Personal Finance

Don’t get lured by financial pornography

In my workshops, I often refer to the term “Retirement or Financial Pornography”. It often gets people’s attention. In fact, when Canadian Capitalist reviewed my book “10 Things I Wish Someone Told Me About Retirement” he references the term retirement pornography as the opposite of straight talk you don’t usually hear.

Sex sells

As the old saying goes, “Sex Sells”. Just look around at the advertising world and you can’t help but see the barrage of sexual images to sell products and services that really, have nothing to do with sex.

In the financial world, there are not a lot of pictures of half-naked men or women selling mutual funds or other investment products but there are other forms of what I call financial pornography.

Financial pornography is really whatever it takes to sell an investment, financial and retirement products. It’s about using numbers, words, and images in a sensational manner to arouse an emotional reaction. Here are three forms of financial pornography.

Performance-based advertising

One example of Investment pornography is the use of performance-based advertising. Look in the paper today and you will see performance-based advertising showing an investment that made excellent returns. The problem is it’s never the same investment or the same category. One day it’s gold, the next day it’s real estate, then Oil and Gas, then Emerging markets and so on and so on.

Financial institutions prey on investors by using past numbers to lure you into their products. Here’s the problem: everything goes in cycles. What goes up comes down. What goes down comes up. What goes down the most comes up the most and vice versa. We get lured in because we can’t help but think in straight lines. We think that what has gone up in the past will continue to go up in the future. If it were really that easy, then why do we all lose money from time to time? It’s because we forget the one disclaimer that the investment industry preaches; Past performance is no indication of future performance.

Past performance is sexy but it promotes the one thing that will lead you astray – chasing performance.

Get rich quick

We live in a new society. It’s all about immediate returns and immediate benefits. The faster the better. Think about some of the common advertising slogans out there: Just add water, microwave in 2 minutes, lose weight in 7 days, 30 minutes or it’s free and in the financial industry, get rich quick! Hey, wouldn’t we all want to get rich quick? Sure, it happens to some but hey represents the extreme minority. In most cases, wealth is created by hard work, good planning, and innovative thinking. You can get rich with luck but the odds are against you. Just remember the old saying, if it’s too good to be true, it probably is.

The retirement dream

What do you plan to do when you retire? Do you see yourself traveling? Maybe lying on a beach, reading a book, drinking a cold beverage? Most people, when they think of retirement have images of what I call retirement stereotypes. In other words, the images that companies have used to paint what retirement should look like have stuck in our own head as the vision of what retirement should be. In my video interview with Rob Carrick of the Globe and Mail, I talk about how traveling in retirement can be a form of retirement pornography.

The bottom line is retirement is personal. In other words, retirement can be whatever you want it to be. In reality, most people don’t travel 365 days of the year. In fact, they don’t travel 180 days of the year or even 60 days of the year in retirement. People who do travel often say “It’s nice to be home” at the end of their trip.

A successful retirement is more about understanding what you do at ‘home’ when you are not traveling. There are lots of people living incredibly successful, purposeful and meaningful retirements doing really ordinary things. You don’t need to have what society says retirement should be to live the best years of your life. Do what makes you happy. (And if that means more travel, then do so!)

My five cents

Today we are pounded with more advertising and stimulus than the human brain can possibly handle. Everyone out there is doing whatever they can to get your attention. To help you combat financial pornography, I offer you three very simple tips: Ignore it, think for yourself and don’t buy it if you don’t understand it.

Can anyone else think of examples of financial pornography? Or better yet, ways to combat it?


  1. Paula @

    Jim — I think you’re right about having unrealistic retirement dreams. There are tons of images of good-looking seniors playing golf in a tropical resort, but the reality is:

    1) You might get sick
    2) You might get tired easily
    3) You might not have enough money
    4) You might not want to be so far away from your grandkids … I know a retiree with lots of money and in great health who always thought he’d travel in retirement, only to realize that he missed being away from his grandkids too much.
    5) You might be bored or lonely. Paradise can be a really lonely place.

  2. Henry

    I think you’re right too, you’ve pointed out something that I never thought of before, though when you do it suddenly becomes obvious the difference between what I see the older people in my family actually doing compared to the glossy ads from financial companies. I’d love to see more of some sort of ‘reality’ stories about retirement, and will make sure to be aware of when I’m being shown financial porn.

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