The Dumb Things Smart People Do With Their Money by Jill Schlesinger

The Dumb Things Smart People Do With Their Money: Thirteen Ways To Right Your Financial Wrongs by Jill Schlesinger is a personal finance book published in 2019.

Smart individuals often make poor financial decisions due to a fear of appearing foolish in areas they lack expertise. This fear leads many to avoid seeking advice, resulting in costly mistakes. A few examples Schlesinger encountered:

Small Business Owner: Earned $300k+/year but resisted buying disability insurance (for $8k/year). Three years later, he was diagnosed with multiple sclerosis, leading to a 75% income drop and depleting his $500k retirement savings
Engineer: Had $1.2 million invested but kept 90% in company stock, avoiding diversification. After the dot-com bubble burst, his portfolio fell to under $400k, forcing him to work 10 more years before retiring at 68
Doctor: Refused to create a will or trust. Upon death, his children faced a $1 million+ estate tax bill, forcing them to sell the family home

Even without a financial disaster, you may be wasting money, missing opportunities, or creating unnecessary emotional strain for yourself and your loved ones.

Purchase the book by clicking this link!

Enjoy!

#1 – You Buy Financial Products That You Don’t Understand
#2 — You Take Financial Advice From The Wrong People
#3 — You Make Money More Important Than It Is
#4 – You Take On Too Much College Debt
#5 — You Buy A House When You Should Rent
#6 — You Take On Too Much Risk
#7 — You Fail To Protect Your Identity
#8 — You Indulge Yourself Too Much During Your Early Retirement Years
#9 — You Saddle Your Kids With Your Own Money Issues
#10 — You Don’t Plan For The Care Of Your Aging Parents
#11 — You Buy The Wrong Kinds Of Insurance, Or None At All
#12 — You Don’t Have A Will
#13 — You Try To Time The Market

#1 – You Buy Financial Products That You Don’t Understand

People often research meals more than the financial products that shape their future
Commonly misunderstood products:
- Physical Gold
- Hedge Funds
- Reverse Mortgages
Key takeaway:
- Be actively involved — research thoroughly and ask questions
- Treat financial decisions with the same care as other major purchases

#2 — You Take Financial Advice From The Wrong People

Most professionals aren’t legally required to act in your best interest
- Don’t hesitate to ask questions – a good advisor will welcome them
- If you’re not paying for advice, you’re likely taking advice from yourself – often a bad idea
Emotions like fear or pride stop people from seeking help
- Don’t make excuses – even confident DIYers can benefit from a professional
- You’d pay someone to clean your house; why not pay for expert financial guidance?
- How I Invest My Money: Many financial pros still hire advisors themselves

#3 — You Make Money More Important Than It Is

Overvaluing money causes financial and emotional distress
Tips to improve financial mindset:
- Reflect and challenge assumptions behind your habits
- Don’t tie self-worth to financial status
- Focus on how money supports your happiest lifestyle
Warning signs of money-related stress:
- Keeping money secrets or losing sleep over finances
- Perfectionism, obsessive tracking, or constant goal shifting
- Difficulty spending even when stable

#4 – You Take On Too Much College Debt

Student Loan Realities:
- 40% are behind or in default
- 80% report “very significant stress”
- Loans limit life choices: career, home-buying, family, retirement
Shift your mindset
- See college as a business decision, not a rite of passage
- Overcome emotional thinking and focus on ROI
For Parents:
- Start early conversations about costs and funding
- Assess your child’s drive and work ethic honestly
- Tailor financial support based on their goals and initiative
For Students:
- Do thorough research on schools, programs, and financial outcomes
- Choose based on both finances and career goals

#5 — You Buy A House When You Should Rent

Renting = Buying Flexibility
- Less responsibility and more freedom to move
- Better suited for uncertain or transitional life phases
Buying Can Be Smart – But Only If Done Right
- Run an objective financial analysis before purchasing
- Many buy before they’re truly ready → leads to financial strain
Hidden costs – Closing costs, property taxes, maintenance, insurance, time
Checklist Before Buying a Home:
- Pay off all consumer debt
- Have a fully funded emergency fund
- Max out retirement accounts

#6 — You Take On Too Much Risk

If you can meet all your goals without having to take the added risk that comes from trying to outperform the market, then what’s the point of even trying? — Morgan Housel

No Single Thing Is Worth Jeopardizing Your Entire Future
- Anything that can break, WILL break – plan so the break doesn’t ruin you
Key to Better Financial Choices
- Think long-term, not just in the moment
- Imagine multiple future outcomes — not just best-case scenarios

