Financial Discretion

In these days where discretion seems to have been lost on most of my generation and completely on the following generation (in my opinion), I wonder what this might mean for society in general, but in Personal Finances in specific.

What do I mean by Discretion? The dictionary says one of its definitions is: the quality of being discreet, esp. with reference to one’s own actions or speech; prudence or decorum: Throwing all discretion to the winds, he blurted out the truth.

This loss of the social mores and verboten topics has meant a lot more frank discussions about some subjects that needed much more inclusion as part of day-to-day discussions, specifically in terms of how Financial Institutions do business and the huge business of Financial Services in general. I applaud the frank talk and think this kind of lack of

Loose Talk & Indiscretion Can Hurt

discretion is very much needed (i.e. full disclosure). We have seen that many Ponzi Schemes thrived on this diescretion when it came to how they operated (i.e. it was a secret how you were making more than the market, and thus you should not be telling anybody about how you are doing it).

Are you discrete about your money? I am somewhat, in that I don’t typically talk to friends and acquaintances about the specifics of my money, and I think I inherited that ideal from my Parents. I never knew how much money my parents made, or what financial issues they might be having, and I still don’t know much about their finances, but is that any of my business? When I was a child, I would argue, no, it wasn’t my business, now there might be an argument that I should know more, and I am finding out some things slowly but surely.

Given the current generations need to talk about everything (on Facebook or whichever social networking site is now the next big thing), will this change how Money and Finances are talked about? I hope so, but I suspect that some of the more nefarious folk out there may learn that it is very easy to hide in plain sight (i.e. doesn’t matter if everyone talks about you, if they don’t know what you are really doing), and in fact open discussions about you add a level of legitimacy that will help you put more wool over more folks eyes (I hope not, but my guess is that will be the case).

Discussion usually causes change, but in this topic, will frank discussion change things for the better?

What do you think?

If you have got it flaunt it, seems to be the catch phrase these days, but I like the idea that folks really don’t know much about me and my money, for some odd reason it makes me feel safer.

Do you openly talk with your children or others about your money? Are there any taboo subjects in the area of money out there any more? I leave this open to you good reader to comment about whether I am full of wind, or whether you agree.

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Whither Tank Man

So Many Years ago?

Seems like only yesterday, but it is many years since Tiananmen Square and the staggering image of The Tank Man and his resolve against a PRC tank. Who was he? No one really knows, and why he did it isn’t known either. Was he really protesting, or was he just pissed off at the tank commanders for telling him to move on? Is he alive still (not likely in my opinion)?

I give you a very interesting video from PBS about Tank Man, and the Tiananmen Square incidents, an important time for the world, and maybe a time we should not forget too soon either, given that China’s politics is now the 800 lb. Gorilla in the room economically, that no one likes talking about, but isn’t going to leave any time soon either. Economically China’s might is second to none now, but is that a good or a bad thing? Don’t know, certainly worth thinking about, but remember this time in history as a reference point as well.

Hey I Want a Finance Video

For those of you looking for a finance video, here is something else from PBS, about the Madoff affair, yes a popular topic for me, but the more you learn about Ponzi schemes, the less likely you are to get tricked? Hope so!

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Video Review: Madoff and the Scamming of America

Ripped Off: Madoff and the Scamming of America from the History Channel, is an entertaining video about the Madoff Affair. I borrowed it from the Ottawa Public Library (which I strongly suggest you support if you live in Ottawa).

The video’s content is no more in depth than most of the Magazine articles I have seen on this topic, however, it does do a very good job of putting a face on the victims of this crime, and that is what makes this video intriguing to me.

Madoff and the Scamming of America
The DVD from Amazon

Bernie Madoff was not just a Wall Street insider, he was the Wall Street insider, and because of his positions on the NASDAQ board, and his investment house, he was the last person to be suspected to be running a Ponzi scheme, however, as we have learned, it is always the least likely ones that seem to be the biggest perpetrators  of this kind of scheme.

