A little over two years ago, I was setting at my neighbors kitchen table and he laid out some papers listing his investments--- about $200,000 all in cash equivalents. I told him you need to have some money on the stock market! He said he used to, but when 9-11 happened he pulled it out. That was 17 years ago. He never got back in after pulling it out. I suggested he should buy a Total Stock Market Fund, he didn't, then I suggested he just get his feet wet with just $10,000. Nope.
Do People Take Your Financial Advice?
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retire48in2018
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In my group of peers - no one wants to listen or ask. They are all about spending or the latest vacation/big $ spend item. No close relationship with any of them.
To some who are close friends - when we are discussing how to be save $ on a house DIY project, or getting floor inexpensive - or whatever - they are interested in deals and they recognize that I am not about bragging about $ (like peers). They seek out how to make that transition. Often, it may come about in a 1:1 meeting where they talk about struggling. They will ask how to make it through that situation, then when finances becomes an issue for them - they will seek out counsel then as well.
Family - brothers, parents, uncles, cousins, etc - Not interested. They are swayed by some big spending relatives in copying that behavior and/or assuming that's who to follow.
Our immediate family - total transparent and we openly discusss and they welcome and seek out advice.
To some who are close friends - when we are discussing how to be save $ on a house DIY project, or getting floor inexpensive - or whatever - they are interested in deals and they recognize that I am not about bragging about $ (like peers). They seek out how to make that transition. Often, it may come about in a 1:1 meeting where they talk about struggling. They will ask how to make it through that situation, then when finances becomes an issue for them - they will seek out counsel then as well.
Family - brothers, parents, uncles, cousins, etc - Not interested. They are swayed by some big spending relatives in copying that behavior and/or assuming that's who to follow.
Our immediate family - total transparent and we openly discusss and they welcome and seek out advice.
target2019
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
People are generally looking for validation of their current beliefs. So you'll typically meet resistance when offering unsolicited financial advice.
My SIL would ask for advice & I don't know why. She asks me if she should borrow from her 401k to send her oldest daughter to a private college. I said no way, she could take out loans or go to CC then a state school and besides she had 3 other kids behind her. She took out the loan.
Second time she was leaving a job and wanted to know what to do with her 401k. I suggested she roll it into an IRA at Vanguard because of the lower fees. So instead she rolls it into her new employers 401k which has higher fees and poor choices of funds.
3rd time was her husband was doing a lot of side jobs so I suggested he open a Roth account. No she says that his $700 a month pension and SS should be enough.
So now I smile and say nothing and only think about my financial future and not hers.
Second time she was leaving a job and wanted to know what to do with her 401k. I suggested she roll it into an IRA at Vanguard because of the lower fees. So instead she rolls it into her new employers 401k which has higher fees and poor choices of funds.
3rd time was her husband was doing a lot of side jobs so I suggested he open a Roth account. No she says that his $700 a month pension and SS should be enough.
So now I smile and say nothing and only think about my financial future and not hers.
brett
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In my experience some of the people who desperately need financial advice and guidance are those that are so deep in trouble that they hide their heads in the sand hoping that it will go away or at least they can avoid the issue.
The challenge is that many hit the proverbial brick wall at retirement when they find themselves with little savings or income, perhaps some debt, and the reality of a different lifestyle. They are left with some pictures of past vacations, an aging vehicle that is no longer reliable, and some furniture bought on credit nine years ago that is showing it's age even though it was just fully paid for last year.
By the time that they face reality and seek financial advice it is too late. Even if they did choose to follow it, which is highly doubtful.
So no, when it comes to financial advice, we keep ourselves to ourselves so to speak.
The challenge is that many hit the proverbial brick wall at retirement when they find themselves with little savings or income, perhaps some debt, and the reality of a different lifestyle. They are left with some pictures of past vacations, an aging vehicle that is no longer reliable, and some furniture bought on credit nine years ago that is showing it's age even though it was just fully paid for last year.
By the time that they face reality and seek financial advice it is too late. Even if they did choose to follow it, which is highly doubtful.
So no, when it comes to financial advice, we keep ourselves to ourselves so to speak.
NW-Bound
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Do I give people financial advice? Nope.
Even to my own grown children, all I do is to tell them to be careful.
One of my brothers-in-law put all he got in his company stock, which was in deep financial doo doo (he was just an employee, and not someone with access to inside info). It recovered and he made out like a bandit.
Another brother-in-law listened to the first one, and put all his 401k in his own company (another company). How did the latter do? I don't care to know or to find out.
Even to my own grown children, all I do is to tell them to be careful.
One of my brothers-in-law put all he got in his company stock, which was in deep financial doo doo (he was just an employee, and not someone with access to inside info). It recovered and he made out like a bandit.
Another brother-in-law listened to the first one, and put all his 401k in his own company (another company). How did the latter do? I don't care to know or to find out.
jollystomper
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Most people think they are smarter than most other people. That is one reason why, unless one is activity seeking it, few will take unsolicited financial advice.
