Know where your advice is coming from (and a RANT) – sos092

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Watch your stepJon White shares a story of how someone gave really bad financial advice to a young couple. You can read his post here: http://jwfinancialcoaching.com/who-are-you-taking-your-advice-from/

He and I agree, there is a lot of advice out there that will lead you to make bad decisions with your money.

Jon and I talk about

  • How Financial Coaching is working together on your daily decisions and beliefs about money
  • How there is a ton of miss-information out there that can lead you the wrong way
  • Don't just take someone's word for it, not even ours. Seek good council and decide what is true for you

If you spend time listening to personal finance podcasts then I recommend filling your airtime with Jon's shows. He is a trusted resource to help you get a new perspective on your money.

I go on a rant

One of my jobs is to help you expose manipulative messages from those trying to get to your money. Here are some examples of headlines and articles that go too far in trying to get your attention:

  • Helaine Olen's article: Retirement: Election No-show
  • A local newsmagazine in the mail. The headline read: “Which of these 7 Health Problems do you have?” Wow. I don't feel sick but maybe I've got something.
  • The sales-pitch (I mean subject line) in this message from my bank:
Prestige of buying power lie

Now I can have the PRESTIGE of more buying power! Really?

Or this irresponsible advice

Liz Weston answers a question from the father of a debt-free college grad that has a paid-for car with $8,000 in savings and a job how to buy a house. The grad wants to buy a foreclosure but the bank says she doesn't have a credit score. She advises the grad to

  • Keep charging on her credit card every month
  • Use no more than 30% or so of the credit limit
  • Pay it off in full every month

That's all fine-and-dandy. It's the traditional advice of a person who wants to help someone build their credit score. It's a more complicated way than paying cash because she is supposed to “use no more than 30% of the limit” – I don't want to have to constantly be doing THAT math every time I swipe and there are many more down-sides than up. Just miss one payment and tell me credit cards are a good idea.

Then she goes on to say “To speed things along, the dad might consider adding his daughter as an authorized user on one of his credit cards“. So now we're tying our adult child to her parents again. Hmmmmm.

But here is what gets me the most heated: Liz Weston says “Get a second credit card because having a couple in the mix can really help or consider getting a small installment loan.

WHAT???!!!!

Driving a young, debt free and impressionable girl into debt? Is this really the only advice we can give her? Why wasn't the caller informed about alternatives methods to buy this house? Why is being debt free and staying that way so darn wrong?

Selling you something

Here it comes. I'm going to sell you something. You knew it was only a matter of time.

I'm putting my money where my loud mouth is and doing the next giveaway. I have to sell you something though: The idea that I can get you on the right path to financial peace. If you believe I can help then listen to the entire episode for details.

If you aren't convinced I have the right plan for you then you need to go over to the 720 Credit Score website where they will sell you a credit score building program for $1,000, or offer you four easy payments of $297. Trust me, I can do much more for you for a lot less than that.

Where are you getting your advice from?

Thank you for reading the entire post. Within my articles and audio recordings (podcasts) you know where I'm coming from. You also know who I “run around with”:

I'm proud to be associated with each one. So, where are you getting your financial advice from? I can answer your call for help with a simple moneyplan, you just need to pick up the phone.

 

Get Out Of Debt with the Debt Movement, Interview with Jeff Rose - sos091
Why your paycheck is smaller and 2013 Payroll Tax Cuts - sos093

12 Comments

  • Jon White

    Reply Reply January 9, 2013

    Steve thanks for having me on the show. I had a blast talking about this topic. This might be one of the most important financial topics that no one really talks about because who you get your “advice” from probably impacts how you view debt, saving, and spending your money. I know this has caused me to look at who I am getting my advice from whether it is harming or helping me.

  • BradChaffee

    Reply Reply January 9, 2013

    Nice rant dude! And yes, you know how we roll. haha! Debt is for suckers! And the more I read from Liz Weston the more I realize how little I like her or her advice. 
     
    “Credit scores are really important in today’s life.” <~~ This was also what she said at FinCon and it drives me bananas whenever someone says it. It’s only important if you make it important but it doesn’t have to be. 
     
    We’re going to have to get that movement rolling bro. I think it is our duty to counter the nonsense “experts” continue to spew about credit scores. Perhaps after this debt movement is over we can get more serious about making it happen.

    • Jon White

      Reply Reply January 9, 2013

      @BradChaffee  Brad, I’m so glad there are people like you and Steve out there sharing the truth about the credit score and how you don’t nee done if you don’t plan on borrowing money. It’s amazing how many people get sucked into the “I need a credit score to survive” mentality and they never question it at all.

