It seems that more people today are relying on what I call financial entertainers on TV like: Clark Howard, Dave Ramsey or Suze Orman for their financial advice. This is very scary because many of these people are not properly licensed or trained to provide such information. In fact, if you read the end of every show, the fine print says “his advice does not constitute qualified financial advice, seek out a qualified professional to determine which ideas/moves are right given your situation.” So whether it’s telling a 70-year-old woman to keep most of her money in stocks, rushing to pay off her house and eliminating tax deductions, or always buying term insurance, why would she do you hear them?
Why have we reached this point in our society? I think it boils down to very simply that a lot of people have just stopped using what I call critical thinking or analysis and just accept things based on opinion. If you take a look at the medical community, would you accept the advice of an unlicensed board certified professional when it comes to your health? The answer is clearly no, but I can’t tell you how often today I see very high income people say Dave says this, Suze says that, and I stop to think why God aren’t people who take the time to develop the law. moves and strategies given your current situation versus giving up all control to a cable entertainer who isn’t even doing what he preaches is the path to financial independence.
This movement started in the last two decades, when people stopped using hypothesis and analysis. The definition of critical thinking is the process and search for relevant and reliable knowledge on the subject. It is a reasonable, reflective, responsible and skilful thought that focuses on deciding what to believe or not. A person who can think critically can ask appropriate questions, collect relevant information, efficiently and creatively order information, reason logically from this information, and come to reliable and trustworthy conclusions on the subject and enable it successfully.
Many people have become followers of authority versus critical thinkers. Most indulge in emotional, hopeful, and wishful thinking, believing what they believe to be true because they want, expect, or feel it to be true. Therefore, most people do not think critically or have a process for making such financial decisions.
If you take the example of an article published in the NY Times dated 02/25/07 titled “she’s so money”, the article in summary takes a look at Suze Orman’s financial holdings and see if it reflects the advice she gives constantly. to the viewers of it. When interviewed, Ms. Orman states that “of her $25 million net worth, the majority of her savings goes into zero coupon bonds and municipal bonds. In fact, she states that I bought zero coupon municipal bonds, and all the bonds I buy are triple-A rated and insured so that even if the city goes under, I get my money. I take a little bit lower interest rate to make sure my bonds are 100 percent safe and sound. She has other $7 million in real estate and about 1MM in the stock market because, as she says: I have a million dollars in the stock market, because if I lose a million dollars, I personally don’t care.”
So I want you to think for a moment, what are Suze Orman, Dave Ramsey, Clark Howard and many other so-called gurus doing with their money? Are they doing the same thing they advise you or me to do? No way… How can you then if trying to make good decisions with your money, listen to someone telling you to do things one way and they, in turn, are doing it the complete opposite way?
Most people who don’t use critical thinking will lose more money in their lifetime than they will keep or transfer to their families or causes. I encourage you to find a licensed professional and stop being a follower of authority, whether it’s a TV personality, an institution marketing your ideas to you, or ultimately relying on the government to bail you out. If many of you don’t change your thought process back to critical thinking, I believe you will continue to ride the roller coaster of life and never have control of your money and the decisions behind you.