‘How are you ****ing us?’ and other critical lessons from The Big Short; my new job with Acorns / Grow

I’m happy to announce that I’ve joined a great new personal finance site called Grow as a contributor. Led by Jennifer Barrett, who until recently was editing my CNBC.com stories, Grow is a part of the Acorns app.  Acorns is one of the clever new finance startups generally called “FinTech.”  If you haven’t heard of that, FINancial TECHnology companies are an outgrowth of a lot of the behavioral economics research I find fascinating.  Can we make it easier for people to make more rational money decisions?  Can we nudge them to save more money and spend more wisely through subtle changes like software design or product placement?

Acorns gets a lot of attention because Ashton Kutcher was an early investor.  (No, I haven’t met him, but Jennifer has. You can see that story on the Grow site). The app links to your financial accounts and makes it easy to sweep up loose change from every transaction and automatically invest it.  It’s for everyone, but definitely aimed at the younger crowd who might not otherwise invest anything. The app does some cool things to show you acorns can grow into trees – one chart shows how just $10 can turn into more than $2,000 in 10 years, for example. There are pluses and minuses to using an app like Acorns, and it costs at least $1 a month, but anything that gets young people to dip their toes into the personal finance pool is a good thing.  Acorns says it has more than a million users already.

If you’d like to try Acorns, use my referral code by clicking on this link and you’ll get a $5 bonus deposited into your account. BIG DISCLOSURE: I will get $5 also if you use my referral code.   (For a roundup of FinTech apps you might consider trying, read this US News story.)

The bigger disclosure is that Acorns will be paying me to write for its independent financial journalism news and advice site, Grow.  I’ll be taking on the same topics I do here: The truth behind Wall Street, how to avoid ripoffs, how to make the most of big life moments like buying a home, getting a job, getting married, getting divorced — or at least how to avoid the pitfalls and gotchas in those critical times. Most of all, I’ll be sticking up for you and helping you stick up for yourself.

I can’t tell you how thrilled I am to be able to dip my toes in FinTech, to perhaps be part of the solution rather than just a critic, and to have the opportunity to do this courtesy of Jennifer. All while simply doing what I do. I’m very lucky.

Today’s Grow story is about the movie The Big Short. I think it’s everyone’s patriotic (and financial) duty to see the movie. Of course, it’s a two-hour film, and it can’t explain everything about the housing bubble and the economic meltdown in the last decade. But it hits the right notes on so many issues. It should scare the heck out of you, particularly with some folks predicting we are headed back down that path (Rocket Mortgages, anyone?). It should make you read Michael Lewis’ book The Big Short: Inside the Doomsday Machine, which of course goes into more detail about what went wrong and why.

But for you, I’ve boiled the film down into 7 lessons you can apply right now to your personal financial life.  Here’s a taste of that story, but you should go read the rest of at on Grow’s site. 

The Big Short” has done something a lot of personal finance writers haven’t been able to do for years: Make the economic collapse entertaining! Heck, it even makes subprime loans sexy by having actress Margot Robbie explain them while taking a bubble bath. The movie deserves the Oscar nominations it will probably get this week.

You’ll laugh until you cry while watching the film, but you don’t want to miss the sober money lessons it offers. Here are seven important takeaways.

1. Be very careful about who you trust with your money.

People who take charge of their lives in so many other ways often cede control to others when it comes to money. That’s not necessary and can be a disaster (ahem, Madoff). Even if you hire an advisor, stay involved in the decision making and on top of the numbers….

2. Ask what’s in it for your advisor.

Car salesmen may offer advice on different models, but, ultimately, they’re trying to sell a car. Financial advice can often work the same way. Someone who gets paid when you buy specific funds or complicated financial products is, ultimately, a salesperson.In a telling scene, Ryan Gosling’s character demands to know “How are you f***ing us?” before his firm will agree to an investment. It’s a great question consumers should ask before they give their money to someone. (“What do you get out of this?” is a more elegant way to ask it.) …

3. If you don’t understand it, it’s not for you.

Who cares if you don’t know what a credit default swap is? It’s just insurance, but that’s not the point. Complicated terms may be created—or thrown into conversations—by financial folks in part to make you feel inadequate so you stop asking questions and think only they can take care of your money…

Read the full list at Grow now. 

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