Almost Half of Americans are Financially Fragile

Or ‘financially impotent’ as the author likes to describe himself in this article, and gladly includes himself in this group of financial ignoramuses – even though:

  • he appears prosperous
  • has a good income
  • has an enviable resume
  • is successful by any measure of society’s values

But like half of Americans he couldn’t muster up $400 to pay an emergency bill. 

“Research indicates that when people get some money—a bonus, a tax refund, a small inheritance—they are, in fact, more likely to spend it than to save it … It could be, that people don’t have the money to save.” 

But it’s all about choices, as he admits. I wrote in a previous article about this interesting insight that Nora’s uncle was telling me about: that many people outmanoeuvre themselves from choices (i.e. optionality) and that choices are the key to life. 

Whilst the writer here thinks he’s ‘free to make choices’, in reality he has taken decisions that decrease his optionality and increase his fragility (but give the superficial appearance of SUCCESS especially to the Jonases).

“Choice, often in the face of ignorance, is certainly part of the story. Take me. I plead guilty. I am a financial illiterate, or worse—an ignoramus. I don’t offer that as an excuse, just as a fact. I made choices without thinking through the financial implications—in part because I didn’t know about those implications, and in part because I assumed I would always overcome any adversity, should it arrive. I chose to become a writer, which is a financially perilous profession, rather than do something more lucrative. I chose to live in New York rather than in a place with a lower cost of living. I chose to have two children. I chose to write long books that required years of work, even though my advances would be stretched to the breaking point and, it turned out, beyond.”

And then comes a ‘shock’ which as he admits wasn’t actually a shock. Nonetheless, as fragile as he is, it wiped him out.

“And then, on top of it all, came the biggest shock, though one not unanticipated: college” That is, paying for his two daughters to go to college.

The result: 

“It meant that we had depleted not only our own small savings, but my parents’ as well.”

It’s a fantastically revealing article where you can sense that he feels somehow shortchanged, and that he deserved better. That his honourable choices shouldn’t  mean he should face financial insecurity, but alas he did. There’s lots more to unpick here regarding antifragility (perhaps more soon).

But it confirmed to me all the more reason to work towards financial antifragility as part of this quest.