February 12, 2016
The Blind Leading the Blind?
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.
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