My rhetorical question in Part I of this series as well as in today’s installment is this: What lessons are we Americans learning from the current recession?

The sad truth is that there are really no new lessons to learn – all of the important financial lessons have been taught to us before, but there is a significant body of evidence that we have willfully chosen to ignore them, from those living paycheck to paycheck all the way up to the millionaires who entrusted their money to Ponzi schemers.

Previously, I suggested that we are given an opportunity to learn that the BEST mortgage to have is the boring old 30-year fixed – and that if an investment scheme seems too good to be true, then it IS too good to be true and ownership of individual stocks is only for those who can afford to lose that money.

Today, I offer some additional hoped-for learnings – or, better put, re-learnings:

1. Your net worth should be approximately one-third in equities (stock mutual funds), one third in interest-earning instruments (certificates of deposit, savings accounts, savings bonds, money market funds, bond mutual funds) and one third in real estate, starting with your home. Anything other than a temporary variance from this formula is risky behavior. In other words, a “safe”, steady allocation of assets protects us as much as possible from market fluctuations in any one or two of the categories. In other words a safe, steady allocation insulates us from exogenous factors – those factors beyond our control. If it really matters to your net worth and your peace of mind what AIG did, then you are a victim of exogenous factors. I urge you to worry ONLY about the things you can control and to let go of the things that you cannot control.

2. When people sell you greed, then you will pay too much. Let’s be clear here: most people who claim to be offering you financial advice are really trying to sell you financial products. And those products are generally configured to be more profitable for the originator and for the salesperson than for you, the buyer. This is especially true if the purveyor promises you better returns than those typically provided by the stock market (the S&P 500 or Russell 2000 indices, for instance). What I am saying here is that salespeople, and all brokers are trained in sales, know to play to our greed, our fantasy that we can get ahead of our neighbors by dint of something other than hard work and steady financial planning. All of those “investors” who gave their money to Bernie Madoff were succumbing to their own iteration of greediness. In truth, they were not investors so much as high-stakes gamblers. I bet many of them bragged incessantly to anybody who would listen about how they were doing “better than the market”. Yeah, right.

3. When people sell you fear, then you will pay too much. This is a two-sided coin – greed on one side, fear on the other. If that salesperson cannot trigger your greed reflex, then he shall surely aim for your fear button. These are the folks who sell you waaaaaay more life insurance, especially so-called “permanent” or whole life, insurance than you or your family really needs. Or they’ll reach into your pocket to sell you complicated trusts, lodging in you an unreasonable fear of probate. Whenever a salesperson, including a broker or an insurance person or even a lawyer, tries to sell you something you do not understand, walk away. Check it out with someone else who is not trying to get a commission or fee from you. Yes, you may go back to buy the product originally offered, but you should do so only after making a proper determination of suitability. I hope we are learning to just say no to fear.

OK, the real lesson I hope we are relearning is that we working folks should really set ourselves on a path of getting “rich” slowly. Any promise of a get-rich quick scheme (and this involves ANY scheme that makes more money for somebody else than for us) is a trap for the unwary. Do not kid yourself. If the proposed scheme were really such a good bet, then why is it being offered to you? Our worst enemies are our own senses of greed and of fear. Do not let the conniving bastards into your head. Instead, be concerned only with those things you can actually control. All the rest is garbage.