There are a lot of people dispensing pieces of financial advice on social media platforms that you would think is a good thing. On the surface, it seems like a good idea with the reach of most social media platforms. These applications can bring any content to millions of people in just a matter of seconds. But the question now is how truthful these pieces of content are.
There is a lot of advice out there for almost any type of financial problem or goal you might have. And social media platforms are helping push these to a lot more people. The reach and speed by which the younger generation consumes information from social media are beyond what traditional media was able to accomplish in the past.
The sheer amount of advice you will encounter online makes it a lot more important to discern pieces of financial advice. You might come across a foolproof way to invest your money and earn so much in such a short time which is really enticing. But you need to be wary because if investment products seem too good to be true, it is probably too good to be true.
The challenge is how to identify useful advice from those that will only put you in a more difficult financial situation. This is the last thing you need if your finances are already in the red. CNBC shares that the average American is over $90,000 in debt already. You do not have the luxury of choosing whatever you fancy. A tiny mistake can send your finances plunging down into more debt. Here are a few of the things you can look into to help you understand the money advice you get everywhere.
Everyone has their own agenda
As try to discern pieces of financial advice, one reality you need to keep in mind is that everyone has their own agenda. When you realize this, you will see things in a different light. As you go through one advice after the other, you begin to look past the advice and understand the one giving it. This the way to understand the advice better.
If your parents are giving you money advice, there is a good chance that they simply want you to succeed. But remember that they could actually be talking from dated experience. On the other hand, an insurance agent could present you with better options but understand that they are pushing financial products as a way for them to earn money as well.
From here, it is not enough that you figure out the agenda. You need to balance them in a way where you can come out on top. Old pieces of advice can still work and insurance is something you also need at present. To help you make a decision, you need to make sure you understand your current situation so you know what you need at the moment.
Know what your goal is
There are times where you need to clearly define what your end goal is to help you choose useful pieces of financial advice. When you come across a piece of advice that you feel is an excellent way to help you move forward, make sure that it is pushing you towards reaching your goal. When it comes to your progress, your direction is just as important as the speed by which you accomplish it.
This is the reason why you need to always keep your eyes on your goal. You might come across a way to help you buy your first property but in reality, your immediate goal is building up your emergency fund. If you put your money into buying a property, your money is now tied into that asset. When an emergency happens, it might be difficult to access the money you need.
Investing in a property is sound financial advice if your goal is to increase and diversify your investments. But that will not help your goal of strengthening your reserve fund. This is one of the reasons why you need to clearly define what your financial goal is. Once you do that, this can keep you on track when making decisions.
There is no one solution for all financial problems
One of the many mistakes people make is that they look for pieces of financial advice that promise to solve a current problem they have. This is one of the primary reasons why you could lean towards one certain advice over the others. The result it gave other people is exactly what you need that is why you follow the advice to the letter.
The problem is that your current financial situation could be different from the ones dispensing the advice. If it worked for them, keep in mind that it might not work for you. It is not only the financial situation you have to think about. Your financial habits will also come into play. These factors will affect how effective a piece of advice will be for you.
If the person shared how they made a fortune in flipping real estate, that strategy could have worked for them. But they might already have an extensive network of people they can sell to or a background in real estate. They could also be driven by an intense financial need due to past experiences. But if you are coming into that industry not knowing anyone to sell to or half-hearted because you just want to try it out, you might not have the same drive to succeed It is important to always factor in your personal situation when considering advice from other people.
Look for pieces of financial advice but know that you are in control
One important aspect in this whole conversation that you need to remember is that you are in control. You can go through, read, research about a hundred different types of advice from different people. They could all look promising showing results how it helped them get out of debt or build a massive fortune for their retirement. Especially that Business Insider shares how a 65-year-old retiring now would need about $1.6 million in their investment account to live on $65,000 per year
When you see how it helped other people, it can entice you to try and do the same. And there is nothing wrong with it. You can definitely try and see if it can do the same for you. But remember that your financial situation is different from that of other people. This means that pieces of advice you get from them might not work, yield the same results, or even give you better ones.
One crucial thing to always remember as well is that at the end of the day, you are always in control. You can choose which ones to follow. No one can force you to do what they do. They can make a compelling case complete with all the positive results their choices have given them. But when it comes down to it, it is still your decision to make.
You will come across pieces of financial advice from different people coming from various walks of life. It can come from your family, friends, banker, insurance agents, and even finance professionals. In all these, you need to choose who to listen to and what advice to take. Always consider that you have a unique financial situation and keep your eyes on your goal. These can help you discern what advice to take on and what to pass up.