Are You Allowing Family to Control your Financial Destiny?
“My parents think we should buy a house, but I don’t think our finances are ready for that.”
“My grandfather says that only fools invest in the stock market.”
“Uncle Lewis invests a lot of his money in gold and pretty much insists that we should all be doing the same.”
“My brothers say that buying a car that’s less than five years old is a waste of money.”
Family members and loved ones can be incredibly compelling. We trust them. We love them. We value their input. Sometimes, they frustrate us with their input, but we know that it’s usually brought about by love and concern.
How can we not listen to them? How can we not value their input?
The first thing to remember is that you don’t know the basis from which family members are drawing their statements and opinions. Financial moves should be based on raw data and real information, not on secondhand sources or media summaries.
Sometimes, family members are basing their statements on what worked well twenty five years ago. At other times, their information comes from sources with questionable motivation, like ads on talk radio stations or commission-based financial advisors.
You need your financial information to come from trusted sources who can back up what they’re saying with authentic data, not secondhand anecdotes. You should never take financial advice from anyone without verification of what they’re saying.
Finally, your family and friends likely do not know the specifics of your financial situation. They don’t know the level of debt that you have. They likely don’t know your income level. They don’t know the interest rates on your student loans or the balances of your loans.
Without these essential pieces of information, no one on Earth can give you sound financial advice. It’s just not sensible to suggest someone should buy a home without at least some idea of their income level, their debt level, and their credit history.
Family members can be wonderful, caring people. That doesn’t make them financial advisors.