MONEY COMMENT
Rational Ignorance Costs You Dearly

By Cliff D'Arcy
June 13, 2003

As I mentioned previously, I'm reading The CEO of the Sofa by American humorist P J O'Rourke. In one chapter, PJ discusses "rational ignorance", which is a protective device we all employ to keep the world from driving us crazy.

In essence, the world has become such an overwhelmingly complex place that it is no longer possible for us to keep up with many aspects of life. Instead, we decide that it is a complete waste of our precious time to even try to acquire enough knowledge to tackle many issues.

One everyday example of rational ignorance is voter apathy. Many voters quite sensibly believe that politics and government have become so complex that the only sane decision they can make is not to vote at all. In elections, the undecided vote is usually the deciding factor!

However, rational ignorance can prove extremely costly when it comes to money matters. The world of personal finance is mind-bogglingly complex and will always be so. That's why I believe that no one working in it (especially media commentators such as myself) should ever be referred to as an "expert"!

To put things into context, a quick trawl of the Internet reveals more than:

• 7,500 mortgages
• 1,200 savings accounts
• 400 unsecured personal loans
• 300 credit cards
• 300 bank accounts
• 20 different gas and electricity suppliers

and so on and so forth.

There's just far too much choice: it's no longer humanly possible to pick the best deals from such a massive selection. This leads to financial apathy, where we give up and just live with what we have, instead of shopping around to make our money work harder. However, it's so simple to beat this dangerous inertia, if you can only access the Web or read a newspaper.

My favourite money magazine, Moneyfacts, produces Best Buy tables for the media, covering banking, borrowing, saving, insurance and investment products. What's more, its website include a number of search engines linked to its massive database. After answering a few key questions, you can view your very own personalised Best Buy list - what more could you ask for?

So, the trick is getting someone (or something) you trust to do the spadework for you - and that's where the Fool can help. We do our best to alert you to superior products (and, just as importantly, to warn you off the nastiest), leaving you to make your decisions in your own good time. As Obi-Wan (almost) said to the young Skywalker, "Use the Fool, Luke!"

Finally, I leave you with a thought from Mark Twain,

"When we remember we are all mad, the mysteries disappear and life stands explained."

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