The video outlines Madoff’s rise to legitimacy, and gives some useful background on the Ponzi Scheme and about the man who was first caught running this kind of scam Charles Ponzi . The main allure of these kind of schemes seems to be at a few social levels:

  • Exclusivity is a good lure, if the scheme does not allow just anyone in, more people want to join it. To quote Groucho Marx, “… I would never join a club that would allow me to be a member…”.
  • The person who runs the scheme is typically a Sociopath, or has an inate ability to manipulate family and friends into investing. These schemes start with family, friends and then goes after communities (fellow church goers, as an example).

The video does a very good job outlining how regular intelligent (and in this case very rich) people and institutions (many hedge funds were highly invested in Madoff’s scheme) were duped by this man.

At times I found myself feeling very little sympathy for the investors who lost their money (which is an awful thing, and I feel ashamed that I do), but at times you keep asking, “How did you fall for this?”. I then remember how much money I lost on Nortel and feel even more ashamed, for reveling in these people’s plight (i.e. everyone can be fooled at some time, by a slick operator).

In the words of Gordon Gecko… greed is good…” is every one’s credo, when it comes to money (OK, most people).

My Opinion

I found this video entertaining, a little insightful, but I didn’t pay any  money for it, and I am not sure I would buy it, but getting it from the library made it a fun 50 minute watch.

There is also another documentary about how we are heading for the next great depression, which I didn’t watch.

This was an unsolicited review (for disclosure sake).

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Random Thoughts: Health Care Week

Health Care in the U.S. but at what co$t?

I am not commenting on the relative cost of the medical service reforms in the states, more on the rifts being created down there about the passing of this bill. People are threatening the lives of their Congressmen and Senators because they voted for this bill. It’s not like they introduced Gun Control, but again the visceral (word of the week) responses to me are staggering.

In Canada we have emotionally charged responses to Ann Coulter’s visit, must be the time of year, lots of folks getting really amp’ed up over issues (especially if you woke up this morning and my financial Guru was dead (to paraphrase an old Nazareth song)).

What were the financial bloggers up to? Darn good question let’s see what bee is in their bonnet (for this lovely spring week in Ottawa):

  • Preet follows up on last week’s discussions by the Canadian Capitalist and Larry MacDonalad on ETF tracking errors with his own hastily written post Index Fund Tracking Error Sources (he wrote it on his laptop before catching a flight). He doesn’t mention the one important Fund Manager’s Condo needs a new roof additional cost, but I think it’s implied in the MER.
  • The Couch Potato talks about the folks that they met that are Mutual Fund Refugees, sounds like the Mutual Fund business may take a hit soon (we can only hope).
  • Michael James became very reflective and asked What is The Value of Your Life which he claims was sparked by a discussion he had with me. I value my life infinitely, whether he agrees, you can read for yourself.
  • The Canadian Capitalist asked a tough question How Do You Say Bubble in Chinese and none of his commenters ever did! They complained about his colour scheme and Feng Shui. The answer is 名 泡;泡沫;诈欺
  • Kathryn at Million Dollar Journey wrote about Alignging Your Dreams, Financial and Otherwise sort of like Feng Shui for money (come to think of it)
  • Larry MacDonald is weighing his options when it comes to The dreaded central-vacuum decision, sounds like something I would write. We have a central vac, but are planning on moving the main unit, to the garage, from the basement (thus blowing dust and crud out there).
  • Gail V-O asks Are You Worried About Mortgage Rates?, you should be, if you can’t withstand a hefty increase in the near future.
  • Ellen Roseman writes about Future Shop’s Prcing Error Leads to Reforms which is good to see, especially if they gouged a blind man (that is pretty low, and Karma will get you if you make money that way).
  • Mike at the Four Pillars wrote a topical (for me) post about the Rules For Converting your RRSP to an RRIF which is very useful.
  • Financial Jesus put out a whole bunch of Quotes that make you act including one that is very financial based: “The best time to plant a tree was 20 years ago. The second best time is now.” – Chinese Proverb, same is true for financial planning, and saving!

Other Interesting Sites

I don’t view this site as a Personal Finance site, but it is worth a read if you want to read some interesting “slice of life” stories, The Year of Giving site chronicles a now unemployed man’s journey to give $10 away to folks and share the stories he gets for his $10. I like it, but then again, I enjoy slice of life chronicles like this.

I came across another interesting site, and that is LifeHacker, which has a lot of helpful How To posts like how to tame clutter by asking how much is enough but other interesting stuff as well, good read.

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