Don’t take financial advice from rich people! Listen to me instead. No, really
Editor’s note: Spencer is pretty humble in the post below about the consumer finance perspective he brings to you everyday, but when you’re done reading this post, take a spin through his archive. You’ll be smarter for it.
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If you want good advice on what to do with your money, don’t listen to people who have a lot of it.
Wait, what?!
I mean it. If you really want advice on how to deal with money problems, you need to go to people who know exactly what it’s like to be in your shoes.
I want to draw your attention to an insightful blog post from Ben Carlson, a fellow Michigander and financial blogosphere staple. Link below. Carlson said that you have to be careful about listening to finance celebs whose claim to fame is “being good with money.”
He sums up why like this:
Taking personal finance advice from the rich and famous can be hazardous to your wealth because eventually, these people can lose touch with reality.
Every time you see an article saying that your expensive coffee habit (or avocado toast, or whatever) is preventing you from retiring, keep scrolling. The person writing that probably has no idea what your situation looks like.
For example, Suze Orman and Dave Ramsay, the two top financial advice evangelists, often assume any money you spent on frivolous things can go into the stock market and get you a 12% rate of return. Pro investors know that’s a pretty extraordinary assumption.
So who should you listen to for money advice if the experts are out of touch?
Well, how about a smart, hard working millennial still in his parent’s house trying to figure out life stuff one day at a time? That person might have a better idea of how real people think about money, right?
Well, that person is me. Right now, I’m trying to budget paying down my bill at my therapist so I can afford to start putting money into my down payment fund for a future home I hope to buy—I already have my favorite Detroit neighborhood picked out and everything.
Sounds a little more relatable, doesn’t it?
So if you want to follow along, I’ll be happy to share what I learn. In fact, it’s my job to share what I learn.
Just beware—I’m going to make mistakes along the way. But I’m a little more in touch than the gurus Ben Carlson tells us to shake our heads at.
Follow The Basis Point via the buttons below and enjoy the ride.
Here’s a nice chaser to this discussion: how did Suze Orman handle Carlson’s polite criticism? With wit and charm:
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Reference:
– The Stephen A. Smiths of Personal Finance (A Wealth Of Common Sense)