Bert Whitehead - Is This Guy Serious?!

Some time ago, the Mrs. and I squeezed some entertainment funds out of the budget - a whopping 6 bucks for a Netflix subscription. $6 affords us their cheapest plan of 2 movies per month, which is about all we can manage to get through anyways. This has allowed us to catch up on the movies that we aren't seeing in theaters, as well as discover some interesting stuff - especially in the documentary genre. Some of the more notables:

Then we saw this DVD by Bert Whitehead called Why Smart People Do Stupid Things With Money. Why not give it a watch? It sounded good and it was release in 2007, so the content should be fairly relevant. We added it to the queue, despite knowing nothing about ol' Bert.

We watched it over the holidays - or at least we attempted to. We tried to look past the over-the-top 80's contemporary set. We tried to look past the well-to-do looking audience who seemed to act like they really didn't need to hear this stuff. We even tried to look past that goofy hat (seriously, Bert?). It was hard to watch.

The delivery didn't help either. It just wasn't compelling. We he did have something interesting to say, he seemed to brush it aside to move on to something else - "advanced concepts", like converting wealth to capital. Other points drug on and on and on - such as his explanation of what appreciation is. There were some decent bits of info in there, but the organization is horrendous.

Then he hit us with what would cause us to shut it off - about 18 minutes in.

Bert had decided it was time to talk about some of the stupid things people do with money. Ok, lets get to the meat of it.
  • Don't save for college - Bert feels that there are better places to put long term investments
  • Don't pay off your house - With a low interest rate on your mortgage, Bert says you can easily out earn that in the stock market.

Is this guy for real? Oh yeah, in fact, argument #1 is positive leverage. That's right, Bert thinks you should cash out your home's equity to invest. Yeah, sure - That'll never backfire! The only two dangers to pulling the equity out of your home, according to Bert, is if you just blow all of the money on clothes and junk, or if you buy an annuity. That's it. Nothing else. No danger of your house de-valuing and owing more than it's worth. No chance of the stock market taking a dive.

Argument #2 never seemed to come (again, the information is not well organized, and that's likely a good thing)

Argument #3 is that having a mortgage is a hedge against crazy inflation. According to Bert, if inflation goes crazy (which it has before) and you owe the bank $200k @ 6% interest, with money markets paying 9% - you win! Sorry, Bert. If I owe the bank zero dollars, with money markets paying 9%, then I win.

To recap: Reasons not to pay off your mortgage - #1 and #3 are leverage to invest, #2 - who knows, though he did tell folks not to make bi-weekly house payments. True that you don't have to pay for the privilege to do extra payments, but he doesn't want you to pay extra, period. Every wanna-be pundit in 2002 was telling folks to leverage their house to invest. And folks may have actually made money with it back then. This came out in 2007! Housing prices were heading south then and we all know where they are now.

We didn't even finish the feature, let alone get to the "Donor-Advised Funds' or 'Road to Retirement' sections of the disc. Maybe he knows more about that stuff, but I'm not betting on it.

Bert gets an F on this one. There was little redeeming value to the disc. PBS gets an F- for spending money from 'viewers like you' on this garbage.

Anyone else seen this one or know more about him?


Joel said...

What was the point of this blog. It's pretty unfortunate, that only you pay attention to my grandfathers DVD, and actually take the time to complain about it. I hope you liked ripping on my grandpa. Was this to warn people from his work perhaps?

Mr. (not) the Jet Set said...


Thanks for stopping by. We try to keep things upbeat here at Not the Jet Set, but we also call it like we see it. In the world of personal finance, there is a TON of bad information out there. The 18 minutes that we were able to stomach was laden with it - with nothing to back any of it up.

In hindsight, it would have been more fair to watch the rest of the offering - perhaps the rest is better? I may never know.

On a side note, Suze Orman's cousin likely would prefer that I not refer to Suze as a shill. But again, we call it like we see it. It's nothing personal.

Steve said...

Mr. Not Jet Set,

Thanks for this post. I actually got a lot out of Bert's book and was curious how he could fit it into a DVD. It's obvious his methodology was not conveyed well in the DVD. I suggest you go to your library and check out his book, and then you will have the complete picture. I prefer to own and not leverage my homestead, but there is a time and place for leveraging if you are a Jet Setter or have a high net worth. He does give a clear strategy of what to do and when, and the inflation strategy does work if used appropriatly. He is obviously more aggressive than Dave Ramsey, but similar with his clarification of baby steps. Good post. Thanks. Steve

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