Fame & Fortune: ABC's John Stossel
Consumer crusader has '20/20' vision with
his finances |
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Bankrate: Do you feel that your reporting over the years has made people less optimistic?
Stossel: I don't know. People keep buying stuff, despite the fear of being conned. Sometimes we are conned.
Bankrate: Were you activist-minded when you became a consumer affairs reporter out of Princeton?
Stossel: I was not an
activist; it was just a job that sounded interesting. But I guess
I was an angry consumer reporter. I was mad at these businesses,
and I am mad at these businesses that bully and mislead people,
Bufferin telling people it works twice as fast or Excedrin kills
more pain. They're lying to us, misleading us. The young reporter
was outraged, and I made a career winning Emmys exposing them. But
when I step back and see how overwhelmingly business gives people
good stuff ... capitalism is the system that has lifted more people
out of the misery of poverty than any ever, and yet it's vilified
in newsrooms.
Business, I think, is hated because people think of
it as a zero-sum game, as if Bill Gates having $30 billion means
we have $30 billion less, but it doesn't. Business succeeds by creating
wealth. If you teach me something, then you haven't lost anything,
I give you money and we both have the knowledge. When you buy milk,
there's the weird moment when both you and the clerk say "thank
you," which is because you wanted the milk more than you wanted
the buck and the clerk wanted the buck more than the milk. Business
doesn't happen unless both parties win, because it's voluntary,
unless there's fraud. It has to benefit both parties or it doesn't
happen. Government, by contrast, uses force; if you don't do what
they want, eventually men with guns will come and make you do that.
And that's very different and one more reason why government should
be limited.
Bankrate: Do you have any favorite targets in the financial world?
Stossel: Sure. In the
"Experts" chapter, we talk about the guys who go on TV
and give you advice on picking stocks. They do work at it full time,
so you'd think they'd know something, but they are so full of it.
Over the years most of them fail to beat the averages, the index
funds. Which means that if you blindfolded yourself and threw darts
at the stock tables, odds are you would outperform most of these
people on TV because the information they're touting is available
to everybody. Only 5 percent of them are able to beat the market,
which means 95 percent of them don't.
Bankrate: Did what you've learned as a consumer reporter affect how you invest your money?
Stossel: Yes, I put my money into index funds more now because I'm not paying for those expensive trades. I handle it myself. I was always paid to educate myself, but I think anybody can read Forbes and Money magazine and get enough information to manage your own money and then you're not at risk of some guy who may churn your account or turn out to be a crook. It's not that hard to buy index funds.
Bankrate: Did you ever succumb to the temptations of real estate?
Stossel: Sure. It's very hard when you hear people talk about how they made a mint, and I went in, when I was younger, on some deals with friends that turned sour.
Bankrate: Did that make you a more conservative investor?
Stossel: (Laughs) It did.
But I was also influenced, as I say in the "Happiness"
chapter, by seeing that more money was unlikely to make me happier
for long, and I felt better about just trying to stay ahead of inflation
and make decent returns on index funds rather than make some big
pot of gold.
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