I’m starting to create a collection of stories about financial journalists who are not money experts.
It’s not difficult to find examples.
Oh, they are experts alright, but not at managing money. They are experts at writing, radio broadcasting, or TV broadcasting — whatever their specific, journalistic specialty.
So far I’ve written Mainstream Financial Experts Are Experts at Creating the Illusion of Competence and More Evidence that Financial Advisors and TV Personalities are Not Experts talking about the lack of money expertise among financial journalists.
Today is another piece of evidence to add to the record.
Jean Chatzky Interview
Many of you know I like to listen to podcasts when I walk alone (I take one walk alone each day and two with my wife). One of my favorites is PT Money’s Masters of Money podcast. I like it because I know PT, I usually know the guests, and the stories are very interesting.
A while ago he had a podcast with financial journalist Jean Chatzky (here’s the transcript if you prefer to read it). If you don’t know who she is, here’s the Wikipedia version of her life.
Let me begin by saying that I like Jean Chatzky. In my opinion, her advice (these days) is pretty good. She also seems like a nice and friendly person, though I have never met her.
This post is not meant to show how terrible she is in any way, shape, or form. But a few things in the interview reinforced what was said in my other articles and I want to share those.
Journalist Versus Expert
Here’s the quote that mirrored what we’ve already discussed:
When I first started doing this I was more of a journalist than an expert. Now I’m a little bit of both. I wasn’t doing all of the things that I was telling people to do and that felt really inauthentic and so I got with the program very quickly and started really walking-the-talk because if I was going to talk about it, then I was going to have to do it and understand that these things were—I understood why they were the right things to do, so it was taking another step to get myself to do
them.
First of all, it’s funny to me that she draws a distinction between a journalist and an expert. I think that’s exactly my point. 🙂
Second, when she started out she knew nothing about money. And yet she was reporting as a “financial expert.” Uh huh. This again is exactly my point!
The feelings are identical to what Mike Rowe said most journalists do — they try to create the illusion of competence. Why do they have to try and create the impression that they are competent in a given are? Because they don’t really have competence in what they are talking about — so they need to take shortcuts so it appears they are actually knowledgeable.
I’ll pause here for a minute and let that sink in. I’ll also note that if this is the way money advice is handled, think about all the other advice we get from journalist “experts” in a whole host of fields. It’s scary, really.
I’m not saying Jean did anything wrong. You couldn’t expect her to know anything when she started out because her degree was in ENGLISH. Again, exactly my point. No knowledge or experience with the topic and yet she’s an “expert.” Ugh.
Application of Principles
This lack of knowledge early in life doesn’t mean that she couldn’t learn and grow like the rest of us. Few wealthy people — for example, those who eventually retired early or became millionaires — are finance grads. Most majored in something else and had to learn about money along the way.
But even when she started reporting on money, it took her a long time to get her financial act together.
She says, “I’ve been doing this for 25 or 30 years” and yet admits, “When I got divorced about 12 years ago, I really felt like I was starting from ground-zero. I wasn’t really starting from ground-zero. I was probably starting from the 30-yard line but I had a long way to go.”
Ok, she got a divorce which can be a financial killer. But 12 years ago she was 40 years old and still “had a long way to go.” These are the sorts of results you’d expect from the average American, not from a “financial expert” who’s been held up as that for the past 25 to 30 years.
And let me say that she’s not just any financial journalist. She’s the cream of the crop — one of the best-known financial journalists in America today. Here are her accomplishments from Wikipedia:
Starting her career in 1986 at Working Woman, Chatzky rose from editorial assistant to assistant editor. In 1989 she left journalism and joined the equity research department of Dean Witter Reynolds, returning to journalism two years later as a reporter/researcher at Forbes. She moved to the Dow Jones/Hearst start-up SmartMoney in 1992, rising from staff writer to senior editor. After a five-year run, Chatzky joined Money Magazine in 1998.
Chatzky has appeared on Oprah, Live With Regis and Kelly, The View and other programs. She has written for Parents, Seventeen, Cosmopolitan, was a staff writer for SmartMoney and a fact checker for Forbes.
Chatzky is also the financial editor for NBC’s Today Show.
If she’s had such trouble for so long, imagine what the less-well-known and less successful financial journalists are like.
So What?
Again, this is not to criticize Jean. I’m simply re-telling her story using her words.
It illustrates that many (most?) of the people we see writing articles, talking on the radio, and appearing on TV discussing money have NO CLUE what they are actually saying. Their advice could be good or it could be bad. They do not know as they are NOT experts except in the area of journalism.
