A Financial Advice Stimulus Plan?
Mr. ToughMoneyLove is surprised to report that the New York Times thinks like me, only three months delayed. Yesterday, the Times published an opinion piece by a Yale economics professor proposing that the federal government launch a financial advice stimulus plan.
The Yale professor thought that a direct government subsidy paid to independent financial advisers was the way to go:
To qualify for a subsidy, the advisers would have to sign a statement promising loyalty to their clients and agreeing to accept only the subsidized hourly fee, and never any commissions or kickbacks. The subsidies might come to $75 an hour, at a very rough estimate, and if 50 million Americans averaged four hours of consultations, the eventual cost might be $15 billion a year — a substantial expenditure, but a worthwhile one.
That’s a very interesting concept floated by the Times but it’s not an original one. I actually wrote an article three months ago, suggesting that the new Administration start an initiative to provide personal finance education to the middle class. In fact, I was even more specific. The Tough Money Love financial advice stimulus plan included:
1. a one-time tax credit of up to $750 for any middle class (less than $75k income) taxpayer who pays for financial planning advice from a certified, fee-only finance professional;
2. a mandatory independent personal finance consultation for all sub-prime loan applicants; and
3. a mandatory independent personal finance consultation for all student loan applicants.
I still think my plan is better, if only for points 2 and 3.
I wonder if anyone will pay more attention to the Times proposal than to mine? The better question is will government care enough about financial ignorance in general to include personal finance education as a component of all of the other money that will be thrown at our collective financial problems. Probably not.
Actually, if the giddiness and euphoria projected by the media and celebrity-types about today’s inauguration are any measure, all of our economic and world problems should be solved by the Obama team in relatively short order. That being the case, we can remain financially ignorant while our government miraculously rights the economic ship that it capsized to begin with.
Oh well. I suppose your best takeaway from this post is that if you want the hard truth about money and personal finance, you can read it here. Alternatively, you may find it in the New York Times but it will be three months later.
Image credit: Steve Woods