πŸ™ˆ You don’t want to know

Published On: October 7th, 2022

Hey Guys,

Out of sight out of mind, right? We humans have a tendency to avoid (or ignore) uncomfortable information. Maybe it’s a stack of bills, medical information, or even the calorie count on a favorite food. There’s science behind “ignorance is bliss”, but yeah, it’s better to face the music.

Let’s talk about why we don’t want to know.

⏰ Today’s newsletter is 952 words, 5 minutes.

1 big thing: Buried in the sand

πŸ“¦ It was all in the shoebox. Every utility bill, credit card statement, and government tax document. All in unopened envelopes and hidden in a size 8 running shoe box. It was my job to wield the envelope opener and crack open the lid. Instead of dealing with her financial situation head on, Pandora, not her real name, was paralyzed with fear and chose to bury it in cardboard.

πŸ’° What’s going on? No one likes unpleasant news, but many human-being types of people prefer to avoid information at all costs. Personal finance is a popular space to evade ’cause getting behind on payments and seeing the interest accrue is not a grin and bear it situation for many. Duck and cover is more like it.

  • Enter our fine feathered friend, The Ostrich Effect.

🦩 How does it work? The Ostrich Effect lives large by helping us hide away. Instead of dealing with an issue, we bury our heads in the sand like ostriches to avoid negative information, including feedback that could help us achieve our financial goals.

πŸ™€ Why it matters: We can’t handle the truth! Avoidance often makes the situation worse since we incur otherwise avoidable costs had we faced the fear at first glance. A situation is “ostrichy” when reality exists, but we refuse to accept it.

  • I don’t know why they (the scientists) call it the “Ostrich Effect”. I live by an ostrich farm and NOT ONCE have I seen a bird bury its head in the sand. If avoidance is key, I prefer to steer clear of these feathered creatures because they are terrifying.

πŸ’ͺ How to deal: Facing your inner ostrich is key. Ask yourself why you’re avoiding this information, find sources or people who could help you make a decision, and know that dealing with it sooner helps you benefit before things get worse.

πŸ’› Bottom Line: Asking for help is allowed, OK? I was thrilled to help a friend open her shoebox of hidden realities. Sometimes a little nudge is all we need.

2. 🏠 Can’t ignore the housing crisis

πŸ₯‘ It’s not about lattes and avocado toast. The financial obstacles facing Millennials and GenZ are nothing compared to previous generations.

What’s going on: Earning a steady paycheque isn’t the issue. “Even with a good, full-time job, people in their 20s and 30s face stratospheric home valuations and soaring rents beyond what most of them can afford on their own.” (Globe, Twitter)

🀿 Deep Dive: Personal Finance Reporter Erica Alini hit a home run with her deep dive into the housing and rental crisis for the post-GenX generations. Her front page story “Starting out as a young adult is incredibly expensive in 2022. We crunched the numbers” gives a realistic view of how much it costs young adults to live on their own, pay down student debt, and save for a home.

Reality Check: Check out my interview with Erica on The Cash and Kerry Podcast where she breaks down How to buy a home in a competitive housing market (and should you?) This is a super fun episode with a lot of actionable advice.

πŸš€ Not isolated: This story goes beyond the land of Canucks. Housing availability, skyrocketing housing costs and rents heading nowhere but UP are affecting people of all ages and life stages around the world.

3. 🌎 Around the world

πŸ€“ The housing mess explained (CNN)

πŸ‡ΊπŸ‡Έ Housing shortage not just a coastal crisis (NY Times)

πŸ‡¬πŸ‡§ How did owning a home become unaffordable? (The Guardian)

πŸ‡―πŸ‡΅ Has Tokyo found the solution to soaring housing? (Vox)

4. πŸ“Š Charted: Falling savings rates

Remember those pandemic savings we apparently banked thanks to being stuck at home? Yeah, neither do I.

β˜”οΈ What’s going on: There’s skyrocketing interest rates, more rocketing with high inflation, declining asset values, and challenging housing markets – these have all led to a “perfect storm” crushing our savings. If you had a cushion, it’s likely less cushiony.

“On average, regardless of a household’s demographic or economic characteristic, gains in household wealth acquired over the previous year have been erased.” – Statistics Canada

The take: Reductions in net worth occurred across each age group, but younger households saw their net worth decrease at the fastest pace.

“The average wealth of the youngest age group (less than 35 years) reached $309,759, down $27,748 (-8.2%) from the first quarter. Similarly, average wealth for households aged 35 to 44 years was $618,164, down $55,129 (-8.2%).

πŸ›  Bottom line: We’re feeling under pressure from economic pressures. This is where I want to fix everything but the best I can do is admit (with my head well above the sand) there’s no quick fix. I can write about cutting costs but I know you’re doing your best. Hugs.

5. ⏳ One more unavoidable reality

πŸ“š If you read one thing today: After learning of his terminal cancer diagnosis, Jack Thomas, a journalist for more than 60 years, wrote this incredibly moving essay where he asks all the questions. “I just wish I could stay a little longer.”

β€œHow does a person live with the knowledge that the end is coming? How would I tell family and friends? Would I be depressed? Is there an afterlife? How do you get ready for death, anyhow?”

We all live with uncertainty, but few of us have to face death with a specific timeline. In this deeply personal story Thomas shares his loves, regrets, and his grief. There’s a lot to learn from these pointedly written paragraphs.

πŸ’› A truth: It’s the little things in life that turn out to be the biggest.

As always,

❀️ Love love love,

Kerry

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