And as such, we all need to be very careful before we take advice from journalist “experts” or plan any action based on what they say.
BTW, the same holds true for many “financial advisors” as proven by my broke acquaintance who needed a job out of desperation and became a financial advisor. Double ugh.
And it goes for me as well. I hope you look at everything I write as my perspective and you’re using what I write, along with input from other sites, books, etc., to become your own financial expert. From there you can decide for yourself what money moves are best for you.
Finally, I’ll throw out the idea again of having financial experts publish their net worths with anything they write or present. I’m sure doing so would be oh so interesting. 😉
I couldn’t agree more! Great post! I hate to say it but this is exactly why I don’t read many personal finance blogs anymore….yours excluded, of course, ESI.
Great post. And I do often wonder just how well the person I am reading really has done in their own life.
I don’t listen to these guys, but, see them on Yahoo Finance occasionally. Has anyone taken the time to build a hypothetical portfolio of Jim Kramer’s stock picks or Tom Gardner’s (Motley Fool) stock picks and compared to see how they did over time vs an index? Just curious.
Ha! Here’s one article I found:
http://www.kiplinger.com/article/investing/T052-C007-S001-jim-cramer-s-stock-picks-stink.html
It’s rather funny, if you’ve read Cramer’s book, Confessions of a Street Addict (enjoyable read, btw), his wife bailed out his awful trades on multiple occasions. He is an awful trader, but would be a much better long term investor, unfortunately his show(s?) don’t allow that.
The internet these days is a bit cryptic in that it’s often difficult to understand whether a site or a specific person is actually legit. I think finding someone who has similar perspectives as you will make that person legit in your eyes. The problem with that in my mind is that just because someone agrees with you doesn’t mean they’re a quality source or have the experience or background to write on certain topics.
Any journalist that uses the nonsensical phrase “walking the talk” has already lost me before they even get to any other area in which they claim expertise.
Me too. Not an expert. Just some guy with a blog and a voice….if reading my words makes you think twice about your finances, then I have succeeded…expertly.
Interesting post. I don’t read too much of the mainstream financial media. When I do, I like to read Larry Swedroe, Jason Zweig, Allan Roth, and Jonathan Clements. There are others too that I enjoy. I like to read articles by authors who have been involved in the industry for a long time and don’t write fluffy articles.
Wow – thank you for taking this on. Yes, I’d love to see them publish their net worths, even if it’s just % growth or ballpark ranges…
Well, it’s like that for just about any journalist. Politics, sports, business, etc.
Also of note, the Gell-Mann Amnesia Effect (from Michael Criton):
Media carries with it a credibility that is totally undeserved. You have all experienced this, in what I call the Murray Gell-Mann Amnesia effect. (I refer to it by this name because I once discussed it with Murray Gell-Mann, and by dropping a famous name I imply greater importance to myself, and to the effect, than it would otherwise have.)
Briefly stated, the Gell-Mann Amnesia effect works as follows. You open the newspaper to an article on some subject you know well. In Murray’s case, physics. In mine, show business. You read the article and see the journalist has absolutely no understanding of either the facts or the issues. Often, the article is so wrong it actually presents the story backward–reversing cause and effect. I call these the “wet streets cause rain” stories. Paper’s full of them.
In any case, you read with exasperation or amusement the multiple errors in a story–and then turn the page to national or international affairs, and read with renewed interest as if the rest of the newspaper was somehow more accurate about far-off Palestine than it was about the story you just read. You turn the page, and forget what you know.
That is the Gell-Mann Amnesia effect. I’d point out it does not operate in other arenas of life. In ordinary life, if somebody consistently exaggerates or lies to you, you soon discount everything they say. In court, there is the legal doctrine of falsus in uno, falsus in omnibus, which means untruthful in one part, untruthful in all.
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What an awesome comment! After this I will now question (more than I do already) everything I read, see, etc., especially from the mainstream media.
I prefer to think of it as “Never let the facts get in the way of a good story.”
I read and buy an awful lot of books on a particular type of War Machine. Having nearly 25 years experience with one particular model I always turn to the pages on that model. If it is accurate I’ll consider buying it and hope the other models detailed have info as accurate. If out of date or full of typical nonsense that is constantly repeated in many other publications I’ll dump it back on the shelf. It is shocking what rubbish can be published. After a few years of studying Personal Finance I’ve just started reading ‘recommended’ publications and to be honest not been that impressed with a lot of it. In the UK we have a great Forum on a web site called Money Saving Expert. There are many knowledgeable people there ready to help whether its spotting scams or new tax rules. That is my preferred source of help.
