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The Dangers of Relying on Entertainers and Influencers for Financial Guidance

Be careful not to confuse entertainment with financial advice.

There is no shortage of entertaining financial gurus, such as Dave Ramsey, Robert Kiyosaki, Suze Orman, and Jim Cramer who are touting financial advice, which is labeled as “not advice” for regulatory purposes. These recommendations, which would be better labeled as “financial fiction,” are okay at best, and downright dangerous to your wealth at worst.

Meme about financial advice

In a world where 80 percent of Americans, between the ages of 18 and 41, admit to relying on social media financial advice from these and other lesser-known influencers, this is an increasingly significant problem. This is the wealth equivalent of the Tide Pod challenge from a few years ago. Below are only a few notable examples:

Dave Ramsey: During his radio show, Dave Ramsey recommended an eight percent withdrawal rate to his listeners. A withdrawal rate refers to the amount of money you can safely withdraw from your accounts during retirement, which is typically estimated to be four percent, or half of Dave’s suggestion. If you were to follow this entertaining suggestion and withdraw eight percent a year, then I would highly recommend that you also update your resume for when you have to go back to work during your twilight years.

Meme about Dave Ramsey advice.

Robert Kiyosaki: Another popular entertainer in this space is Robert Kiyosaki, author of the personal finance favorite “Rich Dad, Poor Dad.” Let me start by saying that I’ve never read his book, but unfortunately for me, I have read too many of his social media posts and articles. A few highlights include advising people to take all their money out of banks before the entire system collapses, investing substantial sums in gold and silver, telling people that their house isn’t an asset, and referring to the 401k account as a “horrible” retirement plan. These are only a few of the lowlights from someone who has millions of social media followers, a lot of whom are likely taking these suggestions seriously.

Suze Orman: Suze once described having two million dollars as “pennies in today’s world.” This level of inaccurate information, gross exaggeration, and blatant fear mongering does little to help everyday Americans who are trying to improve their financial lives.

These are only a few examples of which there are countless others, and although I understand the appeal of free and entertaining information, you are getting exactly what you are not paying for.

Instead of turning to entertainers, find a financial coach below who is a Certified Financial Planner and also happens to be engaging and entertaining. It will be well worth every penny!

Disclaimer: The information in this post is provided for your convenience only and is not intended to be treated as financial, investment, tax, or other advice. The information is intended to be educational and is not tailored to the investment needs of any specific individual.  It is also not intended to be relied upon as a forecast and is not an offer or solicitation to buy or sell any securities or to adopt any investment strategy.  The opinions expressed are those of the author.  Reliance upon the guidance and information in this presentation is at the sole discretion of the individual.

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