Stupid Smart People

Note: A version of this post appeared in the San Antonio Express News


My wife and I headed East on I-10 recently to visit our New York City friends Jay and Nina – another married couple and their kids – who now live in Houston.

The conversation over the weekend turned toward their personal finances and Jay began calling himself a ‘stupid smart person’ when it comes to the world of finance and their own personal financial situation. I really like that phrase.

Educational background

As they approach their 40s, they’ve realized they had no idea where to even begin.  While they have now begun to learn, they mostly recounted to me just how unaware and mistake-prone they had been, until very recently.

Jay calling himself ‘stupid’ needs some explanation, as his self-deprecation should only be understood ironically.

Jay and Nina both graduated from Harvard College, then Columbia and NYU medical schools, and finally Columbia Medical residency programs.

They continued training as cancer specialists at MD Anderson Medical Center in Houston – one of the most educationally advanced institutions on this, or any other, planet.

Between them they share three Ivy League degrees, as well as approximately 20 years of specialized education, after college.

I would expect they have enough higher learning to earn an invitation to the Jedi Council by now, so how can my smart Houston friends be – by their own description – stupid?

Clearly, they are not.


But if even they don’t get it…

You might be thinking that if even my friends Jay and Nina don’t feel confident about understanding their personal finances, how does anybody else even have a fighting chance?

I’ve known far more people uncertain about their personal financial situation than I’ve known people who feel totally confident that they can handle their own money.

I’m describing my friends’ specific situation not to pick on them. They’re on the right track now. I’m bringing this up because I hope their situation gives everyone permission to do two things.

First, it’s ok to feel like you do not know enough about your personal financial situation – even my Jedi Council friends felt clueless.

Second, it’s ok to begin the process of self-education about your finances at any time, even long after you’ve become an expert in your own profession. It’s not too late. Even for you.

What is it about money and finance that stumps even the most brilliant among us?

I don’t know yet. I’m still trying to figure this out.

This is one of life’s great mysteries. Just like why C3PO never said anything to Luke about his father, since the droid was created by him? Seriously what’s up with that?

In honor of my team making the Super Bowl, I decided to put up a picture of Coach Belichick
In honor of my team making the Super Bowl, I decided to put up a picture of Coach Belichick

The Finance Industry, like a Sith, wants you in the Dark

My answer about money so far comes from my Wall Street experience: The finance industry – taken as a whole – has a vested interest in making financial services seem as complicated and opaque as possible.

The more specialized and mysterious we can make it all seem, the thinking goes, the more we can charge extraordinary fees for very ordinary services.

I think we fear that simple financial solutions would lead to lower fees, and I’m sorry to say but lower fees are just not getting me the Mazarati Quattroporte I’ve always wanted.

Landspeeders on Tatooine don’t come cheap either.


Simple beats complicated

So what is a stupid smart person to do?

Start with the following true (ok, more like “truthy”) statistic:

In 98.75 percent of all financial situations simple beats complicated 100% of the time.

Got it?

How do you increase your chances of choosing “simple” over “complicated?”


Keep it simple, even for Jedis

Embrace your identity as a stupid smart person.

For example, only make investment choices that you – a stupid smart person – actually, fully, deeply, simply, understand.

Here’s a good test: Could you, personally, explain your financial and investment decisions to a fifth grader?

If your insurance salesman cannot tell you precisely, in language even you can understand, how that whole life policy or variable annuity is a better deal than just taking the money and putting it into a retirement plan and thereby ‘self-insuring’ – and believe me he can’t, because it isn’t – then you don’t need that particular type of insurance product.

If your mortgage broker cannot explain exactly how that interest-only, variable-interest reset loan to LIBOR + 8% in three years is a good option for you – and believe me he can’t, because it isn’t – then you need a simpler mortgage.

None of us need a stack of Ivy League degrees to get a grip on our finances. And even having the degrees does not ensure financial sophistication. So just forget the sophistication part and concentrate instead on doing only what you can understand, and then work to understand what you’re doing.

I get it that encouraging you to be a stupid smart person may leave you feeling confused: I’ve told you what not to do, but not yet what you should do.

Patience, my Padawan learner, patience.

It’s amazing the awesome things you find when you Google Image “Padawan Learner”

Early still it is.



Please see related posts:

Use Jedi mind tricks to save money

Go for simple over complicated with retirement plans

Book Review: Simple Wealth, Inevitable Wealth by Nick Murray




Post read (3973) times.

5 Replies to “Stupid Smart People”

  1. Saw your website for first time today and signed up for your nwsltr. I started watching Spurs 5 yrs ago and now think I’ve learned a little about coaching (Pop) and team basketball. I’m hoping it might work out the same for ur nwsltr. The articles I’ve read so far lean toward pre-retirees, but soon I will send u a question about us old retired folks.

  2. While the information at the root of your article is useful, you’re not doing a very good job of connecting with your audience. The way in which you equate Ivy League and white collar professional with “smart” sort of ruined the taste of the meal for me, and my guess is lots of others in San Antonio might feel the same way. A lot of people I know who went to Harvard remember it as the most stressful, unpleasant, and least satisfying time of their lives- the kind of place that creates life long neuroses. Many are still in traumatized from the experience, years later. What’s smart about choosing to pay six figures for that sort of suffering? (imagine if your friend had invested that money in an index fund and gone to a quality state school instead!). It’s funny to imagine someone with the culturally elite tendencies you display in this piece actually living happily here in San Antonio. It must be hard being around so many people who don’t measure up as “smart” to you. I really sense your deep seated sense of superiority over all of us simpletons who didn’t have the benefit of 4 years at Yale, and that makes it a bit hard to connect with you as an expert. I like what you’re trying to do here, but I think you have a ways to go until you understand why you’re own views of smart and intelligent are a bit out of whack with your community.

  3. You really make it seem really easy together with your presentation however I find this topic to be actually one thing which I believe I might by
    no means understand. It sort of feels too complex and extremely huge for me.
    I’m having a look forward in your subsequent submit, I’ll try to get the grasp of it!

Leave a Reply

Your email address will not be published. Required fields are marked *

Please Complete * Time limit is exhausted. Please reload CAPTCHA.

Public Speaking


I founded Bankers Anonymous because, as a recovering banker, I believe that the gap between the financial world as I know it and the public discourse about finance is more than just a problem for a family trying to balance their checkbook, or politicians trying to score points over next year’s budget – it is a weakness of our civil society. For reals. It’s also really fun for me.

Michael C Taylor's books on Goodreads


The Financial Rules for New College Graduates: Invest Before Paying Off Debt--And Other Tips Your Professors Didn't Teach You


Most Viewed Posts