Devil’s Advocate Column

If you read enough personal finance news articles or watch enough television, you’ll notice the pundits telling you the same exact principles. Buy for the long term, invest in index funds, don’t try to time the market, your home is the best investment you can make, etc. In this column, we argue the other side of conventional personal finance wisdom to shed light on whether these beliefs are justified or merely the echoes of nicely dressed parrots. Sometimes these articles are paired with an Angel’s Advocate post.


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 Devil's Advocate 
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Don’t Invest In What You Know

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This is a Devil's Advocate post.

One of Peter Lynch’s most famed principles of investing is “Invest in what you know.”

I humbly disagree.

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 Devil's Advocate 
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Don’t Go To A Private University

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This is a Devil's Advocate post.

All throughout high school, the importance of going to college was everywhere. If it wasn’t my parents, it was my teachers. If it wasn’t my teachers, it was the guidance counselor. Everyone stressed the importance of college. In fact, they were even more specific. They stressed the importance of getting into a good college, which in guidance counselor terms meant a college that was good in the field you were interested in. In many many cases, that college was a private university. While safe advice, it’s not necessarily true.

Going to a public university gives you a better shot at success than a private university. You don’t have to go to a private university to succeed. In fact, going to a private university gives you no advantage over a public university. To take it to an extreme, going to a private university puts you at a disadvantage in life because you are paying significantly more for your education, thus saddling you with debt obligations, with no benefit.

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 Devil's Advocate 
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Don’t Pay Your Children’s College Education

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This is a Devil's Advocate post.

You should not sacrifice your retirement, your savings, or your future financial stability in order for your children to attend college. They are fully capable of supporting themselves, just as generations have before them.

The average cost of a year at a private four-year college institution in 2007-2008 was $23,712. The cost of a year at a public four-year college institution was $6,185. Both were increases of over 6% from the prior year and don’t even include room and board! [CollegeBoard.com]

Bottom line (a surprise to no one): College is expensive.

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 Devil's Advocate 
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Don’t Save Your Money

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This is a Devil's Advocate post.

Conventional wisdom says that you need to save your money. You save for retirement, save for your kid’s education (unless you subscribe to idea that you shouldn’t have kids), save for this, save for that. Sacrifice a little today, let some magical force called compound interest take effect, and you will be rich beyond your wildest dreams in 40 years!

However, Americans aren’t stupid. We didn’t save our money to launch the Revolutionary War to escape taxation without representation, we just did it. Heck, we spend so much that our savings rate is negative, beat that!

Here are only a few good reasons why we shouldn’t save.

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 Devil's Advocate 
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Save Money, Get A Divorce!

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This is a Devil's Advocate post.

Marriage is a beautiful and wonderful thing. I just joined the club several months ago and it’s not too bad so far. I’m not saying that you shouldn’t fall in love and spend the rest of your life with someone, I just think that the accounting details make it a raw deal. I’ve talked about how you shouldn’t get married in the past, but if you’ve already let the cat out of the bag and paid for the license, here are some more reasons why you should considering going back to the courthouse to get your money back (it’ll be pricey but think of the ROI!).

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 Devil's Advocate 
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Don’t Pay Your Dues

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This is a Devil's Advocate post.

A lot of young professionals hear this line all the time: “If you pay your dues, you will be rewarded by the company in the future.” Sometimes “paying your dues” refers to working your ass off for a few years, being a high performer, then getting rewarded with greater opportunities. That’s the good kind of “paying your dues.” The “paying your dues” I’m going to rail against today is the one where you basically work the grind, day in and day out, until you’ve been with a company long enough to be entrusted with more responsibility. That’s promotion based on tenure, not based on merit. That type of “paying your dues” is crap and here’s why you want to get out now.

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 Devil's Advocate 
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Devil’s Advocate Roundup

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This is a Devil's Advocate post.

Over a year ago I had the crazy idea of trying to justify the other side of every “common sense” or “mainstream” personal finance idea I could think of. The list below is in reverse chronological order, meaning the very first Devil’s Advocate post is listed at the bottom and it tackled one of the cornerstones of our personal finance belief system. Rent Forever, Don’t Buy A Home is a post that I think defined the Devil’s Advocate series and one that still garners comments to this day, nearly a year later. (There have been 161 comments, the latest was April 9th!)

Some of the Devil’s Advocate posts have gone against ideas that aren’t as mainstream and against answers that aren’t necessarily clear cut, such as Don’t Have Kids (which is based on a lot of factors, only one of which is finances), but I’ve had a great time writing them all.

I have a few good ideas in store for future articles but I wanted to do a little roundup, in part for myself to see all the topics we’ve covered, so that you could join in the rock throwing against mainstream ideas.

  1. Don’t Invest in the Stock Market
  2. Cancel Unused Credit Cards
  3. It’s Okay To Ignore Your Problems
  4. Ignore Personal Finance Experts
  5. Don’t Have Kids
  6. Buy More House Than You Need
  7. Don’t Move From Job To Job
  8. Get A Store-Branded Credit Card
  9. You Don’t Need College to Succeed
  10. Four Reasons You Should Get A PayDay Loan
  11. Don’t Get Married
  12. Buy That Home Warranty
  13. Pay Cash for Everything
  14. Don’t Budget to the Penny
  15. Invest In Your Company
  16. Say No To Credit Card 0% Balance Transfer Arbitrage
  17. Why Roth IRAs Are Bad
  18. Lease A Car, Don’t Buy It
  19. Don’t Just Buy Index Funds
  20. Don’t Optimize Payroll Deductions
  21. Rent Forever, Don’t Buy A Home
  22. Don’t Rollover Your 401(k) – Missed this one!

Have a great weekend!

 Devil's Advocate 
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Devil’s Advocate: Don’t Invest In The Stock Market

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This is a Devil's Advocate post.

Today’s Devil’s Advocate post is going to hit at the very heart of the financial sector. The stock market is one of the cornerstones of the American economy and one that has brought riches, big and small, to many an investors. However, many fail to realize that it’s a zero sum game. For every one of those rags to riches stories about a kid who took $1,000 and turned it into a million, there are many many more stories about a single mother of four losing it all (yes, I’ve chosen extreme examples for both). So all those awesome stories you hear, that’s only half of the equation!

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