Harry Potter, financial wizard?

Harry Potter is a millennial. I’ve never thought of Harry and his cohort as millennials but the Financial Times has called my attention to this fact in Moira O’Neill’s New Year’s Day piece titled “Harry Potter at 40: Would he be a financial wizard?”  This article uses examples from the Potterverse to explain financial planning for retirement to millennials.  The advice is straightforward and commonsensical:  You should first pay off all debt, except for your mortgage, if you have one.  Do wizards get mortgages to buy quaint little cottages in Hogsmeade from Gringotts?  What do the goblins do to you if you get laid off from your job in the cauldron factory and miss a mortgage payment?  I wonder if the Weasleys had a mortgage on The Burrow that the twins paid off for them when their joke shoppe became wildly successful?

Most people, if they can afford to buy a house at all, cannot pay for such a huge purchase all at once so a mortgage loan to pay it off over time is necessary.  But standard advice is to pay for everything else with cash to avoid living beyond your means and wasting money on credit card interest.  If you cannot afford to buy that Firebolt outright, you shouldn’t slap your Gringott’s charge card down on the counter in Quality Quidditch Supplies and buy it anyway.  (Not that most of us follow that sound advice.)  Do wizards have charge cards?  Electronic devices won’t work so there would have to be a magical substitute for the chip or magnetic strip, and a way of instantly communicating with the credit issuer.  Since British wizards seem to have only one bank, that might be easier than it sounds.  Can they write cheques or is it a cash-only economy?  Somehow I can’t see Gringotts goblins accepting wizard cheques.

The article also suggests setting aside 3-6 months worth of living expenses for emergencies, and being careful that your definition of “emergencies” doesn’t include England getting into the Quidditch World Cup for which you now need to purchase tickets.  The Weasley twins betting all of their savings on the Quidditch final are not a financial example to emulate.  And remember that money is an exception in Gamp’s Laws of Elementary Transfiguration.  You cannot create some from nothing, nor can you multiply it by the Geminio spell.

O’Neill then reminds people with dependants to purchase life insurance to provide for them in the event of an unfortunate wand malfunction or spell disaster such as that suffered by Luna’s mother when she was nine.  Do wizards have life and property  insurance?  They appear to have universal healthcare, so no need for health insurance, but what about broom insurance and the like?  Face it, we know that Seamus Finnigan is going to accidentally set his house on fire at some point.  Do the sort of repairing spells that Dumbledore used in Slughorn’s drawing room suffice to obviate the need for property insurance?  What about liability if you get into a broom collision?

The last personal finance tip is to invest now to provide for retirement income later.  Is there a magical stock market and would anyone trust it if there were?  Imagine all the spells the unscrupulous would be casting to make the value of their portfolio rise!  I can see a Mundungus-like character trying to persuade people to invest in his dodgy flying carpet enterprise.  Is there a newscaster (get it, newscaster?) on the wizarding wireless reading the magical equivalent of the FTSE 100?  The WTSE?

Of course Harry is lucky not to have to worry about money because of the piles of gold he inherited from his parents and his godfather.  But what about inflation?  Within his first few minutes in Diagon Alley he hears a woman complaining about the price of dragon liver: “Seventeen Sickles an ounce, they’re mad.”  (That’s a Galleon, by the way.)  By the time he’s ready to retire from the Ministry, might dragon liver be five Galleons an ounce or more?  Let’s hope not.

What financial advice should we take from the magical world of Harry Potter?  Molly Weasley was adept at stretching every Gnut and feeding her large brood on a budget.  Perhaps she should write a book about it: “Now you listen to me:  Molly Weasley’s advice for thrifty witches and frugal wizards.”  You know you’d buy it!