A Money Coach in Canada

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photo credit: Bast

I bet some of you have been in situations, work and otherwise, where the hard questions weren’t asked.   Where, out of fear of reprisal, consequences or even simply not wanting to appear dumb or the odd person out, no one spoke up or asked frank questions.   The elephant in the room – perceived or not- continued to munch away contentedly, unreferenced.  Here’s how this can play out:

Today the US Federal reserve had to bail out yet another financial company – AIG – to prevent an shattering impact not only on the US economy, but the global economy.  This means the American public is now an 80% shareholder of AIG (how ironic!  The US may become socialist, yet!).

This isn’t hyperbole:  we are at real risk of an economic shakedown the likes of which none of us have seen.   Follow the path:

1.  Lenders offer mortgages to people who did not have the means to keep up the mortgages.

2. Those lousy mortgages got bundled up with other financial  products and sold to investment firms/banks as packages.

3. The truth will out, and the mortgages started to default.

4. Because the mortgages were bundled, it took a while for anyone to realize they had a lousy package.

5. When  the horrible truth started to dawn,  and banks/firms realized they held a lot of lousy mortgages, they were unwilling to continue lending money to anyone but super-stars (if even them) with top-tier credit.

6.  This means your average decent joe can’t get a loan … to buy a home … to invest in a business … and the economy starts to slow.

7.  The US gov’t tries to encourage spending by giving away cash to everyone.   Central banks cut interest rates to encourage people to at least TRY to borrow.

8.  And meanwhile, stalwart companies like Fannie Mae, Freddie Mac, Merrill Lynch, Lehman Brothers and AIG get sucked under.

And as people are starting to bitterly remark, it’s your average person who is stuck holding the bag.

What does this have to do with Asking Hard Questions?

Well, a lot of people didn’t ask hard questions in the process above.

  • Which product managers did not ask whether 40-year, 0% interest etc. mortgages should be given?
  • Which mortgage brokers did not ask whether they should approve a mortgage to people clearly incapable of handling the payments?
  • Which investment dealers did not ask exactly what was inside the bundles they bought?
  • Which investment advisors also did not ask, before selling them to investors?
  •  Which governments, happy with laissez-faire did not intervene?

Well, the ones who didn’t were the ones probably happy to take the commissions and fatten their wallets.

It’s easy to be judgmental.  The fact is, we, in our little lives in our little spheres, don’t ask questions either.

I vote we start asking.  We start pressing even when it feels awkward.  Who knows — we might just save the world.

About the Author


Imagine if Canadians were known for being all over their money. Engaged. Proactive. Getting out of debt. Savvy. Saving. Generous. Nancy wants to help. Nancy started her own journey with money over 15 years ago, and formed her company “Your Money by Design” in 2004 to help others along the same path. It’s not the usual financial advising/investment stuff. It’s about taking control of day-to-day finances –managing monthly cashflow effectively, spending appropriately, getting out of debt, saving. If you're ready to take control over your finances, pop by her business site, YourMoneybyDesign.com

3 Comments

  1. What I think happens is that we have a culture that is more than happy to question failure, but is scared to death of questioning success.

    It takes true discipline to analyze both. If we had looked closer at the profits in the financial industry for the last few years, perhaps we would have started to ask those hard questions you refer to.

    [Reply]

    Sep 17, 2008
  2. tracey

    no one wants to question profits, particularly when our investment holdings are returning ….. even though the means that these profits are obtained by are clearly short term and not sutainable. easy come …… easy go!

    [Reply]

    Sep 17, 2008
  3. brad

    Hopefully the powers that be will learn–and apply–a lot from this experience. Just as the safest time to fly an airplane was after 9/11, it would be nice to believe that the best time to be in the stock market will be after it recovers from this downward spin and mechanisms are put in place to ensure that this particular brand of mess doesn’t happen again. Not that there’s any way to prevent future declines, but as we learn from each crisis the market may become more resilient to future storms. At least that’s what I’d like to think. 😉

    [Reply]

    Sep 18, 2008

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