Financial Advice from Others

People afford what they choose to afford. Imagine your neighbor providing you with financial advice while holding a beer and smoking a cigarette. Imagine he tells you how difficult it is to make ends meet with the high price of this and that.

That scenario isn’t so hard to imagine. There are “poor mouths” everywhere. How many people do you know that indulge in luxuries like drinks and cigarettes, but tell you that they are having a hard time affording essentials? I have met plenty.

The truth is that people make choices about what they will or will not afford themselves. Rarely is anyone forced into a situation, through no fault of their own, where they have no choice in how they must spend their money.

Many sacrifice what they need for long term financial freedom to get what they want for short-lived pleasure. They make near-term choices as to what they are going to afford, and can’t see the long-term financial security they are giving up. Their idea of money management might not be well thought out, but they follow it anyway.

Likewise, don’t look at what others have and imagine “if they can afford that, then I can too”. They might choose to afford flashy stuff, but could be having financial turmoil behind closed doors. If only you knew their entire financial picture, you might not look upon them with envy, and you certainly wouldn’t look to them for financial advice.

I knew a millionaire once that drove an old International pickup truck. It was hand painted. He looked like a man on a budget that didn’t have two dimes to rub together, and that was exactly why he was wealthy. He made choices not to waste money on a new vehicle, and many other things – instead he bought land and buildings as investments. His thrifty living paid off very nicely. He would be a much better source of financial advice than your average person.

Never let anyone tell you how to spend your money. You are the manager of your money, your health care, your life, your time, and your future. Stop listening to unsuccessful people providing you with financial advice. Consider the source when you hear people tell you what you should and should not be doing with your money.

There are two main reasons people tell you how to spend your money: first, because it isn’t their money; and, second, because they want you to be in “the same boat” or “club”. Be good at personal finance, be a good manager of your assets, and don’t listen to the financial advice of others unless you have reason to believe that they know what they are talking about and have your best interest in mind.

I can’t tell you how many times friends, family members, neighbors and co-workers would say things like “part with some of those bucks” or “you’re saving all kinds of money” or “did I see a moth fly out of that wallet”. All of those people are still working now, and I’m not. So, we now know who had the better aim, the better plan, the better approach to saving money and obtaining financial freedom for the long haul.

It isn’t hard for me to recall when people 20 years older than me would offer financial advice. While I wanted to be spending less, they were encouraging me to spend more, especially on discretionary things like Saturday night poker and luxury vehicles. These were people that had solid established careers, and often were part of a two income family. They were showing off in front of a young guy who was just getting started and didn’t have any disposable income to speak of.

Stop listening to folks unless they are encouraging you in constructive ways. If people haven’t demonstrated good money management skills through their own success, then don’t pay attention to their financial advice.

Hang around smart people – they make you smarter. The opposite is also true. If you want to learn how to fish in the ocean, whom do you talk to? If you want to learn how to fly, whom do you talk to? If you want to learn about framing a house or building a piece of furniture, would you interview a chef, a convenience store clerk, or a carpenter? You get the picture.

Stay close to smart and successful people to learn about how to be smart and successful. They are the ones that I would listen to when they give financial advice. Know what they do and how they do it. It might very well be something worth imitating.

Hanging around the not-so-smart will likely result in adoption of harmful attitudes and habits that won’t serve you over the long term.

Done with Financial Advice, take me back to the Mindset of Frugality