Truth About Money Lies?

 President and CEO of Ronald Blue and Co.—a financial and investment advisory firm—Russ Crosson co-wrote a book with Kelly Talamo called “The Truth About Money Lies: Help for Making Wise Financial Decisions.” While the authors provide some healthy financial advice, their truths aren’t based on all the information. For example, while they warn about being in too much debt—which is sound—and quote a Proverb about a borrower being enslaved to the lender, they ignore the many verses that assume people will have to borrow at some time. And most of the warnings—including Christ’s Sermon on the Mount—are for the lenders: you must lend even if a Sabbath year is coming when all debts are released (Cf. Deut. 15.1-2; Mt. 5.42; Lk. 6.34); don’t enter the house to reclaim any collateral used to secure a loan (Deut. 24.10-11); return a person’s cloak by nightfall so the borrower can be warm at night (Deut. 24.13). And so on. The authors don’t or minimally discuss these aspects. 

Likewise, while they like to quote the average credit card balance of $14,000+, they don’t discuss the data’s distribution. It’s not a normal, Gaussian, bell-curve distribution. According to the Federal Reserve, nearly half, half or over half (depending on the year) carry no balance on their cards, paying their charges each month. Decades ago, the AT&T credit card president was fired because they didn’t make enough money, missing their target: the reason is they based their projections on the average and not the median. Only 3% of Americans are delinquent being 30 days overdue. What drives the high average figures being quoted? According to the CFPB, one-third of payments made towards credit balances cover 10% or less of the balance. So there are a minority of credit card holders—and since people have 3+ credit cards, it may be the exceptions—that are carrying very large balances. Remember the 3% delinquency rate. However, the authors sound the alarm about using credit cards as if most people end up paying interest on tens of thousands of dollars. Most Americans are handling their credit cards well.

So while there’s good financial advice, it’s not necessarily founded on truth or sound premises.