Humor can be a great teacher. The reason is that for comedy to work it has to be built on a foundation of truth. One of my favorite comedians, Steven Wright, said, “What I like about the jokes, to me it’s a lot of logic, no matter how crazy they are. It has to make absolute sense, or it won’t be funny.”
With that in mind here are fifteen of my favorite humorous money quotes. They are funny, sure, but they also allow us to see important financial principles from a new perspective:
(1) Financial Wedgies: “Any financial expert will tell you that keeping a balance on a credit card is the worst financial move you can make. The only thing worse is paying a financial planner to tell you not to keep a balance on your credit card. That’s like giving yourself a wedgie and then paying someone to tell you it was a bad idea.” – Scott Adams, cartoonist & author (creator of the “Dilbert” comic strip)
When legendary investor Warren Buffett was given the chance to speak to high school students in his hometown of Omaha, Nebraska he offered only one piece of financial advice before taking questions. Did Buffett give the students a great investing tip? No! He simply instructed the students, “Avoid credit cards. Just forget about them.” This is great advice from Buffett and following it will ensure that you never give yourself a financial wedgie.
(2) Unwanted Attention: “If you think nobody cares about you, try missing a couple of payments.” – Steven Wright, comedian
Do you want more attention? More mail and phone calls? Just get into debt that you can’t pay and you will find yourself very popular in no time at all. Unfortunately this is also the recipe for stress, misery, and unhappiness.
(3) Automobile Visitation: “Drive-in banks were established so most of the cars today could see their real owners.” – Joseph Cossman, businessman
Cars lose value faster than any other major purchase, and thus destroy more middle-class wealth than anything else. Limiting the amount you spend on cars will give you surplus to use acquiring assets that increase in value. So how much should you spend on cars? Dave Ramsey’s rule is “The value of all your cars should be less than half your annual income.”
Further Reading: Cars are the Great Middle-Class Wealth Destroyer
(4) Why Did You Have to Go and Make Things So Complicated?: “The tax code is 10 times longer than the Bible, without the good news.” – David Camp, US Congressman from Michigan
“The hardest thing in the world to understand is the income tax.” – Albert Einstein, scientist
As a CPA in the middle of another tax season I am not sure if I find these quotes offensive or funny. Either way I can relate. The US tax code is a complicated, unwieldy mess. However, it is important both legally and financially that you get your taxes right.
Don’t do your own taxes unless you are confident you understand the applicable parts of the tax code. If you pay someone to do your taxes find someone you are confident in and trust. Taxes are an important part of your overall financial picture and you must spend the necessary time and resources to comply with the law without paying more than you are obligated to.
(5) Don’t Let the Tax Tail Wag the Financial Dog: “You don’t get rich spending a dollar to save 30 cents.” – Patrick Killilea, real estate expert
Managing your finances to minimize taxes is not always the best move. If buying a house makes sense in your circumstances, do it. If you own a house you should definitely deduct the mortgage interest. However, you shouldn’t buy a house just for the mortgage interest deduction. Paying $1 of mortgage interest solely to save 25 or 30 cents on taxes is not a prudent plan.
(6) Parenthood and Finances: “A father is a fellow who has replaced the money in his wallet with pictures of his children.” – Anonymous
True, and worth every penny. If you are a parent things will probably be tight financially for a while. Being a parent makes it even more important for you to get your financial house in order. Do whatever is necessary to make it work.
A couple of months ago my wife and I became grandparents for the first time with the birth of our grandson, Ashton. Grandchildren are even better than children. Not nearly as expensive and even more fun. We are loving this new grandparent job.
(7) Investing or Gambling?: “There are two times in a man’s life when he shouldn’t speculate: when he can’t afford it and when he can.” – Mark Twain, author and humorist
Get rich quick schemes usually end in disaster. Conversely, long-term investing in the future economy of our country and the world has proved to be nearly universally profitable. The best way to do this is through low-cost index mutual funds or ETFs. Investing in this manner is not speculating and might even meet Mr. Twain’s approval.
