Personal Financial “Advisors” and Self Help “Financial Coaches”…What so many people already knew…

[Coronita]

..and what a sham the industry is….

Lol. A long time ago (maybe 10 years ago), I went with my friend to a “financial seminar” that was run by Robert K and crew. Oh boy…And it was no more than a high pressure sales pitch for a bunch of financial anti-genuises to buy his financial education products…And it works, because the majority of the folks were in the room sounded really desperate….

Imho..the downfall of most people when it comes to money management is not taking matters into their own hands but counting on others to do it for them…Well at least for the folks that aren’t lucky enough to be born with or marry oneself into a silver spoon.

Behold the “do as I say, not as I do mantra” of some of these financial “educators”…

http://finance.yahoo.com/blogs/daily-ticker/don-t-money-advice-suze-orman-dave-ramsey-122754956.html

Don’t Get Your Money Advice from Suze Orman, Dave Ramsey: Pound Foolish Author

Few people know how to manage their personal finances effectively. That’s why we spend millions of dollars every year on books and seminars that tell us how to get rich quick and get out of debt.
Suze Orman, Dave Ramsey, Robert Kiyosaki and David Bach are just some of the best-known personal finance experts advising and lecturing indebted Americans about their foolish and short-sighted money decisions. Yet these are exactly the individuals that the average person should not be listening to for financial solutions according to Helaine Olen, author of the new book “Pound Foolish: Exposing the Dark Side of the Personal Finance Industry” and former editor of the Money Makeover series in the Los Angeles Times.
In an interview with The Daily Ticker, Olen says these financial gurus either offer platitudes or “dreadful” advice that don’t apply to most people’s lives or situations.
“The idea that anyone can give specific advice to millions of people first of all doesn’t really work,” she says. “We’re not archetypes.”
Most Americans are under serious financial strain and the advice “parroted” by these so-called experts is “easier said than done,” Olen argues.
The stats Olen uses to paint the economic picture of a typical American is alarming: Americans have less than $100,000 saved in dedicated retirement accounts and 43% of Americans are living paycheck to paycheck. Salaries have stagnated and Americans’ net worth has fallen nearly 40% between 2007 and 2010.

Moreover, people don’t rack up thousands of dollars in credit card bills because they buy too much, she says. Unexpected and costly medical emergencies, divorce or long bouts of unemployment are the main reasons Americans find themselves drowning in debt.
Ending such indulgences as daily Starbucks lattes (recommended by David Bach) or buying one or two or three homes with zero down (promoted by Robert Kiyosaki) are exactly the tips that have steered Americans in the wrong direction and provided false hope to many desperate individuals.

Olen takes particular umbrage at the assertion that one can become a millionaire by putting all of their savings in the stock market. Suze Orman has promoted this suggestion before on CNBC and in her numerous books, but Orman has admitted that she rarely invests in stocks and prefers the safety of municipal bonds, according to Olen. Equities are extremely volatile and rarely provide the 12% annual return that Orman and Dave Ramsey tout for people looking to quadruple their income, Olen adds.
Olen does agree with the overall message promoted by most personal finance experts that Americans should pay off high-interest credit cards and reduce their overall debt burdens. But she insists that there’s no one size fits all solution. Instead she says society needs to change its attitude toward money and encourage more frank, candid discussions about debt and saving.
Olen purposely avoids making her own personal finance recommendations in “Pound Foolish” but does proffer one tip she’s learned over the years as a personal finance journalist: invest in market index funds. They won’t make one rich but they offer the best return with the least amount of risk, she says.

[scaredyclassic]

Good idea for a book.

I just bought one similar for strength called lift with your head by chip Conrad. His position is the entire fitness industry is full of crap too.

Everyone is full of crap.

Except I guess just before my colonoscopy.

[Coronita]

[quote=squat300]Good idea for a book.

I just bought one similar for strength called lift with your head by chip Conrad. His position is the entire fitness industry is full of crap too.

Everyone is full of crap.

Except I guess just before my colonoscopy.[/quote]

lol.

[jmrrobbie1]

After the Bogel-Head group & Vanguard Investments a great resource for personal investing was writing by William Berstein – “The Intelligent Asset Allocator”. The problem – it was above the vast majority of the American public to comprehend, let alone do some of the basic math. Berstein had to dumb it down and rewrite the book – “The Four Pillars of Investing”, which to a degree lost some of the basic focus of self portfolio management. Still obvious we are a herd mentality – when it comes to investing, portfolio management, or even buying property. He has a great take on financial advisors in the first chapter – a great read. Also recommend his website the “Efficient Frontier”.

[The-Shoveler]

I am waiting for someone to come out with a course on getting rich buying storage lockers,
I have seen every episode of storage wars and I am hooked.
Just kidding sort of,

But this little bit is the one thing I have been told for the last 25 or more years and it is the one thing I had wished I listened to.

“invest in market index funds. They won’t make one rich but they offer the best return with the least amount of risk”

Gordon Gecko I am not.

[jmrrobbie1]

Berstein”s latest focus – a series of e-books:

http://www.efficientfrontier.com/IFA/ifa1.htm

[scaredyclassic]

I think today I am officially too old to invest in the future.

