- I used to regularly see the work of my favourite Moneyville writer (actually, my favourite Toronto Star journalist) Ellen Roseman. Her work has become a scarcity.
- The website pumps the housing market in Canada with a ridiculous amount of zeal. Sure, I don’t expect them to say the sky is falling, but balanced coverage would be appreciated. Fore example, this weekend’s article “Why the bidding war frenzy may be ending“, beyond its headline is blindly pro-bubble. Its reasons for why housing prices will surely remain buoyant include, “Interest rates remain at historic lows” (OK, what happens when they go up?), “Based on New York prices in general, the GTA is still a bargain.” (Canadians joke that Torontonians delusionally think they’re comparable to NYC, but this author actually makes a direct comparison between the Big Apple and the Crab Apple), and “Economists have been predicting doom and gloom in the GTA for the past twelve years. It still hasn’t happened.” (Such weasely language wouldn’t get past a Wikipedia editor — how does it end up in The Star?? Which economists? If you want to talk economics, let’s look at the numbers. Why is a drop impossible now, when price:income, debt:income, price:rent ratios and others are all at insane, unsustainable, never-before-seen high levels?). I get it. The banks, Realtors, and government are all huge Moneyville advertisers. He who pays the piper calls the tune.
- This is the biggie for why I’m bearish on Moneyville: the financial advice of two columnists in particular (Madhavi Acharya-Tom Yew and Krystal Yee) has devolved into disreputable junk.
I know, #3 is a pretty strong statement. But it’s true, and I’m not going to mince words. Here’s some examples of their seditiously money-stupid posts:
- Madhavi is (or was, per below) in tens of thousands of dollars of consumer debt. I can’t say with absolute certainty that it was the result of foolish spending or poor money management. But the fact is, she’s blown thousands of dollars frivolously. For example, she spent $850 on a mover when I moved a much further distance (and did only marginally more work than her, since she packed everything) for under $300. Oh yeah, and she moved 5 kilometers while I moved over a hundred clicks.
- Krystal blew $275 on a purse but justifies it as costing only $0.25 a day, using the same logic that makes Rent-to-Own furniture seem cheap. I’m not saying people can’t splurge. But she’s wallowing in debt at age 30 (yeah, a mortgage on an overpriced, maintenance fee-heavy townhouse counts as debt) and on a mid-life-crisis-esque romp in Euro-Utopia (presumably only second to her paradise home province of BC). She is a serial splurger. And she doesn’t even calculate the implicit interest cost in the article (what happened to empirical validity?? ARGH).
- To celebrate the fastening of a half million dollar mortgage around her neck, Madhavi decided to blow $4,400 on furniture and roll $3,800 of that into consumer debt. She’s confident that, after digging herself into yet more debt, she’ll suddenly have the discipline and additional cash flow to pay off this $3,800 in debt in just 18 months (before it balloons into a loan with a 20% interest rate). Sadly, she didn’t recognize that the $100 administration fee on the “no interest” loan was really interest in disguise. Nor did she recognize that, with cash in hand, she could have driven a much harder bargain at the furniture store. Oh, and that’s besides the fact that if she really needed the furniture, she should have bought used. She also adds: “We were glad that we choose this option when our dryer suddenly stopped working a few days after we bought the furniture.” Sounds like it’s back to Leon’s for Madhavi!
- Madhavi delivered her opus (or perhaps requiem) as a personal finance author: “Why 10% down on a $560,000 house was a good idea“. The author purchased an extremely expensive home in Scarborough (not the nice “end” of Toronto), taking on over $12,000 in additional CMHC fees. She only put 10% down, using the equity cashed out from her condo to pay off part of her consumer debts. The use of a lower-interest debt mortgage to pay off consumer debts is not, in itself, a bad choice. It is the chorus of bad choices that led up to it, and the future bad choices that are likely to occur (it’s par for the course). The scary question is – if she needed to use the cash from her condo to pay debts, and she has little else in the way of assets – what has she and her husband accomplished, money-wise, during their lives? They’re in their 30s – when does debt disappear and asset accumulation begin? When they’re 68 and their mortgage is paid-off? They’ve now got a house that, when all fixed expenses are tallied, costs at least $3200 a month. It’s my understanding that, as a couple, they don’t make an awful lot and a single job loss could result in significant financial challenges. Now they’re debt indentured for the next 30 years – assuming they don’t start cashing out equity (as they did before, and continued to do most recently with the furniture) to fuel their overspending.
- Not to be topped, Krystal rolled over $5,000 worth of CMHC fees into her mortgage because she only put 10% down on her house. Why? She had a $17,500 car loan. (Let me guess: she bought a brand new, overpriced import. Has anybody in BC ever considered buying domestic? Or are they too busy fawning over how wonderful their soggy province is?) Her car loan was financed at 0%. So she essentially rolled $17,500 worth of debt into her mortgage, to take on $5,000 in CMHC fees and to turn a 0% debt into a 3% or 4% or 5% mortgage. And Moneyville clearly used Krystal’s article as an attempt to quell the detractors who were challenging Madhavi’s original article. RAGEQUIT.
That’s all the examples for today, but I assure you that there are many others. The money decisions of these authors aren’t defensible. If you’re a post-modernist fool who thinks “Not everybody wants to make the same personal finance decisions as you Joe” then you are money-stupid. This is not about people thinking WWJWD (What Would Joe Wood Do?), it’s about using a modicum of common sense. The happenstance choices exhibited in the above articles are based on gut “feelings” at best and never use hard facts or empirical analysis. I can imagine these writers getting confirmation that their decisions are wise from commissioned “professionals” like mortgage brokers. Confident their stupidity will pass as reasonable journalism, they insert their misinformation into public discourse. Of course, their work is implicitly predicated on the expertise that you’d assume The Star would require its writers to have. Then, as soon as there’s any legitimate criticism of their tomfoolery, the authors and certain White Knight commenters argue the articles are impervious to correction because they’re just ‘personal stories’ or some other nonsense. Frankly, these ridiculous pieces should be retracted, with apologies from The Star. If their choices aren’t money-stupid, the only more logical explanation is that these two PerFi quacks are financial masochists who have branched into financial sadism.
People make poor choices all of the time. People can, and should, learn from their mistakes. It’s even better to learn from the mistakes of others before making them yourself. Money management mea culpas are thus extremely helpful. I’ve thankfully never experienced the crushing burden of debt. Because I watched Til Debt Do Us Part when I was in highschool, I understood the emotionally devastating impact of debt without needing to incur it. But these Moneyville articles pitch stupidity as wisdom.
Krystal and Madhavi: Canadians are already stupid enough with their money – they don’t need terrible advice to boot. Both of you are entitled to your own opinions, but you are not entitled to your own facts. If you are depicting past mistakes to help readers, then admit that your decisions were foolish. If you are, on the other hand, writing advice columns as seems to be the case, then you should attach a disclaimer. Editorial or not, the mere presentation of such irrefutably bad money management as a responsible way of life is egregiously disrespectful to readers insofar as it is potentially harmful. Your advice is incorrect, irrational, and potentially destructive. Please stop giving it.
Since I was drafting an article about personal finance journalism, I checked the Financial Post’s headlines on Sunday. Want to see the main page feature?
Sigh. Maybe Moneyville isn’t so bad after all…