Further Reading: When it Comes to Investing, I’m a Boglehead
(8) Predictions are Hard, Especially about the Future: “I’d compare stock pickers to astrologers, but I don’t want to badmouth astrologers.” – Eugene Fama, Nobel winning economist
“Believing in the ability of market timers is the equivalent of believing astrologers can predict the future.” – Larry Swedroe, financial advisor and author
Managers of actively managed funds (stock pickers and market timers) don’t have a stellar record of beating index funds. Over time most of them have failed to keep up with appropriate benchmarks. This shouldn’t be surprising as the future has always been difficult to predict. This is yet another argument for investing regularly in low-cost, passively managed index funds. One of the reasons this simple strategy has proved so successful is that it eliminates the need to predict the future.
Further Reading: You Can’t Beat the Market
(9) Investment Costs Matter: “I helped put two children through Harvard – my broker’s children.” – Michael LeBoeuf, management professor and author
Morningstar, after exhaustive research on mutual funds, reported “The expense ratio is the only reliable predictor of future mutual fund performance.” This shouldn’t be surprising. The less you pay others to manage your money, the more you keep for yourself. As John Bogle said, when it comes to investing “you don’t get what you pay for. You get precisely what you don’t pay for.”
Index funds and ETFs are the lowest cost investment options available and their low costs are the major reason they have been so successful. Employing a simple strategy of regularly investing in index funds will allow you to put your own children through college, not your brokers’ children.
(10) Money and Happiness: “Trying to be happy by accumulating possessions is like trying to satisfy hunger by taping sandwiches all over your body.” – George Carlin, comedian
The evidence is in, and it is overwhelming. Buying “shiny objects” does not make us happy. Happiness has to come from within.
However, happiness is not totally unrelated to money. Making enough for our basic needs is important in determining happiness. After that spending money on experiences, building relationships, and helping others are much more likely to increase happiness than collecting material possessions.
Further Reading: Can Money Buy Happiness?
(11) Having it All: “You can’t have everything. Where would you put it? – Steven Wright, comedian
Once we understand this – truly understand and accept it – we are on the road to financial security and happiness. No matter what your income is you can’t have everything you want. None of us have the money, time, or space to make that happen. When we accept that life is about choices and priorities we can start to put together a plan, based on the resources we do have, to maximize our happiness. On the other hand, focusing on what we don’t or can’t have is the perfect recipe for misery.
(12) Too Much Free Time: “The trouble with retirement is that you never get a day off.” – Abe Lemons, college basketball coach
Doing nothing gets old in a hurry. As part of your retirement planning, plan what activities you are going to do give your life variety and meaning. If you don’t you will likely be disappointed with retirement no matter how much money you have saved.
(13) Unprepared for Retirement: “If we take a late retirement and early death, we’ll just squeak by.” – Cartoon caption in The New Yorker magazine
“I have enough money to last the rest of my life…unless I buy something.” – Jackie Mason, comedian and actor
Funny one-liners. Miserable in real life. Plan now to prevent these quotes from representing your future reality.
Further Reading: How Much Do You Need to Save for Retirement
(14) Inflation Reminders: “Americans are getting stronger. Twenty years ago, it took two people to carry ten dollars’ worth of groceries. Today, a five-year-old can do it.” – Henny Youngman, comedian
“Inflation is when you pay fifteen dollars for the ten-dollar haircut you used to get for five dollars when you had hair.” – Sam Ewing, writer and humorist
Inflation has been low in recent years. However, with many retirements lasting 30+ years inflation can be a big problem even at today’s low rates.
In fact, retirement expert Moshe Milevsky believes low inflation can be especially insidious because it lulls us into a false sense of complacency. Milevsky writes, “I believe that the relatively low inflation rates we have experienced in the last quarter century might actually be just as dangerous as the hyperinflation rates I grew up with in Latin America. This is because low numbers can be easily ignored. Yet over long horizons they can be just as deadly.”
Add to this the fact there is no guarantee inflation will remain low in the future and it becomes clear that everyone preparing for retirement must consider inflation in their plan. Social Security is indexed to inflation, which gives everyone some protection. However, you also need a plan to protect the part of your income not covered by Social Security from losing its purchasing power over time.
(15) Offspring Revenge: “Be kind to your children. After all, they are going to choose your nursing home.” – Steven Wright, comedian
You should also have enough saved so they can afford to put you somewhere decent without it being a burden on them. Making your wishes known in advance, before it gets to the point where you can’t make the decision, is another good idea.
The preceding quotes both tickle and enlighten. I hope you enjoyed them and learned something that will help you in your journey to re-write your own financial story.
If you have any favorite “Money Funnies” that I missed please share.