Just look at us here on this forum. The vast majority do not use any kind of financial advisor, instead we learn and do it on your own.
For me personally, I will tend to listen to advice not someone who is just successful, but from one who has made mistakes and has acknowledged them. I believe one can learn more from their mistakes than their successes. Perhaps that is my issue with financial advisors - few ever admit to making any mistakes
.
Just look at us here on this forum. The vast majority do not use any kind of financial advisor, instead we learn and do it on your own.
For me personally, I will tend to listen to advice not someone who is just successful, but from one who has made mistakes and has acknowledged them. I believe one can learn more from their mistakes than their successes. Perhaps that is my issue with financial advisors - few ever admit to making any mistakes
.It only occurs to me as I read this thread, that as many people have said "you're too young to retire", "Congrats, I'm jealous", "I can't believe you did it!", etc. etc., no one has ever asked me HOW I did it, or asked for advice. I can only conclude that they WANT to work into their 70s, and have to worry about how they will live after that.
capitalhockey
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Most people think they are smarter than most other people. That is one reason why, unless one is activity seeking it, few will take unsolicited financial advice.
Just look at us here on this forum. The vast majority do not use any kind of financial advisor, instead we learn and do it on your own.
For me personally, I will tend to listen to advice not someone who is just successful, but from one who has made mistakes and has acknowledged them. I believe one can learn more from their mistakes than their successes. Perhaps that is my issue with financial advisors - few ever admit to making any mistakes
I read the folks who makes the worse financial mistakes are doctors. They are smart in their field but feel like that IQ translate to finance as well. They earn a lot but lost a lot as stock pickers.
Markola
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Even more, there’s a chapter in “The Millionaire Next Door” about how doctors and layers are incentivized to create a facade of wealth in order to give the impression among their peers and clientele that they are strong, competent, trustworthy professionals. For example, true story: I have an attorney friend who, early on, drove his new Toyota Camry to the office. The managing partner told him to take it back and get a BMW.
I’m not judging and I appreciate good doctors and lawyers, but their professions can be subject to forces that mine never was that can constrain their wealth-building.
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CyclingInvestor
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Only when ask directly, usually very general / easy questions from acquaintences when they find out I retired early. I suspect mostly not followed.
A few close friends who wanted more detailed help actually have followed thru and implemented it.
A few close friends who wanted more detailed help actually have followed thru and implemented it.
I offer advice when asked, basically save at least 10-15% of your income in a Vanguard target date fund, preferably in a 401k/IRA. Three guys have asked over the last 6 years how we "did it". We told them savings and investing since our 20's. Two of the guys were already retired and wealthy. They weren't surprised about how we did it and they certainly didn't need advice. As for the third guy, I've w*rked with him so that he's on track to retire comfortably in 10 years, as opposed to never. It's one of the most fulfilling things I've ever done. We've become friends and I "consult" for him regularly re retirement planning and even on his business side.
Also, over the last 6 years 3 other people directly asked me what to do with piles of money they have saved, ranging from 5 figures to low 6 figs, all sitting in no-interest checking or savings. I tell them to put it into Vanguard target data fund, date set to the year they turn 65, keeping enough in a interest-bearing savings account for a emergency fund. Yes, I'm a one-trick pony...
So yes, I give advice when asked. I do regret the one time I gave "advice" unprompted. Another guy talked about financial advisors and I nearly fell off my chair laughing when he mentioned the big AUM fees! Again, I mentioned Vanguard target date funds, this time probably to deaf ears. Now, I'm trying to behave, and maybe I'll start coughing instead of laughing if I can't restrain myself!
Also, over the last 6 years 3 other people directly asked me what to do with piles of money they have saved, ranging from 5 figures to low 6 figs, all sitting in no-interest checking or savings. I tell them to put it into Vanguard target data fund, date set to the year they turn 65, keeping enough in a interest-bearing savings account for a emergency fund. Yes, I'm a one-trick pony...
So yes, I give advice when asked. I do regret the one time I gave "advice" unprompted. Another guy talked about financial advisors and I nearly fell off my chair laughing when he mentioned the big AUM fees! Again, I mentioned Vanguard target date funds, this time probably to deaf ears. Now, I'm trying to behave, and maybe I'll start coughing instead of laughing if I can't restrain myself!
Retired Expat
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Mostly know I refrain from giving any advice. Likewise as a construction professional I stopped giving advice to friends and families about their projects. If they listened they didn’t see the value of it since everything turned out well. If they didn’t it was always because of something else or that I didn’t explain it properly. Did they ever come back for a follow up? Not hardly.
So similarly here, despite retiring at 52 and living much better than most of my friends they don’t want to hear it. These are successful people, they know how to manage their money! Like my single friend who bought a beautiful 5000 square foot home and now grumbles about the maid she has to pay to clean it or the cost to Airconditionioning all those rooms she doesn’t use. But she loves her house and is completely “House Proud” if not “cash poor”.
