“Annual income twenty pounds, annual expenditure nineteen [pounds] nineteen [shillings] and six [pence], result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.” — Mr Micawber, David Copperfield.
Why is everyone so broke? How can we get solvent? Why are credit cards so confusing? The financial system is notoriously opaque, and the traditional actors (schools, parents) seem to have totally abnegated their responsibility to teach the next generation how to flourish fiscally. As you probably already know, millenials for a number of reasons are set to be the first generation in recent American history to be poorer than their parents.
But don’t despair. There are many people doing amazing work bringing forward new solutions in the absence of the former hierarchy. As the old system breaks down, new solutions are cropping up on a daily basis.
Mark Allan Bovair is an accountant, who in his spare time hangs out on Twitter helping people with personal finance. He also has an email list you should sign up for. We spoke with him about back-to-basics financial literacy, and why his brand of personally focused sensible responsibility is resonating.
First, Some Cost of Living Numbers
- The median wage last year topped out at $897 a week for the final quarter of 2018 (US Bureau of Labor & Statistics).
- The median gross rent for a one bedroom apartment in 2017 was $1,012 (Census ACS Survey).
- The median college debt for someone who took out student loans is $17,000 (Value Penguin).
- 20% of millennials expect to never pay off their debt (Fox News).
- The median American household has $11,700 in savings across different bank accounts and retirement accounts (Magnify Money).
- The median household income in the United States was $61,372 in 2017 (United State Census Bureau).
It is in this context, and to a cash-strapped and struggling audience, who want to turn their lives around, that Mark Bovair speaks.
What’s the Bottom Line
Track your spending, get a side-hustle, don’t have credit cards, don’t spend money you don’t have. Bovair pushes the kind of back to basics financial advice which is so common in a lot of finance books, but which is also so roundly ignored by so many people. And his message resonates. Bovair has over 17 thousand followers on Twitter, and has been interviewed many times on various blogs and podcasts within the self-improvement space. While 1,000 journalists were laid off across America last week, those seeking to connect ordinary people with specific information that benefits their lives are seeing a surge in popularity.
It wasn’t always this way. When he first joined Twitter several years ago, he wrote mainly about his divorce, connecting with other men going through similar experiences. He doesn’t like going viral, one retweet of a Jordan Peterson comment that young men were shooting up schools because they couldn’t get laid earned him a thousand new followers, but also death threats. Eventually he pivoted, and began talking about self-improvement.
In this he has significant overlap with the Red Pill/Manosphere community. A lot of young guns in that corner of Twitter like to talk about how the 9-5 is for suckers and that anyone who wants to make real money should quit their job and start an online ecommerce business.
Bovair has very little time for such talk, regarding it as immature. “What man with a family,” he tells me, “is going to say to his wife ‘oh sorry honey, I can’t come to the zoo with you and the kids this weekend, I’m going to stay home and dropship.’” It’s ludicrous. For the overwhelming majority of people having a stable, regular job is the fastest and most effective way to long term financial security.
He looks on these guys as essentially con artists. They know most people are not going to get rich from dropshipping, and certainly are not going to gain the secrets to business success from a $500 e-course. They’re selling a kind of mirage. Someone might buy the course thinking they will do it, but never get around it, or start and then give up halfway through. The people recommending the courses are protected because they can always say they never guaranteed results without the effort, and of course massive amounts of effort are required to get the results. It seems to be a temporary gap in the market anyway, which will soon be replaced by the next hot thing. There will always be hustlers trying to make a quick buck.
Get a Side Hustle & Track Spending
That doesn’t mean it’s the only thing. Having a side hustle is important. Bovair’s side-hustle is this, speaking to people about how to get their finances under control. He also does part-time bookkeeping for housing associations and other small organizations for extra cash. Getting a part time side-hustle is vital to your financial health, he says, anything that gets you even a few extra bucks.
There’s more back-to-basics advice. Bovair reminds people to track their spending, and recommends a specific tracker he sends out to his email subscribers. He also hates credit cards. Most credit cards are unnecessary and actively damaging. He draws a distinction between “borrowing to consume,” as most Americans do (putting a new couch on a credit card) and “borrowing to create” as a business might do (borrowing to remodel a restaurant or to get a product to market).
One cause of the issue may be psychological. Credit cards lack the tangible feel of cash, so when you spend the money you don’t have the same visceral emotional reaction to the loss. For example, a study at Duke University published in the Journal of Consumer Research found students valued a mug they had paid for with cash more highly than one they had bought using a card. Bovair agrees that the psychology of buying things online makes it much easier to spend, after all, it’s just numbers. It’s got even easier in recent years, now we have things like Apple Pay so we don’t even need to swipe a card. He doesn’t think this is necessarily a deliberate ploy by the corporate overlords of America to rob the country. It’s more likely just the confluence of various factors and interests. He initially recommended tracking your spending using a pen and paper to get that physical reconnect.
If we abolished credit cards would it push people to be more responsible? Maybe. It would mean you couldn’t buy something unless you could actually afford it.
Sadly you have to have a credit card in order to have a credit score. That’s necessary in order to get a mortgage and a house later on.
So why is this super basic advice resonating so much?
Bovair doesn’t know. But he’s going to keep on giving it.