A Public Failure to Walk the Money Talk

May 15, 2009 by  
Filed under Fools of Finance

walk_the_walkHow many of us have “talked the talk” but not “walked the walk”? Well, add a money reporter from the New York Times to the list.

Mr. ToughMoneyLove doesn’t particularly like beating a man when he is down, but when you write about your own stupidity to sell papers and books, I’m all over it.

In this case, I am calling out Edmund Andrews, a 20-year veteran reporter who writes on economic policy from the New York Times Washington D.C. bureau, including coverage of theĀ Federal Reserve, monetary policy, and tax policy.

Andrews, we now learn, either doesn’t know what he is writing about or doesn’t care enough about the subject to apply it to his own life.

In an extended Times mea culpa (actually an excerpt from his upcoming book), Andrews recites almost every financial mistake a person could make, punctuated by an “I did that.” He sure did. Let’s list a few:

  • Sold stock and borrowed over $400k on a no ratio junk mortgage, with take home pay (after alimony and child support) of only $2777 and while still legally obligated on the mortgage for his ex’s house.
  • Remarried himself to a spendthrift so that between the two of them, they were spending $3000 more each month than they were bringing in.
  • Used overdraft protection to the tune of $50,000 in credit card debt.
  • Twice refinanced the credit card debt into even worse gimmick loans.
  • Borrowed $15k from his mother as a failed stop-gap measure.
  • Intentionally defaulted on his mortgage and waited for the foreclosure notice.

The Times pays this guy $120k/year to write about money. Is it any wonder that the Times itself is struggling financially? I’ve always thought that many New York Times writers don’t know what they are writing about. Andrews did me the favor of openly making the case.

So now Edmund Andrews can join the ranks of those wanting to make money by telling “don’t do what I did” stories of redemption. Only we don’t know yet that Andrews has redeemed himself. All that we know is that he is entrepreneurial enough to use his writing skills to exploit his financial incompetence.

I don’t plan on reading his book. I’ve made plenty of mistakes but never the mistakes that Andrews has. He should be reading my book, i.e. this blog as well as other writers who do as they say. And then he should walk the talk.

As a final note, what really bothers me about highly publicized failures like Andrews is the effect on readers. The natural human reaction to learning that someone who should know better is a financial disaster is that maybe you shouldn’t feel so bad about your own lousy money decisions – classic rationalization.

Actually, you should feel so bad.

Image credit: Waterwin

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11 Responses to “A Public Failure to Walk the Money Talk”
  1. Snowy Heron says:

    To top this, Stan Hinden, who used to write on personal finance for the Washington Post, admitted that when he retired he took a single life pension, rather than a joint one. I could not believe that any writer on personal finance would actually make a decision like that since I have never read anything on this subject that did not say to take the joint pension. He did say that it probably was not the wisest decision (especially for his wife, should he predecease her!), but they wanted the extra income to be able to afford a Nordic cruise. It just made me realize that newspapers hire writers, not necessarily, or even ever, people who know the subjects that they are writing about!

  2. Well MP Dunleavy comes to mind for the worst online personal finance blogger award.

    Seriously, the woman had 2 mortgages going when she could barely keep her head above water. Then the housing bubble burst all over her dreams.

    I do give them some credit for being bold and entrepreneurial. That’s what people WANT to hear, bold, brash, annoying. No one wants the safe, sensible “spend less than you earn” advice.

    It’s too sugary and boring. Not sexy. Borrowing $400k and living on the edge $3000 above your net income each month is sexy because everyone lives vicariously through that and thinks: THANK GOD IT WASN’T ME

  3. Rob Bennett says:

    My take re this sort of thing is just the opposite of yours, ToughMoney.

    I think it’s great when people acknowledge that the conventional advice doesn’t work. That’s what the guy is really showing. If the advice worked, he would have been able to stick with it.

    You blame the person when the advice fails. I blame the advice when the person fails.

    Money advice needs to work for people or it is no good, in my assessment.


  4. Gail says:

    Unbelievable story…I have absolutely no sympathy for this writer. He made mistake after mistake and should have known better. What I find incredibly stupid and naive is that he ended going back to the mortgage broker who got him into this mess in the first place and “hired” him as his financial advisor…with predictable results (deeper in the hole). Equally astonishing was how much his “life plan” for his wife (ie, that she would become a “go-getter”) dramatically differed from her own (to settle down as a homemaker). Maybe if they had discussed this before they got married they would have planned for a more financially realistic lifestyle. Wouldn’t it be ironic if his next book about toxic mortgages turns out to be his personal financial salvation?

  5. Matt SF says:

    For whatever reason, stories like Andrews do very well. For the “less proactive” crowd, they like to read about someone screw ups so they don’t step on the same land mine.

    Human nature is a funny thing.

  6. Rick Beagle says:

    Wayyyyyyyyyy back in High School, I had the honor of working on the school newspaper. During my stint with this organization I managed to create a popular little horoscope under the byline of Mr. Rubio. These little blurbs were written between classes, and to be honest, it was great fun to watch school mates read these when the issues came out (they were very colorful, and relevant to the school).

    In one issue, my real name was accidentally placed in the byline (instead of my fictional character). Resultantly, that very day a young woman of casual acquaintance caught me in the halls alone and with unabashed adoration stared into my eyes wide and awed, “I didn’t know you were a psychic.”

    Mr. Rubio

  7. TStrump says:

    It’s amazing how many financial experts don’t know anything at all.
    The irony is they depend on the income from their advice columns or blogs, because they can’t seem to manage their own money.

  8. kitty says:

    The guy may not be a financial genius, but he can write. The story reads like fiction, it’s easy to read and you “can’t put it down” wondering what comes next. Would I take his financial advice – no way. But if he were to write fiction, I’d check it out. Not that I know much about this stuff, just go by first impression.

    As FB @ FabulouslyBroke.com said, this type of story is “exciting”. You want to know what will happen next – will they lose their home at the end? will they not lose it? It also makes you feel better and smarter. You read and think “oh, I haven’t made this mistakes, I must be so smart”. The fact that the author has some amount of writing talent is a bonus.

    Asking why people read him rather than some boring story about a family living within their means, buying stuff they can afford and saving money is akin to asking question why soap operas don’t show “normal” families where people stay married, everyone knows who the father of the baby is and everyone goes to work every day. Back when I was in college and every female student watched daytime soap opera, one girl said “I like watching people who have more problems than I do”. This guy’s story invokes the same sentiment.

  9. Matt says:

    I read this article and I agree w/ kitty above in that it sounded like fiction. I read the whole thing dumbfounded thinking *NO ONE* can be this stupid. Like Mr. Toughmoneylove, I’ve made mistakes in my time of managing my own finances but the things that this guy did were beyond the pale. Hindsight is 20/20 I suppose and with the hype of the housing bubble, I can appreciate people getting carried away with the risk they could carry and maybe doing 1 of the things he did wrong but *ALL* of them? Forget Joe Cassano. *THIS* guy is patient zero of the financial crisis.

    BTW: “Mr Rubio”–your comment made my day. Priceless.

  10. katy says:

    The Times guy is a real dingus! (LOL)

  11. AnnJo, Seattle says:

    I read the original NYT article, and also a follow-up piece (don’t remember who wrote it) that told a number of details that the NYT writer carefully omitted, like the fact that his wife had already declared bankruptcy twice. As entertaining as Mr. Andrews’ article was, in light of some of the other details that have come out since, it is obvious he has carefully edited his story, to the point of dishonesty. Sadly, most of his deception seems to have worked best on himself.

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