Should You Trust Financial Advice on Social Media?

The reality is, social media can be a fantastic starting point when it comes to getting an education, a financial education on top of that. But it probably shouldn’t be the ending point either. Watching a video about a Roth conversion or retirement income can spark your curiosity, but applying those strategies properly still requires personalization, and that’s something that social media can’t give you.

Social media can get you started and give you an idea about the difference between A and B, but can they get you to see how it will work for you? The thing is, everybody’s situation is different. Your situation, my situation, everybody out there, you’re not going to find two exactly identical situations out there. Believe it or not. It’s like it’s like finding a twin. They always say that everybody in this world has a twin or doppelganger, but I haven’t found mine yet, have you?

A real plan personalized to you is what social media cannot give you. Only a financial advisor can do that.

Good Things About Social Media

Because of social media, today people are much more willing to talk about issues that were formerly taboo. For instance, debt.

For a long time, people in debt carried a lot of shame, so much so that people didn’t want to admit it. People didn’t openly discuss credit card debt, student loans, or financial stress. Social change has been brought about by social media. There are complete communities where people share their debt journeys and how they paid it off. Budgeting wins.

Admitting financial mistakes publicly helps people open up. That openness has helped many families realize that they’re not alone financially. I mean, social media has made money conversations healthier by removing the stigma around financial struggles, because a lot of people are struggling out there and it’s a shame. I mean, the dollar menu at McDonald’s isn’t a dollar menu anymore. The dollar store is now the two-dollar store, but they’re not going to change the name of it, they’re just going to charge more.

But people are now hearing other people’s financial situations and they don’t feel as alone. They don’t feel that shame anymore. I think that’s a wonderful thing. But you do need to have a strategy to get rid of debt. No more Starbucks for a couple of weeks or a couple of months or a couple of years, or there’s no more of those trips to McDonald’s for lunch.

Instead, I’m going to bring a peanut butter and jelly sandwich to work. I mean, it’s amazing how saving $5 here, $5 there every day is a hidden workout. One of the things we do in our household, we have those big water jugs, is everybody puts a dollar in a jug every day, and at the end of the end of the week, we put $10 into another jug.

So, it’s just, you realize it’s okay. What? So big deal. You’re saving 50 bucks a month in all this stuff. Okay, well, at the end of the year, that’s 600 bucks just in those putting a buck away or here or there. I mean, a couple hundred dollars. There’s Christmas money. It’s not money we have to put into more debt.

There are different ways to save and different ways to deal with debt. Everybody has debt in one way or the other. I mean, whether it’s your house, your car or something, you got to figure, can you afford it? And if you can, what’s your solution to pay it off. There’s no judgment. You should not be judged by how much money you have or how much money you don’t have, or what your situation is.

You are a human being that wants some financial advice, wants to educate themselves. That’s very important. And going back to the debt thing is sometimes people do judge other people. Like there’s a guy I know in the back of the past, he drove a $75,000 BMW just for status purposes. He had had to work two jobs to pay for the car, but he wanted to have everybody think that he had a lot of money.

I think social media is showing us how our country’s starting to get less impressed by status because no one is getting embarrassed by what car they drive. Nothing wrong with the Mazda or a Honda or whatever. There’s nothing wrong if it gets you to point A to point B, and it’s what you can afford and what you feel comfortable with, and don’t be ashamed of it.

Be proud of yourself. Because there’s a lot of people out there that unfortunately don’t even have a car, and they don’t have that luxury of doing that. So that’s what I’m saying by no judgment is educate yourself first. And that’s what we are. We’re first advisor second. We’re not going to judge you on any situation you can possibly throw in front of us.

A huge positive trend online has been the popularity of simple low-cost strategies, index funds, dollar-cost averaging, long-term strategies have become mainstream conversations instead of those niche financial topics. In many ways, social media introduced millions of people to the principles that somebody who you might know, Warren Buffett, has preached for decades.

Think about that for a while. Warren Buffett has done pretty well for himself. He started out small, and then he started to diversify and then diversify more. And now he’s one of the smartest individuals and very he’s a pretty wealthy individual on top of it.

But he did it the right way. He went for long term satisfaction, not instant gratification. Now the guy could do anything he wants, pretty much, but he preached for decades, as you still have to protect what you have one way or the other. You can’t throw all your money at risk.