Money Obedience

How tired am I of hearing some version of “Every time Obama opens his mouth, the market tanks”? Who really thinks that money moves according to superstition? Well, actually, a lot of people think so. My people are Caribbean people. Can you imagine how many money and personal finance superstitions I’ve learned in my lifetime?

Well, there’s the one about not whistling. Whistling is bad luck, or so my father always warned me. I later learned that those who believe in Santería think that loud enough unnecessary noises mean Elegua may show up (noises like whistling and banging your cooking spoon on your pot will call him) and when Elegua the Trickster arrives he always brings a surprise. The problem with him is that you might not at all like what he brings! Maybe he brings you a bill larger than expected, or a fender bender that costs you money you didn’t anticipate having to spend.

Have you heard of the one where you can’t sew on a button while you’re wearing the garment you’re repairing? Got that one from my mother. Doing this no-no is sure to bring you bad money luck, because you’re telling the spirits that you only need that shirt currently on your back. There’s a way around this one, though – put a coin in your mouth as you’re sewing.

Here’s one that I, for the life of me, have trouble ignoring. It’s the admonition not to put your purse on the floor; your briefcase fits the bill too, if you keep your wallet in it. Why? The evil spirits will just reach up from Hades through the earth and right into your stash of cash. You must keep your bag off the floor if you’re interested in keeping close the money you have.

Okay, if you’re scoffing at the idea of investing in money superstitions (pun intended), how about these? “The market does better under Republican administrations” Heard that one? Well, that little “fact” has not been the case since World War II! “Investing with the right manager can make money.” The truth is that two thirds of money managers under perform, and even if they do not under perfom once or twice hardly anyone has ever consistently out-perform the benchmark index. How about this one, which in this day and age speaks for itself? “You can never lose money by investing in real estate!”

So, the recently created mythological relationship between Obama’s speeches and the stock market performance is probably not true. It’s kind of like this one that I learned about in my first statistics class. It’s true that when ice cream sales increase, so do rapes. But can we say that ice cream consumption causes rape? Sounds a bit ridiculous, don’tcha think? Just because things happen together has nothing to do with whether one makes the other happen. Maybe Obama is speaking often because as the new President he needs to make the effort to reassure folks, and maybe reassurance is necessary because the market is tanking – but it’s not that one causes the other!

There’s only one thing that makes money disappear or grow, and that’s how we manage it. Manage your money well, and you’ll be in good stead in the future. (Just in case, though, I’ll still keep my purse off the floor.)