Should You Follow Every Financial Advice From Your Friends and Relatives?
If there is one thing in the world that costs nothing, it is perhaps giving advice. Think about it: Whether you are at home, hanging out with your colleagues, or just roaming around outdoors, you will be subjected to tons of advice. And when it comes to money, seemingly everyone out there is a financial expert.
Sit with a friend for a while, and you will be bombarded with advice about money. Likewise, this also applies to your family members and relatives. However, if you listen to them carefully and probe further with knowledgeable questions, you will notice that they themselves know little more than you do!
On the flipside, even if some advice is not extremely sound or worth paying attention to, if you analyze it holistically, there might be useful nuggets of knowledge buried deep in there somewhere. That is why it is a worthwhile idea to keenly analyze these tips and advice and filter out any unnecessary details. Take them with a pinch of salt, note down the advice you can trust and what will work for you in the long run.
Similarly, you can also verify the money advice – that which you hear from your relatives and friends – by analyzing if the advisers themselves follow their own advice or if they have sufficient relevant experience to back up their claims.
That being said, there are certain steps that you can take to vet every financial advice that appeals to you. Keep in mind that every seemingly competent advice may not be feasible for you.
If it seems too good to be true, it probably is
One of the easiest ways of analyzing money advice is to see if it sounds too good to be true. If it does, it probably is. This is commonly the case with inexperienced individuals who are keen on dishing out their personal opinions under the guise of sound advice.
When you are presented with a proposition, pay close attention and see if the advice sounds too good to be true or unrealistic. Based on your judgment, decide if it will work for you and if it is indeed feasible. No matter how good a money tip is, if it is not feasible for you, then it is of no good. So, set your preferences and stick to them–don’t be easily swayed by every financial advice that comes your way.