Economic anti-education

Many times I hear sentences from my clients along the lines of, 'Why don't they teach this in school? What did we waste our time on cosine and quadratic equations for, instead of basic financial calculations, etc.".

I naturally join the parents' wish that their children learn not only to calculate the area of a circle but also the impact of management fees on their pension or of the index on the risk of defaulting on loan payments.

The problem is that the real world is not only comprised of not learning economic topics, but also of unlearning, forgetting, and public confusion, so that even those who were interested and gained knowledge may lose it, while others who did not gain knowledge may become confused between what is important and what is secondary.

For how many weeks is the supplement accompanied Money From Yediot Ahronot: Families facing economic hardship are being advised by Bank Hapoalim branch managers on how to improve their financial situation. Congratulations to the families who appeared in the last supplement, as a sort of closing party (until the bank's advertising budget funds the continuation). The newspaper's written party was attended by the bank's CEO, branch managers, and the families whose plight was incorporated into the advertising campaign.

Why did I lose my temper over the "social" project?

Because if you are a chicken with a sore neck, it would not be a good idea to consult the butcher. If you are in overdraft, it would not be a good idea to consult your branch manager.

What do I want from the bank employees? They only gave good advice, right?

To the Buvlil family The bank advised refinancing the mortgage (and increasing the bank's profits in the process).

To the Goldin-Rubenstein Family The bank advised using the bank's direct channels (thereby saving tellers and air conditioning in branches and increasing profits).

To the Rotman family The bank advised them—surprise, surprise—to use the bank’s website. This family also received "free" pension advice at the bank without anyone bothering to mention that from now until their death (or until they decide to stop), the insurance company would pay a portion of their management fees to the bank each year as marketing/distribution fees. When corporations (in this case, the bank and the insurance company) deal with each other, they don’t need confusing terms like "consulting" but call a spade a spade—marketing fees. The amount the insurance company will pay the bank each year is 0.25% of the employee’s savings balance. For example, an employee who saved 300,000 shekels and received "free" advice at the branch—the insurance company will now pay an amount starting at 0.25%*300,000 = 750 shekels per year. Multiply that by two for both spouses, and we get 1,500 shekels per year, which will increase as the savings grow. All in all, the Rotman family is expected to transfer over 100,000 shekels to Bank Hapoalim through the insurance company for the 30-minute pension consultation they received. And why do I say that the Rotman family will pay this amount rather than the insurance company? Because this amount could easily have been deducted from the management fees in the form of a discount if the insurance company had not known that it was obligated to transfer it to a third party, the bank.

The Algrisi Family The bank advised the family to buy fewer snacks for Shabbat. The family has an overdraft of 30,000 shekels, but of course, the bank did not offer any advice on negotiating a lower overdraft interest rate. Let’s say the family pays 12.1% interest on the overdraft, and through relatively simple negotiations, they can lower it to 6.1%. The annual savings would be approximately 1,800 shekels, or 150 shekels per month. I don’t know if 150 shekels a month is more or less than the cost of snacks, but it’s certainly possible to save on both.

None of the families received an offer to review their mortgages for improved terms. None of the families received advice to negotiate a reduction in bank fees. And since corporations are obligated to one another (remember the 100,000 that the insurance company will transfer to the bank for just one family), you won't find an offer here to check, for example, if there are unnecessary insurance policies.

Meaning, a series of supposedly "educational" articles is actually anti-educational. The reader might think that what they need to do to get by in life is to save on nuts and cables, even though the big money is elsewhere. For example, saving on mortgage refinancing can easily amount to hundreds of thousands of shekels. I am definitely in favor of saving on cables. I myself do not have a television at all. Nuts are also not my cup of tea, but the most important thing when dealing with a problem is identifying what is primary and what is secondary. If you can save, let's say, 100,000 shekels on a mortgage and 1,000 shekels on nuts, then it's quite clear that it's worthwhile to deal with both, and it's quite clear where to start.

Harmful marketing content is a disease of our dying press, which is looking for additional revenue streams. For example, the health section of YNET recently featured Article "In partnership with Tnuva, meaning financed by Tnuva and in Warning about eating fruit.

Tnuva does not hold the Froot brand, but it has many other brands such as Adanot pizza and Tnuva's Tirat Tzvi pastrami. These products will never have consumption limitations in the "Health" section in cooperation with Tnuva.

The International Freedom of Press Organization Freedom House reduced the freedom of the press score for Israel in 2016.  One of the main reasons for the reduction of Israeli press freedom, according to the organization, is the takeover of what is written in newspapers by stakeholders and capital:

The use of branded content and unmarked “native advertising”—paid material that blends in with the surrounding content—is an increasingly important revenue stream, and sometimes even the main revenue stream, for major media outlets in Israel. The most-viewed news website in Israel, Yedioth Ahronoth’Ynet, is also the site that contains the most native advertising, and commercial firms even fund some of its journalists’ salaries directly.

If you've managed to read this far, I warmly congratulate you and assume that from now on, you will receive financial advice in the press more critically. Treat it with great respect and suspicion.

What are the alternatives to paid marketing content? Of course, content that citizens themselves will fund. These days I am managing the campaign for the release of my book, "Effective Mortgage to Light." The book's publication is publicly funded, and I assure you that every word written in the book is intended solely to improve your financial situation, and not that of any corporation.

The book contains recommendations on insurance – yes, also recommendations on when it's worth canceling insurance. When "children's" savings can lead to poverty for children, what contractor tricks can cause you to lose a lot of money, and how to search for an apartment. Of course, the book also contains the method that will save you a lot of money on a mortgage simply by increasing your knowledge.

So far, several dozen people have contributed to the book and will receive it at a reduced price when it is published. Additionally, there are other valuable gifts, including a private consultation hour with me, a special meal, and further surprises. Contribute to the project and help yourself and others receive high-quality content that many people who have encountered it through lectures and other events have described as potentially life-changing.  Click here to enter the project site now