Have you ever sat around a dinner table with extended family, maybe Christmas or a get together, and there was a stage when the conversation got to money or investing?
Might be a story about someone who just bought a property, someone thinking about shares, paying off a debit or credit card.
I've been in these situations and found some perspectives people have are fascinating. I've also found that people are VERY willing to give their suggestions on what to do based on their “expertise”.
- That uncle who says you should buy a property as soon as you can cause that's the only way to get ahead.
- The cousin who takes “advantage” of the store cards that give you months of interest free payments.
- The grandpa who tells you off for spending more than $200 on a holiday and mentioning back in his day he would go 10 years at a time before having one.
I'm not sure if you've experienced input from the family like this, and I know they are trying to be good-willed. But there is so much financial advice shared that should be absolutely ignored.
I've realised there are certain people we should and shouldn't be taking advice from.
Lately I've been building a few guidelines for how I know if it's worth taking advice on this from a certain person or not.
Here is my list of people I won't be taking advice from:
People who start their recommendation with the word “just”
They say things like
- Just get a credit card and buy it
- Just do it, worry about it later
- Just save for 40 years and buy it then
- Just do what I did
Anyone using the word just I find is mostly trying to move the conversation on, so it's likely their advice is rushed and dismissive. They also are unlikely to have understood your situation completely, so are just thinking from their own perspective.
People without the experience
Never seek advice from people that haven’t done what you are about to do.
I feel I can talk to people about buying property cause I've done it. I don't talk to people about investing in bitcoin cause I don't do it.
It's that simple to me.
Anyone you wouldn't want to switch places with
I look at the person who gave me advice and works out if I would want to be in their position now or soon. If not then they aren't aligned enough with my values and probably don't understand the way I want to decide.
So who would I take advice from?
People who empathise
Empathetic people will ask you questions, try to label or relate to your situation. They'll seem interested in finding a solution, not because they feel obliged but because they genuinely want to provide help.
They also won't judge you from being in the situation you are in.
People who offer me advice last
These are types who will challenge you, your current decision-making process and current dreams. They are curious to know how serious you are about your financial decisions and what you will do to make them happen.
These two types of people in the past for me at least have been helpful.
How about you, been in a situation of receiving advice that you feel unsure about?
Are there any types of advice you definitely steer clear of or appreciate?