Entry 1936, on 2018-09-19 at 19:54:36 (Rating 2, Comments)
Here's one of my favourite "dad jokes": Q. What's the difference between ignorance and apathy? A. I don't know, and I don't care. What has this got to do with anything of any importance? Well not a lot, but hopefully you will see the link with my real topic today by the end of this blog post.
More and more people are being encouraged to take charge of their own lives, especially in a financial sense. Actually, now that I have said that I might add that it is possible that the phenomenon has peaked and that a more reasonable perspective is taking over. It's hard to say, because I don't know of any stats on the subject, but let's just accept as a working hypothesis that it is a real phenomenon.
So I will give some examples of the sort of areas where people are expected to get more involved in improving their own financial status.
First, there is investment in superannuation. In New Zealand people can invest in private schemes or join the official government scheme, called Kiwisaver. But apparently the majority of people who are in this scheme are getting far from the best return they could. In most cases they have chosen a too conservative and "safe" option, rather than one which might have a similar level of safety but offer a better return.
Second, there is buying electricity. Most people are not getting the best price available and many are paying far too much while large corporations are getting huge discounts. Superficially, it seems that if people researched the electricity market and shopped around for the best deals they might be able to make some savings.
Third, most people pay more tax than they should because they don't claim on some items they could. And most have sub-optimal arrangements with their banks for savings and everyday accounts.
Fourth, it is common for employees not to be getting paid what they think they deserve or to fail to get a good deal regarding work conditions. Whose fault is this? Well they are told they should be negotiating a better deal with their employer, but is this realistic? In the vat majority of cases, I don't think so. The employer-employee relationship is so one sided - especially after recent attacks on unions and labour regulations - that there's not a lot the worker can really do to help themself.
Finally, there is a similar situation for buying almost any significant item you want to name. Consumer New Zealand has recommended people should shop around to get the best prices for anti-allergy medications this spring. Cell phone and internet prices are another item which the consumer is expected to research and make a sensible decision on. And the same applies to numerous other goods and services.
When we see the dire living conditions of many people in New Zealand it is tempting to just think they haven't put enough effort into making their own lives better. Should they be making better superannuation decisions, buying electricity from cheaper sources, claiming on more tax deductions, getting a better deal from their bank, buying cheaper medicines, and using more economical services for their phone and internet?
Well, I guess so, but you do have to wonder where all that time is going to come from, as well as where the expertise in so many different areas might originate. I mean, it could take a long time to properly research even one of those subjects and that assumes the person has the skills necessary to even do that.
Plus there's the other major factor: who can really be bothered spending their time on this stuff? Should we be spending our time researching this financial information or doing something we actually enjoy? I mean, I know a lot of the people propounding on this subject just love the fine discipline of accounting and seeking the best financial deals, but most of us find it extremely tedious.
Imagine if everyone suddenly started spending hours each week researching this stuff. What a miserable existence it would be, and what a boring society that would create. We are all different and everyone should be able to live well without having to spend a lot of time on what should be unnecessary things which they also don't enjoy.
The facts are this: banks are deliberately selling sub-standard products which they themselves have created just to make a few extra dollars from naive customers; electricity, internet, and phone companies deliberately create unnecessarily confusing deals so that people will have to pay more than they really should need to; and Inland Revenue is not going to make it easy for anyone to claim deductions, and all the rules are in their favour.
Actually, my favourite example of this cynical and manipulative behaviour against customers is telecommunications companies. Their plans are obscure, awkward, and apparently designed to confuse the user into spending more than they need to. In fact, about 10 years ago the head of New Zealand's biggest telecom company, Theresa Gattung, famously said how she regretted that their devious and deceptive practices might not be able to be maintained much longer.
I know people on Spark's (that same company's new name) cell phone service who have no idea how their plans work and why they can't do certain things. In one example, the user has plenty of credit, never uses it all, has to top-up the balance has expired in some way, and still can't retrieve voicemail for some reason.
Why not change your provider and use a different one? Because they are all so similar that it is pointless. The whole industry is rife with dishonesty and greed.
So finally, given all of these problems, how should we get the best deals we can in this modern society? Well, I don't know, and I don't care!
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