Bad Advice is Available Everywhere, Often for Free
If only it were that easy, right? Shortcuts are everywhere these days. I see lots of different articles and short form videos positioned this way. “I’m an expert, so here is what you need to do.” But how much of that advice pertains to you exactly? Always ask yourself, what is the motive of the person providing this advice? If you are lucky, the information is coming from a caring professional, giving away solid strategies, but they still know nothing about you. What is worse is when this advice is coming from someone who has a vested financial interest in making you believe their advice should be followed. That is when you really need to be on your toes.
It is not uncommon for someone to send me a link to an article, or a TikTok video asking me “is this legit?” I hate to break it to you, but no, there is not a perfect investment vehicle out there that has a guaranteed return and has no downside. And if there was, why would someone be sharing it with the world? Also, there is not a secret list of tax breaks your accountant does not want you to know about, either. The reason your accountant has not mentioned this strategy is that it is probably tax fraud. The amount of bad tax advice out there is quite something.
It is not all bad. What the internet community is great for is information to fix a specific item. I cannot tell you how many appliances I have fixed with the help of a YouTube video made by a professional fixing the exact same thing. But now think about this, how many of your financial questions have been answered by finding a video or article that replicates your exact same situation and/or feelings about money? It is one thing to have the same problem with the exact same refrigerator as JoeBillsFan74. Heck, he was even nice enough to post a video showing us how to fix it! It is quite another to have a reputable source show you how to account for additional taxes due when your Restricted Stock Units vest this year and how that could impact whether you will owe a tax penalty. And then follow that up with giving you advice on what to do with those shares after they vest. Hold them, or sell them off? The answer is, it depends.
The truth is that in financial planning, we do have some rules of thumb. Some of them are good to share. But at our core, we are all different financial planning case studies. Of all the households I have ever worked with, each one has something unique which differentiates them from the rest. This could be their feelings on risk, retirement plans, savings rates, estate plans, tax planning, charitable intent, etc. Each case is different on some level, thus requiring a slightly different approach to each.
As we get older and our attention spans continue to get shorter, we often rely on that small sound bite or short video to deliver a quick solution to a financial question at hand. But how much of this expert advice applies to your situation? If you truly do want to get a strategy that works for you, take the time to meet with a professional. Let them get to know you and your finances. Then let them help you make your situation the best it can be, given your own circumstances. Free advice is cheap and easily available, but oftentimes, it turns out it can be very costly in the long run.
