Four Types Of People You Should Never Take Financial Advice From
It is baffling to see how people claim to be experts in a field with barely any knowledge of the subject. While that bragging by them might not be doing them any good, it might cause harm to others. For instance, if someone claims to be a healthcare expert and you take medical advice from them, it might affect your health. The same is the case with people who claim to be financial advisors, while lacking knowledge on the subject.
Taking money advice from such people will not just impact your financial health but also risk your future. They are nothing short of a self-declared financial planning advisor, advising you on which stocks you should target or how you should manage your money after retirement. Guess, they seem to be some licensed advisors. But, you must be careful with them. Below are four kinds of people you must avoid taking financial advice from.
Your Buddies And Your Colleagues
Your friends and colleagues are those people whom you spend maximum time with, aside from your family. If you have stuck to the same company for years, your co-workers almost become your family members due to the closeness and camaraderie you guys share. Even though they are very close to you, it doesn’t imply that you have the ability or eligibility to advise you on financial matters. Of course, they might have a certain idea about how much salary you receive at the end of the month or how much you are saving. However, they don’t probably know your financial planning or the goals you need to attain.
Though you might share your personal financial details with your close buddies, they have no idea about the details to suggest to you. Have they seen your balance sheet or know what you discuss at home? Perhaps, no. They will never realize what kind of an emotional attachment you have with your money. There is no harm in listening to any constructive ideas that come your way. Maybe some of your colleagues or friends have gone through a similar situation before you. Pay heed to them, but do things which you think are appropriate.
The members of your family would have a good deal of idea about some of your life’s deepest as well as darkest secrets. Therefore, it’s pretty obvious for them to think that they come up with a solution to any problem that you go through. They are very close to you, and it’s pretty normal for them to think so.
The approach of a professional financial planner is completely different than that of a family member. They work like a therapist, and that’s why they don’t have any stake in whatever financial decisions you take. Their objective is to help you get on to the actual path that will take you close to your monetary goal. In a nutshell, good advice doesn’t always come from familiarity.
People Who Are Richer Than You
These people have or seem to have more money than you do. However, this doesn’t at all indicate that they are better off financially than you are. You might not know, but tremendously rich people also seem to make poor financial decisions. The only advantage is that they have a backup, which would help them with a faulty financial decision. You don’t.
They might also have tons of money in their banks, but you never know how much debt they are drowned in. Aside from that, you also have no idea where has all their wealth comes from. So, never assume that if someone is richer than you, it will give you the exact monetary advice you need. You have to chalk out a financial plan based on your income, expenditure, and assets.
Those Who Sell Financial Products
People who deal with finance all the time or work in banks, are not the ones who would give you the perfect advice. What’s the reason? According to a survey, 46% of the people in the United States think that financial advisers should have legal authority. There arises a conflict of interest since they sell financial products on commission.
These were the four basic categories of people you should never take any financial advice from. Nobody knows your financial situation better than you. You can take suggestions, but always take them from a professional who has the industry expertise and understands your financial goals.
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