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On this episode of How To Money, Matt and Joel are, somewhat ironically, tackling money advice. Who should we not be taking financial advice from, and who should we? How can we tell if we’re getting good advice? Even the experts can lead you astray – sometimes purposely, if they have a product or service to sell you. And friends and family may have your best (compound) interests at heart, but they may not be able to give you advice about your specific situation. What worked for them may not work for you – or it might just not be the right time. For example, Matt remembers being told to open a Roth IRA right as he graduated from college. Sounds good, but he wasn’t really in a financial position to be investing at that point. He would have done better to have built up his emergency fund instead of putting his money into a volatile market. However, at a different stage in his financial life, a Roth IRA is amazing advice. Personal finance is personal for a reason – your circumstances, goals, and abilities are all relevant to the discussion.
More and more frequently, people are turning to social media accounts for financial advice. TikTok, Instagram, YouTube, and Reddit are all full of purported experts offering silver bullets for your finances. But it’s probably not a great idea to blindly follow their advice – they don’t know you at all, so they can’t know if their advice actually applies to you. It’s also hard to vet your sources on social media; someone might be telling you what a money wizard they are, but they actually have no qualifications whatsoever. And if you don’t have any money education of your own, you won’t be able to tell the difference between good advice and bad. That’s when you can seriously stumble.
Having some knowledge of your own is essential for pretty much any money conversation for that exact reason, the guys say. Even when you’re paying an expert to handle your finances for you, it’s important to have basic information in your toolbox just so you know what kind of questions to ask. Financial advisors are great, if they’re fee-based. If they make commissions off of certain funds, then you can’t be sure they’ll really steer you to the funds that make sense for you. There are “foundational truths” we all should grasp, but there are many different paths to financial freedom – don’t let anyone tell you there’s only one way to success. And what about taking advice from podcasts? They get into that too. Hear all this great information and more on this episode of How To Money.
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