Avoid Taking Money Advice From These People
Just like you, I jump on Facebook to see what’s going on in the world of my friends and family. You’ll see pictures of pets, kids dancing and singing, a meme that it’s Monday, and Mondays suck! You’ll see funny videos, arguments about political views, ads for a blow up burrito couch and you’ll ask yourself, “Why am I seeing ads for a blow up burrito couch?” Seriously, I saw an ad for this. LOL. I'm not going to lie; it looked pretty cool!
But the worst social media posts I see are posts asking for money advice. These drive me absolutely CRAZY! Here are just a few examples of the posts I’ve seen.
- “Is it better to buy used, new, or lease a car?”
- “What should I invest money in?”
- “Should I buy a house or continue to rent?”
- “I finally paid off my dreadful credit card, should I close the account?”
- “Does anyone have advice on consolidating debt?”
- “I can’t afford to go on vacation, but I need one. Should I just charge it?”
Some of these are great questions, but the overall majority of the comments and advice from people are beyond DUMB. Excuse me while I find a wall to bang my head against. Here's the deal: most people have no idea what they’re talking about when it comes to money. Many of them know one thing—how to be broke, have little to no savings, make monthly payments, and live in debt their entire lives. These are not the people I want to take advice from when it comes to my money.
Let me share some statistics with you that will shed some light on why I know this to be true.
Seven out of 10 people live paycheck-to-paycheck. - Career Builder
- This means that 70% of people are one crisis away from financial disaster. A crisis like a job loss, injury, sickness and so on. Not exactly my idea of stability.
Only 32% of people have a working budget and plan for their money - Gallup
- This means that almost seven out of 10 people have no idea where their money is going and don’t have a plan. YIKES!
70% don’t have long-term financial goals that include saving and investment goals. - Gallup
- This means that most people are living for today and not planning for tomorrow! You only live once, right? WRONG!
157 million Americans carry high interest credit card debt. - Gallup
Average credit card balance for indebted households is $16,748. - Nerdwallet
- This means that people are carrying high interest consumer debt, along with paying high amounts of interest. They are making the credit card/retail industry rich and leaving themselves broke. This is a recipe for disaster.
50% of the population have less than $500 in a bank account. - Marketwatch
- Yes, you read that right. One out of two people can’t cover a $500 emergency without borrowing the money. Not exactly my idea of financial security. How about $1,000? More than eight out 10 people don’t have $1,000 or more in a bank account. SCARY!
45% have saved nothing for retirement. - Motley Fool
- Eventually you’re going to retire. But, according to this, almost half of the population feels they will be able to work forever because they aren’t being proactive in saving for their futures. Not a good plan.
I could go on and on, but you get my point. The sad reality is that most people are broke! Do you know what you get when you take advice from broke people? You guessed it. More broke people!
- Would you take gardening advice from someone who has more weeds than flowers in their garden beds?
- Would you take advice about running a marathon from someone who hasn’t run more than a mile?
- Would you take cooking advice from someone who can’t make boxed macaroni and cheese?
- Would you take parenting advice from someone who doesn’t have kids?
Absolutely not, right? Based on the statistics I just shared, when asking for advice, you're likely getting suggestions and recommendations from people who have no idea how to handle money.
A nice car, a big house, and a great income don’t equal financial success.
I find it funny when people say, “They must be doing well, look at that car. And they just built that brand new house!” I'm here to tell you that I coach many people who have really nice cars, big houses, great incomes, and a lot of nice stuff. But many of them are broke because all of that stuff comes with a mountain of debt and payments. They're one missed paycheck away from missing their mortgage payment. Nice stuff doesn’t determine financial stability; so don’t be fooled by the fancy wrapper that people display on the outside.
If you need help with a financial question, find people who are truly successful with money. People who understand basic financial principles like:
- Having a large emergency fund savings.
- Living intentionally with a budget and a plan.
- Living below their means, not spending more than they make.
- Saving at least 10-15% of their income towards retirement.
- Staying out of debt.
- Being patient and saving for purchases.
- Delaying instant gratification.
If the people you're taking advice from don’t practice these basic principles, stay away! Or get used to staying broke!
The financial industry is not in your corner.
My last quick point is, just because someone works for the financial industry, like a bank, an insurance company, a mortgage lender, a real estate agent, doesn’t mean they provide good advice. In many cases these people are just as broke as the rest of society. Also, the advice they give typically benefits them with commissions or profit for the business they work for. Be mindful of the advice you're given when the person giving the advice will benefit if you do what they say.
The moral of the story is, don’t take advice from broke people and stay away from what popular society says about money. Normal is broke! Do you want to be normal or do you want to be successful?