People can be darn stupid and mostly you can’t help them with that...
So similarly here, despite retiring at 52 and living much better than most of my friends they don’t want to hear it. These are successful people, they know how to manage their money! Like my single friend who bought a beautiful 5000 square foot home and now grumbles about the maid she has to pay to clean it or the cost to Airconditionioning all those rooms she doesn’t use. But she loves her house and is completely “House Proud” if not “cash poor”.
People can be darn stupid and mostly you can’t help them with that...
Brat
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A friend called me this afternoon. She expressed dismay at the number of her investments. I suggested she make a list, consider why she purchased each, and determine if they are meeting her goal.
iloveyoga
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Most people don't want my advice about anything, including finances. I am better at keeping it zipped than I used to be.
I will talk money, investing, philosophy with damn near anyone. But I always open with its worth what you pay for it. And I remind them that i would never listen to their advice. That gets ego and such out of the way. Try and treat it like playtime.
I get a lot of questions from family and friends asking for advice because my last two houses that I purchased in California were with 100% cash. I advise people to study for a real estate license which is only a couple of night classes and then I work for a real estate company part time during the evenings and weekends. Income producing non-commercial real estate can be rewarding.
I also advise people to open an IRA and put 90% in index passive investments and put 10% in active trading. This is because you do not learn very much about the stock market as a 100% passive investor. Risking only 10% allows you to get to know the big investment companies and pay attention to their market recommendations of buy, hold and sell. Learn how the bond market work is equally important. Making money in the Stock Market is rewarding but the knowledge will not come to you. You have to acquire it by participating actively. You will make mistakes along the way so I advise people to risk only 10% of their portfolio. The worst case is a 50% loss of your 10% active funds. This is only a 5% total loss. The 5% potential loss now and then was acceptable for the knowledge that I gained over the years which I made up at the end of my investment career when the dollar amount was significantly higher than during my younger years.
I also advise people to open an IRA and put 90% in index passive investments and put 10% in active trading. This is because you do not learn very much about the stock market as a 100% passive investor. Risking only 10% allows you to get to know the big investment companies and pay attention to their market recommendations of buy, hold and sell. Learn how the bond market work is equally important. Making money in the Stock Market is rewarding but the knowledge will not come to you. You have to acquire it by participating actively. You will make mistakes along the way so I advise people to risk only 10% of their portfolio. The worst case is a 50% loss of your 10% active funds. This is only a 5% total loss. The 5% potential loss now and then was acceptable for the knowledge that I gained over the years which I made up at the end of my investment career when the dollar amount was significantly higher than during my younger years.
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ChicagoGal
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If asked for advice, I'm happy to share what has worked for me. However, I acknowledge that everyone's situation is different - different goals, different expense priorities, different time horizons, different family situations, different risk tolerances, etc. So if pressed, I try to ask questions that help them come to conclusions that work for their particulars.
For example, my best friend and I talk finances a lot. I'm much more analytical in that regard than she is and have done much more research. However, she is VERY risk averse, and I am fairly aggressive. So right there, we're going to have different approaches. (She gets frustrated when my annual returns are higher than hers, so I explain again the difference between my 80/20 portfolio and her 40/60 one.) I have a modest pension and retiree medical, and she has neither. I just announced my retirement and she insists she has to work until 65 (even though I'm pretty sure she has enough to retire if she wanted to). I have made some suggestions for her situation. Some she has embraced and others not so much. And that is perfectly fine.
I do offer the occasional unsolicited advice to nieces and nephews who are just starting out in their careers. Where it makes sense, I frame it as what I wish I had done when I was their age and why. No idea if they take anything to heart or not, but at least they hear me and some of it has to seep into their brains
For example, my best friend and I talk finances a lot. I'm much more analytical in that regard than she is and have done much more research. However, she is VERY risk averse, and I am fairly aggressive. So right there, we're going to have different approaches. (She gets frustrated when my annual returns are higher than hers, so I explain again the difference between my 80/20 portfolio and her 40/60 one.) I have a modest pension and retiree medical, and she has neither. I just announced my retirement and she insists she has to work until 65 (even though I'm pretty sure she has enough to retire if she wanted to). I have made some suggestions for her situation. Some she has embraced and others not so much. And that is perfectly fine.
I do offer the occasional unsolicited advice to nieces and nephews who are just starting out in their careers. Where it makes sense, I frame it as what I wish I had done when I was their age and why. No idea if they take anything to heart or not, but at least they hear me and some of it has to seep into their brains
jfn111
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Boy is that the truth. I have a younger friend that I was encouraging to buy index funds but he would rather listen to an uncle that pink sheet stocks are the way to go.
The way things go he will probably make millions and tell me I'm crazy.
Born2BRetd
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I was going to give advice about giving advice but then realized that no one would probably listen so....
SloHan
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Very rare that I am asked for any financial advice. Many folks treat it almost as a taboo subject which really is a shame.
JustCurious
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How do your family and friends know how you paid for your last two houses?
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