      • MoneyPlanSOS

        Reply Reply January 10, 2013

        @Jon White  @BradChaffee 
         
        I’m under no illusion that credit scores are important to a great many people. It does make it cheap and easy for a bank to rate you for a mortgage. The real problem here is:
         
        1) It’s not the ONLY way to buy things
        2) FICO scores are not a true representation of someone’s financial health
        3) It is used for more than just the purchase of a house (ie: credit cards, car loans, RENTING AN APARTMENT FOR HEAVEN’S SAKE)  
        4) So many people preach the “build” part of a credit score that it takes focus away from doing smart financial moves – like cutting UP the credit cards instead of “maximizing your utilization rate”
         
        I’ve learned the truth about credit scores: You can have a good one if you simply pay your bills and debts on-time, no strategic planning necessary, or that you can have the perfect one (ZERO) if you just pay for everything.
         
        And we have eCredable to help in the case where we are fiscally responsible, debt free, have no credit and want to get a reasonable loan for a house. Credit scores are important to a great many people because that’s what they have been lead to believe. I used to be one of them. Now I’ll just be debt free.

  • GoStumpy

    Reply Reply January 9, 2013

    Thankfully I found your podcast pretty much first, so I’ve had great advice to start turning my financial life around.  Over the years I had fallen trap to almost every consumer-credit marketing available, from no interest for 12 months to consolidation loans to the ‘dream’ of having a line-of-credit. 
     
    Just a bunch of hooey!  The real advise should have been to save up & live within my means!  Society today tells young impressionable people that saving up is near impossible & borrowing money is the only way to get what you want nowadays.
     
    I’m proud to have finally ‘got it’ and have stopped digging, and have finally started looking for a rope to get out of this hole!
     
    Thanks again Steve!  I look forward to working with you in the near future

    • Jon White

      Reply Reply January 9, 2013

      @GoStumpy I’m glad you found Steve’s podcast as well Stumpy. It’s so important to learn this stuff the right way the first time. It’ll save you time, money, and headache down the road!

  • JustLivingLife

    Reply Reply January 10, 2013

    I have never listened to the person you mention in your rant, so I am just going off of your description. But taking money out of Social Security (which is an insurance program) and investing it in the stock market is, indeed (in my opinion) “turning it over to Wall Street”. Even if you have choices, even if you put it in an index fund – you are still taking a guaranteed fund (that backs an insurance program / safety net) and putting someplace where its security will be based on the companies in the stock market (Wall Street). I have been listening to your podcast for over a year, and have enjoyed your personal finance advice. However, today you veered off into politics, and I can find better political information elsewhere. You lost a listener today.

    • MoneyPlanSOS

      Reply Reply January 10, 2013

      @JustLivingLife Wow. I don’t know how to reply to your comment. I respect your opinion and your desire to listen to something else. God bless you.

  • BradChaffee

    Reply Reply January 10, 2013

    In other words, Steve, you were good enough to listen to for a year but since your political opinion is different than his/hers then your advice is no longer good.
    I have a lot of left leaning friends that I disagree about politics on most everything but I do not base their value to me as a friend or professional on their political opinion.
    I’d rather not have readers that make judgments like that but it’s a shame that people can’t just learn to disagree sometimes and continue to enjoy the relationship.
    Politics and money are going to come up from time to time especially on a personal finance blog and especially at a time when the government doesn’t have a budget, isn’t addressing the out of control spending, and wants to raise the debt ceiling all while raising taxes on everyone.

    • JustLivingLife

      Reply Reply January 10, 2013

      @BradChaffee Not at all. I still respect Steve’s personal finance advice – that is why I listened to his podcasts up until now. I also respect his political opinion (whether or not I agree with it), but if he chose to start a political podcast and I didn’t agree with his views, I probably wouldn’t listen it – why would I when there are so many out there that I do agree with? Likewise, if he wants to vent political views in his personal finance podcast, then I don’t need to hear that, either. Everyone is entitled to their own opinion, and can express them however they choose. I thought Steve deserved knowing why he lost a listener.

    • MoneyPlanSOS

      Reply Reply January 10, 2013

      @Brad_Chaffe I can’t judge JustLivingLife – he/she was passionate enough about the subject that he/she had to leave a comment. That’s exactly what I did with Helaine Olen’s post and it caused me to rant about it in the podcast! (And, Brad, I might note that you felt passionate enough to leave a reply. Thank you both for listening!)
       
      But I am a bit confused here: When did I bring up political views? I was talking about someone’s tricky use of adjectives and verbs in order to twist the truth and sway YOUR view of a financial subject (Social Security) and her 3-degrees-of-separation attempt to sway YOUR vote. Not once did I mention who I supported or voted against (go back and start listening at the 25:05 mark). Sorry if I didn’t make it clear enough in the recording.
       
      It’s a good thing I have an edit button and know when to stop recording.

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