The problem with using conventional wisdom to make business, investment or personal financial decisions, is that it’s frequently misleading. We’re attracted to simplistic axioms because, these days, who doesn’t want things wrapped up into nice, bite-sized info bundles?
But before you chow down, take a good look. Here are three “common knowledge” nuggets we hear a lot.
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1. Taxes are lower in the U.S. than in Canada.
Doesn’t matter what your political stripe, most of us believe this implicitly. On May 13 KPMG, the giant international accounting firm and hardly a bastion of leftism, issued a report ranking the corporate tax competitiveness of numerous countries. Canada came in second and the U.S. finished sixth, with corporations there paying 36.1 per cent more than in our supposedly high-tax country.
2. Young people don’t read books like they used to.
I raised this over lunch with Kevin Hanson, President of Simon & Schuster Canada and Alison Clarke, Director of Sales Operations. They took turns pummeling me with sales figures showing that young people are reading more and buying more books than ever.
3. Newspapers are dead
This is like the widespread assumption held during the tech boom that the Internet would soon be the death of brick and mortar businesses like banks and retail stores. They’ll all be gone, the belief went, cyber shopping and Internet banking would rule. Didn’t happen.
About a month ago Paul Godfrey, a smart businessman, led a consortium which plunked down upwards of a billion dollars for the newspaper assets of CanWest Global Communications Corp. Are newspapers dead? Or are they, like banks and stores, going to adapt to the times?
Next week I’ll bash some conventional wisdom about saving and investing.