When we need suggestions or advice, we typically lean on those around us for tips. However, when it comes to personal finance, this strategy can backfire for one simple reason: most people you know aren’t finance experts.
Picture: Brendan Riley/Flickr
As money blog My Life and Finances explains, most people are not quite the financial experts they think they are. In general, it’s good to take advice on any topic from someone who knows what they’re talking about. However, finance is one field in particular that everyone has to deal with, but not everyone understands:
To sum it up, pretty much everyone around you is a financial idiot. They all talk as if they are personal finance experts, but they are not. My number one rule in life is to ignore the financial “wisdom” of co-workers, friends, and neighbours. Many of them are surviving on credit and will never be rich.
Instead, open up a book written by Warren Buffett, Jim Rohn, or Dave Ramsey. These individuals have amassed millions of dollars and have made many friends along the way. Learn their life lessons and follow their success path. Do NOT listen to your broke friends.
That’s not to say that you can only take advice from people who have a degree in personal finance or millions of dollars (and in fact, only taking advice from millionaires can potentially result in some very detached advice). However, it also means that just because someone you trust someone personally, that doesn’t mean they’re an expert in finance.
Try to find advice from people who have a deeper understanding of personal finance or who have education/work experience in the field. If you have a friend or family member that demonstrates good financial habits, then great! But don’t go with their advice just because you’ve known them a long time.