steady positive financial habits will set you up well over the long term.  Oh, and Netflix made a really dumb mistake, IMO.

What did you learn about money in 2011?  What’s the dumbest thing you did?  Smartest?

Until next time, put your credit card down and slowly step away from the mall!

Like what you see here? Tell your friends by sharing it with one of the buttons below. Post this to Facebook or Tweet it to help your friends and family, too. And don’t forget to send me an e-mail or comment to say hello. I love hearing from you.

Image: Grant Cochrane / FreeDigitalPhotos.net

{ 0 comments… add one now }

Leave a Comment

Previous post:

Next post: