Late last year, America’s second-largest pizza chain (Domino’s; Pizza Hut somehow remains the industry leader) announced an innovative new way to order pizza—the so-called “ZeroClick” app, which enables users to order a pie without a single click. Just open the app (you can even ask Siri to open it for you), wait for a 10-second countdown timer to expire, and a pre-loaded pizza order is automatically placed with your local Domino’s franchise. It’s “never been easier,” as they say, to have a pizza delivered to your home.
The “never been easier” theme seems to be an increasingly common one in our society, and for the most part, that’s a very good thing. It’s never been easier to file your taxes, to buy (or sell) a car, to manage your investments, to contribute to a retirement plan, to draft your own legal documents, to learn how to speak Spanish, or even to perform your own home surgeries. The internet era and its technological explosion have democratized the globe, making many inefficient industries irrelevant while putting more power in the hands of the consumer than ever before.
On the whole, this empowerment of the consumer is a very positive development; the removal of barriers to entry has to be viewed as a positive both to consumers and to most workers, as the elimination of middlemen is generally economically efficient and places downward pressure on the prices of goods and services (the Fed might see that as a bad thing, but most consumers would disagree). Of course, as we’ve learned from Spider-Man (or was it Voltaire?), with great power comes great responsibility.
Sure, we can order a pizza at the drop of a hat, but it’s now entirely up to us to recognize when we should or shouldn’t be inviting a 2,000-calorie pile of cheese, sauce, and bread into our house. And yes, we can open an eTrade account and invest our life’s savings however we want, but it’s now almost entirely up to us to determine how we should invest those savings (and also whether we’ve saved enough, or how much of it we can afford to spend each year once we’ve reached retirement).
In many (most?) cases, this newfound power is trivial and fundamentally unimportant, and we’re easily able to handle our newly acquired responsibility. Pizza is a fairly easy example; we’re either hungry, or we’re not. But in other cases, the equation isn’t so clear cut, and that can pose a potential problem. Because technology has enabled us to do so many things that previously required a middleman or a gatekeeper, it’s generally presumed that we want to do those things, that we should do those things, and that we can do them all on our own.
In many cases, these new, easier, empowering, methods of doing things make old business models unprofitable, meaning that even if we still want an extra level of guidance or support, it’s no longer available (think travel agents, for example, whose ranks have been thinned by more than 50% over the last decade; if you don’t like using Orbitz or Priceline, too bad).
Unfortunately, technological capability and individual know-how don’t always increase in lockstep with each other. Often, the newly acquired responsibility that we have as consumers can be intimidating, overwhelming, and anxiety-producing. It’s never been easier to do a million different individual things, and yet the cumulative responsibility that is heaped upon us as a result makes it nearly impossible to do all of them well.
In large part, I think that’s why the state of personal finance seems so dire, despite the fact that it has—in theory, at least—never been easier for most of us to manage our personal finances. Millennials, in particular, seem lost and confused on balance (yes, of course there are exceptions), paralyzed into inaction by a sea of too many options and alternatives. According to a recent study from PricewaterhouseCoopers, just 24% of millennials demonstrate basic financial literacy, and only 8% demonstrate high literacy; perhaps as a direct result, 42% reported using “alternative financial services” (pawn shops, payday loans, tax refund advances, etc.), almost all of which come with penalizingly high costs.
A generation ago, most of us did not have to worry about retirement savings, not to mention managing it alongside crushing student loan debt. Between employer-based pension plans and Social Security benefits, retirement savings was largely taken care of for us, without need for many (if any) decisions or ongoing maintenance. As the responsibility shifted from employer to employee, though, the level of guidance and support did not see a commensurate increase—if anything, it declined, meaning that even as we were being asked to do more, we were being given fewer resources to help us accomplish those tasks.
Frankly, that’s why resources like Seeking Alpha and Investopedia are so important. Not only are a legion of do-it-yourself investors and savers now able to convene in one place to bounce ideas off of each other, but they’re also able to interact with professional advisors who have the benefit of years of experience and the accumulated knowledge acquired from having served dozens of clients over the years (all of them with unique issues, different interactions of variables, and varied desires and goals).
In the past year since I began cross-publishing content at Seeking Alpha, I’ve noticed spurts of animosity between the “advisors” and the “investors” in the community, and I think that’s a shame. In a world of increasing personal responsibility, educational outlets and forums are of vital importance. Granted, the financial industry has done little to engender goodwill and trust among consumers in recent decades (the never-ending fight against the recent DOL fiduciary rule, watered down as it is, demonstrates just how little many financial firms seem to care about their clients’ best interests), so the distrust on the part of the investor class is warranted and justified. Still, in self-selecting forums, it seems misplaced to constantly question the motives of those who choose to contribute and post content.
For the most part, all of us face similar challenges and share similar goals: we want to make better financial decisions for ourselves, for our clients, for our families, and for our friends. We all live in the same society, so we all benefit from a well-educated populace—the more everyone knows about financial topics and investing matters, the better it is for all of us. Personal finance is not a zero-sum game, no matter what Gordon Gekko might once have told us. Consumers are more powerful today than ever, but that doesn’t mean they can’t use a little bit of helpful guidance now and again.