#7 — You Fail To Protect Your Identity

Identity Theft Feels Distant… Until It Isn’t
- Because it’s intangible, people ignore it
- The consequences can be months of stress, inconvenience, or financial loss
Everyone Is Vulnerable
- On her podcast, a cybersecurity expert accessed the author’s sensitive data in 5 minutes using just her name and address
Prevention Tips:
- Use two-factor authentication
- Change passwords regularly
- Monitor your credit frequently
- Freeze your credit with Experian, Equifax, or TransUnion
- If defrauded: report to the FTC + file a police report
Smart Cybersecurity Habits:
- Be skeptical (not paranoid)
- Never email sensitive information or wiring instructions
- Assume anything online could be seen by a scammer

#8 — You Indulge Yourself Too Much During Your Early Retirement Years

Overspending Early = Trouble Later
- Indulging too much now can jeopardize financial security decades down the line
- Often rooted in emotional stress
Think ahead about what retirement actually looks like
- Expenses don’t drop as much as people assume
- $2 million saved = ~$60k/year (before taxes) if withdrawing 3% annually
- Healthcare, inflation, and unexpected costs shrink funds faster than expected
5 Key Retirement Actions
- Have a 5-Minute Conversation – Actually sit down and run the numbers
- Rethink Retirement Age – Be flexible with expectations
- Dream More – Visualize what you want retirement to look like
- Embrace the Gray – Retirement and working can overlap
- Hire a Financial Planner – Most people need help planning with stuff this complex

#9 — You Saddle Your Kids With Your Own Money Issues

Parental Money Behavior Shapes Kids’ Attitudes
- Even well-meaning parents can create anxiety, insecurity, or self-doubt
Common Parenting Pitfalls
- Spoiling children with no financial limits
- Extreme frugality that fosters scarcity mentality
- Pressuring kids to be financially successful
- Attaching too much emotion to money, which teaches kids to do the same
Advice for Parents
- Cultivate your own healthy relationship with money
- Aim for balance: teach responsibility and understanding
- Avoid emotional extremes

#10 — You Don’t Plan For The Care Of Your Aging Parents

Talking About Aging Is Uncomfortable but Essential
- Avoiding the topic leads to preventable emotional + financial stress
- Costs can reach tens or hundreds of thousands annually if unprepared
- Face the issue head-on
Genworth 2017 Median Care Costs (Rising ~4.5%/year)
- Assisted living: $3,750/month
- Private nursing home: $8,121/month
- Home health aide: $21.50/hour → tens of thousands/year
What Happens If You Don’t Plan
- You’ll still bear the financial/emotional burden
- You won’t know if parents are making informed decisions
- You’ll end up having reactive (and harder) conversations later

#11 — You Buy The Wrong Kinds Of Insurance, Or None At All

Insurance is Thankless
- Pay for it, but only benefit in rare, catastrophic situations
- Complicated language and pricing
Insurance is Essential
- Shifts financial risk to others
- The downside of no insurance could be catastrophic
Five Danger Zones in Insurance
- Underestimating Life Insurance Needs
- Buying Permanent Insurance (term is fine for most)
- Failing to Use Employee Benefits
- Surrendering a Policy – don’t drop the policy just because it’s been unused
- Needs Change, But Not Insurance
  - Life events should prompt reassessment

#12 — You Don’t Have A Will

Worst Mistake of All: Dying Without a Will
- Selfish – family will pay emotionally, financially, and with hassle
- Necessary regardless of age or wealth
Process of Dying Without a Will
- Takes months and incurs legal fees
- Spouse doesn’t automatically inherit everything
- Estate goes through probate court
- Some assets pass directly (e.g., retirement accounts)
- Court appoints an administrator for the estate
- Assets are assigned based on state laws (varies by state)
- Court decides where minor children go
- Charities or unrelated people are not included
What to Do
- Run through estate plan with loved ones
- Document where key documents are located
- Track funeral expenses
- Provide contact information for key advisors

#13 — You Try To Time The Market

“The smarter you try to be, the worse you do in investments.” — Warren Buffet

Trying to time the market leads to emotional decisions
- Biases are easier to see in others than in ourselves
- Gamblers believe they’ve “figured out” games of chance
People mistake success for brilliance and setbacks for bad luck
- Past success is not an indicator of future competence
- Emotional decisions without data can seem successful by chance
Passive vs Active Investing
- Passive investing is more effective than active investing
- Warren Buffett recommends owning an S&P 500 index fund
- Over 85% of active managers don’t beat the market in a given year
- Maintain a diversified portfolio based on your time horizon
- Annually rebalance the portfolio to align with original risk levels

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