"Whataboutism" is a buzz word that has been appearing more and more in our social discourse in regards to politics. Honestly, until last year, I'd never heard of it. But then John Oliver did a segment on it (which you can find here), and it really resonated with me.
I've always felt that our public discourse has been off. But what's scarier is, beyond politics, I've been seeing "whataboutism" creep into personal finance. I'm calling it Financial Whataboutism.
if you've never heard the term before, you might be surprised it even exist. But once you understand it, you can clearly see how it's wrong. And when it comes to money, it's crazy!
Let me share what I'm talking about.
The Definition Of Whataboutism
Whataboutism is hard to define. It's like pornography - you know it when you see it. I think John Oliver came to the table with the best definition of whatbaboutism I could find:
[Whataboutism] implies that all actions, regardless of context, share a moral equivalency. And since nobody is perfect, all criticism is hypocritical and everybody should do whatever they want... It doesn't solve a problem or win an argument. The point is to just muddy the waters, which just makes the other side mad.
With that definition, you might understand it in the context of politics. Our politicians and all the pundits on TV have regularly been using whataboutism to minimize various political issues.
It comes from the Soviet-era, where the goal is to minimize or distract by drawing comparison to another topic, potentially an irrelevant one. But the sad fact is, people fall for it.
And when it comes to money and financial topics, it can be costly.
Examples Of Financial Whataboutism
You might be wondering how whataboutism can even creep into the financial discourse in America? But sadly, it has. And it's getting worse.
On a low level, financial whataboutism is a more egregious version of the old "Keeping Up With The Jonses" mentality. People draw comparisons to others, and in turn, that supposedly justifies that everything is okay.
Where I've been seeing it the most lately has to do with investment costs and fees. You might remember an article I wrote called How Honest Financial Advisors Should Disclose Their Fees. In that article, I showed how an investment advisor was costing a reader $11,000 per year in fees on a $200,000 portfolio.
In my initial conversation with the reader, he was filled with whataboutism responses he got from that advisor.
"It doesn't matter about fees and commissions because you get good returns."
"You'd be paying for advice one way or another no matter where you go."
But when I showed him that I could get the exact same result for him for just $176 in annual fees, his jaw dropped. He realized he'd been falling for a whataboutism argument the whole time.
Here's some more example. I've been on Facebook and people have been talking about investment fees on a certain app. This app charges $1/mo in fees, AND also uses some high expense ratio ETFs. This might not be a huge issue, except there are so many free and cheaper options that exist (like this list of free investing apps).
Look at these whataboutism arguments justifying high investment fees:
What Can We Do?
It's incredibly difficult to combat whataboutism. I've seen it first hand trying to respond to people online using it (as it typically then turns into trolling). If it was easy to counter, we'd definitely see less of it in our culture than we do today.
But if you want to combat it, how can you approach it? It's definitely not easy, but here are some tips.
Don't Blame Or Use Personal Attacks
This automatically will shut down the conversation and put people into defensive mode. Even if it remotely seems like blame or an attack, it's over.
For example, if you're trying to talk to someone about using a high fee broker or salesman, don't blame them or tell them they're wrong for using this person. In many cases, people go with advisors they know, or are a friend of a friend. If this person is ripping them off, and you don't approach them in the right way, it's not going to lead anywhere.
Focus On Emotions
Money is an emotional thing. So are the underlying psychological aspects of financial whataboutism. If you want to talk to someone about money, focus on the feelings of it.
Money can evoke a lot of feels: fear, trust, happiness, worry, comfort, nervousness.
If you want to fight a whataboutism about fees and expenses, you're probably going to have to play on loss, missing out, preforming worse than others. But even then, it can be hard to evoke those emotions in a conversation about money.
Have Overwhelming Facts
Finally, you have to have overwhelming facts. While this is the last tactic (because psychologists have proven that feelings are more important than facts), facts are incredibly important.
You can't have a weak argument. And one or two facts probably won't help you overcome bias. But if you have enough solid facts, and can prove it with third party sources, you might be able to overwhelm some of the bias sensory in the person using whataboutism.
After thinking about this for a long time, and finally jotting it down, I've succumbed to the fact that I can't change people's mind online.
All I can do is highlight that this is an issue, show clear examples of it, and encourage you to not fall into a the financial whataboutism trap.
Nobody in this world will care more about your money than you. If you want to make excuses or poor comparisons to others, maybe you'll think twice from now on and look inside and reflect.
What examples of financial whataboutism have you seen? Have you been able to convince someone to overcome it?