Somehow this passage from John Kenneth Galbraith’s A Short History of Financial Euphoria seems apt in the moment:
Contributing to and supporting this euphoria are two further factors little noticed in our time or in past times. The first is the extreme brevity of the financial memory. In consequence, financial disaster is quickly forgotten. In further consequence, when the same or closely similar circumstances occur again, sometimes in only a few years, they are hailed by a new, often youthful, and always supremely self-confident generation as a brilliantly innovative discovery in the financial and larger economic world. There can be few fields of human endeavor in which history counts so little as in the world of finance. Past experience, to the extent that it is part of memory at all, is dismissed as the primitive refuge of those who do not have the insight to appreciate the incredible wonders of the present.
The second factor contributing to speculative euphoria and programmed collapse is the specious association of money and intelligence. Mention of this is not a formula for eliciting reputable applause, but, alas, it must be accepted, for acceptance is also highly useful, a major protection against personal or institutional disaster.
This article is not exactly personal finance. But somehow this is one passage that is stuck in my head ever since I read it. You might consider it cliched, but it’s true nonetheless. How we handle our personal finance has to do so much with our experiences and I think we don’t nearly pay enough attention to that aspect.
Money is a story. Your story is probably different from everyone else’s. Our relationship with debt, savings and earning money is extraordinarily complex. Consumer credit has turned from a convenience and useful bridge into, for many people, a trap.Seth Godin
Personal finance is one of the few industries where you can look successful without knowing what you are talking about. You can be rich and not know a thing about money management. However, this isn’t true in most other areas of life.Nick Maggiulli
The traditional methods of coping with longevity, like relying on your own savings or relying on family, don’t always work that well anymore.Olivia S. Mitchell