When The Financial Gurus Are Wrong (For You)

I enjoy the Gurus. I enjoy seeing popular media personalities talk about life, living the dream, and hearing their personal views on finance. I’ve read all of their books, listened to their shows, taught some of their classes, and enjoyed almost all of it. More often than not, the general advice they give is pretty good. Or at least, much better than the population of their followers. Most people would benefit from following the baby steps, getting out of debt, or riding a bike. But are all the gurus right for you?

suzeThe great part is everyone has their guru. In the financial community, it’s Buffett, Dave, Suze, C. Howard or even Mr. Money Mustache. They are all in the big game of trying to get financial information to us in entertaining and occasionally educational ways. They build audiences, platforms, and have followers that most small time authors or bloggers only dream about. And they are pretty good. But, are they good for you? Is it even possible for one person to give accurate advice for everyone in the world?

The trouble with gurus is that they have to ascribe a one size fits all approach. To really build a platform, one needs consistency and quotability. It is more important to have a uniform message than to try and navigate all the unique situations that arise in real life.

You are Surprisingly Special
We all want to feel all special inside. We want to feel like our situations are unique and different and new. By in large, the things we have experienced have all been experienced by someone else before us. Someone has been in a similar situation with a positive or negative resolution. We can often apply the general principles of a financial celebrity to our life. We can integrate their suggestions and it will most likely put us in a better position than before. However, there are plenty of times where our own situations are too unique to fall into the generalizable categories ascribed by a one size fits all approach.

If there is anything I learned in my financial planning PhD program, it is that real life can be pretty messy. When it comes to financial planning, situations must often be addressed on an individual basis. Some of the polarizing topics may be adaptive for different individuals. Some of the questions we see involve topics like: Should couples always combine their finances? Is there ever a time when a credit card is useful? Does it make sense to rent or buy? Would leasing equipment or a vehicle ever make sense? Should I pay off my house? If someone has been remarried and in a mixed family household, how does that affect planning? Should I go to college? All of the topics have a default answer. The only trouble is that the best answers are often quite individualized and may need more detail than a 30 second radio conversation.

When They Are Right
For all the love and hate, popular financial gurus are pretty entertaining. The ones that have been around for a while tend to give pretty conservative, solid advice. The financial gurus often prescribe specific sets of advice to a loyal and excited fan base. They also manage to entertain. There are only a select few people in the world that can do a thirty minute segment on Roth IRAs and engage someone who hates dealing with finance. That is a pretty rare talent. Someone that can be entertaining while teaching has a unique and (evidently) quite marketable skill set.

The biggest thing most gurus get right is simply providing a framework to make financial progress. The methodology might be different (Emergency Fund: $1,000? 3 Months? 12 Months?), but the overall outcome tends to move people in the right direction. To some extent, simple awareness brings about the opportunity to proactively discuss change. When we are at a place where our financial picture it not optimized, we can often learn a thing or two from a great financial author or teacher. Simply having a plan, even if it is not perfectly tailored to our specific needs, is often enough to break the inertia and create action. The plans ascribed by the popular gurus have helped millions of families across the country get to a better place financially.

Picking and Choosing
Arguably, you know yourself better than anyone else. Sure, sometimes it is easier to observe in others what we can not see in ourselves. But, in general, we are pretty good at knowing what works and what does not in our lives. Although our situations may feel unique, there are multiple people out there that have been in similar ones. At this point, it is getting pretty likely someone has even written down their approach and posted it online for the world to read. Gathering information is the first step to navigating the challenges we face in life.

The underlying message is this: Think for yourself. It is important to gather information and listen to wise counsel, but in the end, we still need to think for ourselves. We need to be able to take the information we are given, synthesize it, and translate it into actionable progress for our lives. When that happens, we change. We make progress. We learn and we adapt. Our lives get better.

Read the books, listen to the shows, follow the blogs or watch what you need to- then, tailor a plan that works for your life. Take the time to really think through the priorities you have in your life and develop steps to make progress toward your goals. Listen to what the gurus have to say but make sure to think about what they say and how it affects your life. Does the generalized advice that is given put you in a better place financially? Does it make sense for you and your family?

So, which gurus do you enjoy? Who are some of your favorites? Anything you like or dislike about the popular ones? Do they help people or hurt? I enjoy it all and I’m glad there are lots of people out there talking about money and the impact it has on our lives.

One thought on “When The Financial Gurus Are Wrong (For You)

  1. Great post. We followed the dave ramsey baby step system as close as we could. I am sure we could have gotten the same results through another method, but the baby steps worked for us.
    Recently we have started doing our own thing, but still follow the principle of give, save, and live on the rest. The baby step system gets a little vague at the end and those steps play out over a lifetime. I agree the guru’s are great but just having a plan that is not a get rich scheme is the most important part. The more automated and simple the better! I think dave is the best, safest, easiest to follow. We still follow the steps. Mr. Money mustache seems like the coolest financial guy out there but he has lived a great risk great reward lifestyle and is deffently not for everyone.