There’s no problem in taking advice from loved ones. However, finances are another thing. What works for others might not always work for yourself and you could put your finances—and your future—at risk. Here are some considerations you might want to take in mind before taking any financial advice from another person.
Do They Have the Knowledge and Expertise?
In the same way that there are trained professionals for plumbing (plumbers) or bodily ailments (doctors), there are also experts when it comes to personal finances and financial advice. Have they had the necessary training and experiences to guide other people when it comes to finances? This is important because what might have worked for them might not work for you.
Do They Share Reliable and Accurate Information?
Talking about stocks, finances, and investments is very common these days. You’ll want to make sure that you are getting reliable information. Always make sure to do your due diligence and research before acting on any information or advice that you hear. Beware as well of tips that you get from anyone who claims to be an insider as these rarely pay off.
What Motivates Them to Give You Financial Advice?
“Free” financial advice usually comes at a cost. You never know if an agenda (or a product) is being pushed behind it. For example, someone recommending a specific investment may be sponsored or have invested in the company themselves. This is way different from people recommending a great burger joint. Your hard-earned money deserves to go to a place that is trustworthy and reliable so that you don’t jeopardise your hopes and dreams. The advice may be well-intentioned, but blindly taking advice from loved ones without considering your own objectives may lead you to miss out on great opportunities.
Is It in Alignment With Your Principles, Purpose, and Position?
Principles are your values, Purpose reflects your objectives, and Position shows your current financial circumstance. The way you decide on your finances should reflect your present, as well as your desired future. Make sure that the person giving advice is really understanding where you are at the moment. A good sign is if they ask questions to clarify your current situation instead of pushing for their ideas. An expert financial adviser will make sure that they understand your profile, your habits, as well as your long and short term goals, and will give you the appropriate advice to get there.
We hope that this article proves to be useful when it comes to helping you discern bad financial advice from financial advice that you can count on. For the most part, you’ll want to make sure that you only take advice from experts who are trained in this field. Experts make sure that they have an accurate picture of your current financial situation, which they will then use to create an effective strategy that will help you achieve your financial goals. Be sure to keep everything that you’ve learned here so that you can make the most informed decisions possible.
Make smart financial decisions with the help of Swell Financial Planning. We are a financial consultant in Queensland that aims to work with you as you learn more about investment, insurance, budgeting, cash flow and more. Consult with us today and secure your future tomorrow.