[jmrrobbie1]

Usually comes down to risk -reward…kind of like marriage.

[SK in CV]

I agree with most of your criticism. What most of these “gurus” prove is that a good way to get rich is to come up with a good presentation that people will pay for. Whether it’s a radio show, or books, or personal appearances. Other than Suze Orman, I don’t know much about the others, but she spews mostly worthless BS. It became pretty obvious the first time I heard her more than a decade ago, when she started in on her silly “dollar-cost averaging” method of investing.

As you said, the most reliable way to end up with a million bucks is to inherit $10 million.

But I think you wrongly malign “life coaches”. Most life coaches don’t meddle in financial affairs. My SIL is a certified “life coach”. I do think it’s silly and cultish, but there are some people it probably benefits.

[scaredyclassic]

I would like to hire an Olympic lift coach this year. I would like to learn how to snatch and clean and jerk.

[no_such_reality]

Owen needs to remember what some Grandma’s used to say.

Point a finger and three point back at you.

Frankly, the daily latte sipping, why am I dreading my monthly credit card bill is the real target market of the three main speakers identified.

As for the excuse of the 43% living paycheck to paycheck, divorce, illness, well, it’s an excuse. In the end, their problem is really simple. They live paycheck to paycheck and don’t have skills to make more than that.

And yes, ironically, very broad based advice really does work for them. Orman at a basic level is really simple, can you afford it. Have you done the thing you should do (housing, insurance, retirement) before you start spurgling.

Mr. K has steadily gotten sleasier, IMHO, but his first basic premise and book was also equally simple. You need to work hard to get some money and then work hard to have the money work for you. While a big part of it was platitudes, one simple line in it was worth the price of the book. In a possibly fictional accounting of discussing an early rental with his mentor ‘rich’ Dad, the RD ask “how many of those can you do before you’re broke?” It was scenario where the rental was costing him something like $100 month. Again, a good insight into preserving capital and cash flow.

As for DM, I’ve never read his stuff.

And I disagree with Owen, many people are much less wealthier than they should be because they pursue instant gratification instead of financial security.

[Coronita]

[quote=SK in CV]I agree with most of your criticism. What most of these “gurus” prove is that a good way to get rich is to come up with a good presentation that people will pay for. Whether it’s a radio show, or books, or personal appearances. Other than Suze Orman, I don’t know much about the others, but she spews mostly worthless BS. It became pretty obvious the first time I heard her more than a decade ago, when she started in on her silly “dollar-cost averaging” method of investing.

As you said, the most reliable way to end up with a million bucks is to inherit $10 million.

But I think you wrongly malign “life coaches”. Most life coaches don’t meddle in financial affairs. My SIL is a certified “life coach”. I do think it’s silly and cultish, but there are some people it probably benefits.[/quote]

I meant “Financial Coaches”…. 🙂

Corrected…

[Coronita]

If I were a financial advisor, I would be advising the following

1. Don’t spend more money than you make.
2. Invest in high returns low risk investments.
3. Don’t lose money investing.

And if you want to know how for #2 and #3, buy my seminar for $2999.99….

[an]

The author lost her credibility with me with this statement.

[quote=flu]Moreover, people don’t rack up thousands of dollars in credit card bills because they buy too much, she says. Unexpected and costly medical emergencies, divorce or long bouts of unemployment are the main reasons Americans find themselves drowning in debt.[/quote]
These unexpected cost will only hit you hard if you didn’t save up for it to start with or have proper insurance. Although I don’t agree with everything Orman or Bach said, they have the right premise. Spend less than you earn. Especially Bach with the Latte factor. I’ve read his book and make perfect sense. It’s not that hard to save when you live well under your mean. When you do that, along with proper insurance, their unexpected costs will not affect you as much if at all. I like the “Can you afford it” portion of Suze Orman’s show. Her message those those callers and viewers is that, don’t buy junk unless you can truly afford it and already have your savings and retirement set. Her stock tips is as good/bad as anyone else.

[UCGal]

I’ve read a lot of the folks listed’s books. (checked out from the library, because I’m cheap.)

I think Suze Orman and Dave Ramsey serve some value to the masses… You know the folks who feel entitled to spend, even if they don’t have the income to support it. They’re both (especially Ramsey) about paying down your debt, living within your means. And they are good at dumbing it down to platitudes that the less bright can understand.

The rich man/poor man guy puts too much emphasis on real estate… but his premise of using your money to get more money is good.

I read over at the bogleheads forum some. There are some very astute folks over there. But like any public message board (including piggington), you need to read, filter out the bs, and make your own decisions.

I read a lot more over at the early-retirement.org message board. They are totally about educating yourself to invest your own money. Some are active investers, some are strictly passive investors… but the boards leanings are to two philosophys – do it yourself investing to save on advisors fees. And living below your means (LBYM) is the best way to amass a nest egg to allow yourself to retire early.

I’ll continue to read these types of books. My favorite for overall financial advise (not just investing) was The Wealthy Barber. I’ll continue to check them out from the library rather than purchasing them because I’m practicing the LBYMs lifestyle. LOL

[Author]

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