It seems like everyone from bloggers to your next-door neighbors doles out financial advice these days. It can be difficult figuring out who to believe, and bad tips can pop up as frequently as thunderstorms in the summertime. In fact, some seemingly sensible advice can turn out to be a bad idea of the highest magnitude, and some “conventional wisdom” really isn’t. Even widely held beliefs can turn out to be bad or financially dangerous.
The other day I was in the locker room at the health club and overheard an interesting conversation. One gentleman was “advising” a friend of his on some financial strategies. As I listened, I was at one point amused, another point stunned, and finally left resigned to the fact that we are living in a period of changing financial rules or at least there are some that don’t get it.

The conversation started with Joe (I have no idea what his real name is), asking Peter (again, no idea), how he could make some extra money. Peter advised him to contact a company evidently he works with delivering drugs to senior citizen homes. “Is it good money?” “Yes” was the reply plus you can write off your car, your home and get a tax refund at the end of the year.  Wow, wow and double wow! (By the way ‘good money” was later defined as $12-15/hr). 

I don’t know if you see the multiple errors here but it indicates to me that financial intelligence is a class that should be taught in high school. As I reflected on this conversation a couple of the things that leapt out at me: 1) two moderately successful (at best) giving advice to each other, 2) passing on “tax advise” just seems inappropriate if not downright dangerous, 3) planning on getting a tax refund is just plain bad advice.  I’ve also asked myself what would have happened had I intervened? Would I have been able to create credibility? Would they have listened? Is this an example of don’t confuse me with the facts, my mind is already made up? Would they have resisted because….

The BIG lesson here is that we should be very clear who we are taking advice from and make sure they are knowledgeable AND have our best interest in mind.

This commentary on this website reflects the personal opinions, viewpoints and analyses of the Gainplan LLC employees providing such comments, and should not be regarded as a description of advisory services provided by Gainplan LLC or performance returns of any Gainplan LLC Investments client. The views reflected in the commentary are subject to change at any time without notice. Nothing on this website constitutes investment advice, performance data or any recommendation that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person. Any mention of a particular security and related performance data is not a recommendation to buy or sell that security. Gainplan LLC manages its clients’ accounts using a variety of investment techniques and strategies, which are not necessarily discussed in the commentary. Investments in securities involve the risk of loss. Past performance is no guarantee of future results.