Great post and absolutely correct. The same I think is implied with entertainment, you see a movie about something you are not an expert in and it seems very plausible and interesting, yet you then see a movie about an area of expertise and it is littered with errors and inaccuracies instantly you cant suspend belief its play acting.
I had the sad experience of witnessing a fatal car accident involving a teenage couple walking at night and a teenage driver where a teenage girl died. I read the newspaper’s account the next day. It was full of errors and worse, assumptions about the cause and the driver’s condition to the point it implied it was completely the teenage driver’s fault. I then heard through the grapevine the driver was being bullied at his high school about the accident, and the person who told me said she thought he deserved it because of what was in the paper and even when I told her what they stated was BS and I had been there she was less willing to believe me than the paper. Between that and watching a “journalist” spin a hobby shop opening into a “Dungeons and Dragons store opens, is this good for your children” style article where the hobby shop had one four by five wall rack of Dungeons and Dragons stuff for sale in a 15 by 30 showroom packed with comics, board games, card games, models, etc. I have done my best to take whatever they print with a huge grain of salt.
You can ask to CFPs what someone should do with their money and you’ll likely get two fairly divergent answers. “Experts” rarely agree completely with one another. Singling out journalists — who write more often and more publicly than most anyone else in the world by virtue of their profession — is easy, but it also puts more emphasis on their “expertise” than they would.
As a journalism major who spent over a decade in the business, I’ll offer up some defense here. Journalists are trained to quickly ascertain the lay of the land on a given story and summarize what that looks like at that point in time.
Over time, they do become experts on their particular beat in many ways, but usually in that they begin to better understand who to contact to get information and better story angles and questions to ask. A journalist covering economics will never become an economist, just as a journalist covering Major League Baseball will not become a ballplayer.
Journalists excel at taking a variety of complex factors and competing narratives and weaving that into a (hopefully) coherent story understandable by most people. Most journalists don’t consider themselves experts in the topic they cover; they consider themselves experts in gathering and synthesizing information in the topic they cover. The expertise rests with their sources.
As you said, it’s incumbent on the reader to decide how much they trust what they read. It’s not hard to find two bona fide experts in any field who have opposing opinions on any number of topics, especially in a soft field like personal finance. You have to take what you read or hear, weigh it against what you already know, reconcile it with your individual situation, and give it the proper consideration in that context.
“Journalists are trained to quickly ascertain the lay of the land on a given story and summarize what that looks like at that point in time.”
This is where it often goes wrong IMO.
In their attempt to do it “quickly” they form opinions, make conclusions, etc. that are expedient but often not accurate. Yes, it makes for a good story and hits a deadline, but it’s wrong, and then they’re off to the next topic/project/story.
I’ve seen this play out time and time again when trying to get a business story covered by the media (I worked in marketing for almost three decades). The reporter often had very little knowledge of how any business actually ran and didn’t want to spend any time understanding that or the issue at hand. He was more interested in finding a “hook” which would make a good “story” and thus developed his piece based on that — most often getting the basic facts of the issue incorrect.
The resulting articles were almost comical for their lack of accuracy, but as they say, “any publicity is good publicity” so we would roll with the punches and move on.
Good point. I was also a journalism major and most recently spent two years in the field. To your point, there is rarely enough time given to even try to become an “expert” in whatever is being reported with all of the required deadlines. Although I’ve also been told by educators that a colleague of mine often took information and misrepresented it. So glad to be out of the journalism field.
Yes, I think tight deadlines is certainly a contributing factors.
Let’s face it, these publications are businesses and there exist to make money. The less time spent on one story means you’re faster at getting started on the next. The system doesn’t allow them time to understand and learn any given topic in depth.
Wow. I didn’t realize that you had to be immediately perfect to give financial advice. I would rather get financial advice from someone who has lived life, made a few errors and learned from them. I would suggest that Money Magazine, SmartMoney and Forbes are well-credentialed publications that would hire smart, thoughtful people who also can write. Financial advice does not require a degree in financial planning (is there one?) or economics or…? I would argue that it’s important that one who gives advice can rely on expert resources and communicate that advice in a way that people can follow it. Of course, that’s my two cents, and I’m not perfect.
I think you made several of my points for me.
“I didn’t realize that you had to be immediately perfect to give financial advice.”
This is a straw man. No one said this.
“I would rather get financial advice from someone who has lived life, made a few errors and learned from them.”
I would too. That’s why I like to read blogs. They are written by real people going through real financial issues.
