No One Ever Told Us That: Money and Life Lessons for Young Adults

CHAPTER TWENTY-SEVEN

INTEREST RATES

Whatever you do in life, interest rates will affect many of your decisions. Are mortgage rates going up or down? Can you get a decent yield on treasuries, certificates of deposit (CDs), or money funds? Will stock markets reward you based on interest rates? Do credit cards charge too much?

Predictions about fluctuating rates and their future take up enormous space in the financial media. The experts pontificate and pronounce. Talking heads, background noise, all geared to yesterday and tomorrow, all short-term thinking.

People will talk to you about interest rates and their direction all of your adult lives. Here's a true story that I believe should be taken to heart and remembered well when the subject arises.

One of the earliest venture capitalists was the New Yorker Fred Adler, a man of very strong opinions who did not suffer anyone he deemed a fool. And he shot from the hip. Adler was a force behind companies such as Data General, an early technology powerhouse; Staples, the office superstore; and many others. At the height of his career, one day, he assembled in his conference room a group of chief executive officers (CEOs) from business, government, and finance. One of them raised the subject of interest rates for important discussion. Before this began Adler had called for a telephone to be brought into the conference room, much to the annoyance of everyone there. Adler held his hand up to the room as if to say, “Stop the chatter.” They ...