As I noted in the piece above, it’s EXACTLY the fact that she had no experience to begin with and yet was a “financial expert” on day one of reporting that got to me. She had not lived life. She had not yet made mistakes. She knew NOTHING about the subject. And yet she was an “expert”.
“I would suggest that Money Magazine, SmartMoney and Forbes are well-credentialed publications that would hire smart, thoughtful people who also can write.”
1. Have you read any of those publications recently? I have and much of their financial advice is either incorrect, written in a “let’s sell magazines” style of The National Enquirer, or written for such a basic reader that they’re almost useless to anyone with a basic amount of financial knowledge.
2. Yes, they are “well-credentialed publications.” By who? Journalists and other members of the media. so what?
3. “Hire smart, thoughtful people who also can write.” I’m not arguing that they aren’t smart. And I’m not arguing they aren’t good writers. In fact, that’s exactly what I’m saying they are good at — WRITING. You can be a great writer without knowing anything about your subject. You can write awesome pieces without any facts — or even made up facts. We call that fiction.
Once you become educated in finances for yourself you’ll be able to see how little these “experts” know and how their advice is often not only poor but also dangerous.
I rarely read main stream medial but like what Paul Merriman has to say. Then again I am certain there is bias since I tend to agree with what he says. Message is consistent and often repeated.
Jean Chatzky is really cute. She’s 5’7″, with a great smile and fun disposition. As ESI notes, she seems like a nice and friendly person. This all serves her very well when she appears on TV, her book covers, and the small headshot next to her columns. Women would like to be like her, and men would like to know a woman who looks like that and doesn’t mind talking about money.
Her first husband was/is a FinTech multi-millionaire, setting up trading and financial management systems. Her next husband is an executive in publishing.
My thought is that she really did feel like starting at Ground Zero (or 30%, whatever), because she never had to know about money or make money. Her lifestyle and finances have always been backstopped. Someone much smarter than me once said, “Beauty is Life’s Easy Pass”
I agree with your analysis. People need to have the dog and pony show factor and the people who are the best actors and conveyors of info-tain-ment are the ones heard. Even a lot of blogs offer very poor advice and you could see how got into trouble in the first place.
Wow. Kind of ad hominem to go after this one person. Is this the case of less classy behavior online than in real life? If she lived on your street, would this post be written the same way? Couldn’t have made the point without going after someone specific? I think it’s Buffett who says beware of people in money management who pretend to have never made mistakes (including big mistakes).
First of all, I did not talk about never making mistakes as the issue. That’s a straw man designed to make your specific point seem more valid.
Second, when anyone markets themselves as an “expert”, they are opening themselves up to commentary. Consider the other authors, media people, and so forth that get evaluated every day in this way. That’s part of the deal — if they are going to hold themselves out as someone people should listen to, then they need to back that up with results.
Third, I don’t think I was harsh. In fact, I tried not to be as I like her as a person. Whether I succeeded at that or not is in the eye of the beholder.
Could I simply have written this as hearing “a personal finance expert everyone knows” sort of piece? Of course. But then it would be vague and people would wonder (and ask) who it was anyway. And there’s nothing wrong with calling out a personality anyway (see point #2 again).
Thanks for your response. Realized we just don’t click at all in terms of communication style. So sincerely wishing you the best in your endeavors. And I mean that.
This is an excellent post, and you’ll find these “experts” in all fields. Personally, I’m educated and trained in Homeland Security (Master’s Degree and worked in the field) yet I’m continually horrified and frustrated to see the “experts” (i.e. journalists) speak about this subject as if they have any understanding of what’s going on in the world. The “expert” epidemic is real, and it’s everywhere.
Honestly, this is why I don’t read many magazines or articles from financial journalists. Sure, sometimes their information is entertaining and it’s not like I’ve never read any of Jean’s articles, for example, but I just don’t take serious advice from them.
I really do like following financial bloggers better, even if they’re not necessarily experts (in terms of being educated or having worked in the field), because 99% of the bloggers I follow either share their mistakes, lessons, and/or net worth, which makes me believe them a little more.
Again, not necessarily taking advice from all bloggers, but when the overwhelming evidence from many sources points in one direction (type of investing, etc.), then I pay more attention. But not just because some journalist told me to 🙂
ESI, really like your perspective on the ‘journalists’ leveraging their media platform as endorsement of ‘authority’ (people seem to get hung up on the ‘expert’ term, but I know what you mean and am not bogged down by semantics). Am reminded of a blog post you wrote awhile back, collecting these stories and examples. It was great, and I see you have added this post to the category.
https://esimoney.com/not-experts-financial-advisors/
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