DO CELEBRITIES GIVE BETTER FINANCIAL ADVICE?

Celebrities have mass appeal. Learning about money doesn’t. Maybe the solution is to get financial advice from celebrities such as billionaires, authors, journalists, bloggers or TV personalities.

Maybe.

Advantages

Whatever causes us to pay attention to money helps us.

Celebrities have the power to create awareness, build interest and provide motivation. Since they get promoted and already have audiences, they have a powerful advantage when spreading messages. Besides, we often like they way they talk and look. That makes us more receptive.

Pitfalls

We listen when Warren Buffett speaks about anything: life, philanthropy and career choices (“Warren had even considered actuarial science — the mathematics of insurance — as a career”). Yet Warren is from a different era and financial stratosphere. His tips may be valuable but aren’t tailored to your unique situation, unless your name is Bill or Melinda — and they don’t need much help.

In Pound Foolish: Exposing The Dark Side of the Personal Finance Industry, Helaine Olen gives numerous examples of questionable advice from the likes of Robert Kiyosaki, David Bach, Suze Orman, Jim Kramer and Dave Ramsay. We must be careful.

Repetition

“I’ve heard it all before. You’re saying nothing new.”
— Supertramp, Child of Vision

As you delve into the financial world, you'll notice huge overlaps in the advice provided. Have an emergency fund. Ever heard that one? Pay yourself first. Is that a new one for you?

We get the same messages over and over told in slightly different ways (much like Hollywood movies). Why do we continue to pay attention?

• we need help or reminders
• we don’t want to miss something new
• we want confirmation that what we’re doing is sound

Going Beyond

We often need more than than financial advice. Good habits take time to build and effort to maintain. Maybe that’s where we need the real help. Can celebrities provide personal attention? If you want to have ongoing discussions, they aren't your best choice. They're busy. They may be traveling. They may not know or want to the liability from getting involved.

Regular Folks

There’s no monopoly on common sense or money advice. I’ve been collecting stories for the What I Learned About Money project. The lessons are sound, even when they’re from “regular folks”.

Over-reliance on celebrities works against you. They are like us. Their biases, beliefs and motivations tint what they say and what they see. For example, opinions vary on the pros and cons of financial leveraging.

What do celebrities leave out? What do you filter out? Confirmation bias gets in their way and ours. You win by embracing different sources, thinking and comparing.

Procrastination

Since celebrities are busy, you have fewer chances to see them. Don’t make that an excuse to procrastinate. Get started where you are with what you have. Books make a great source, if you like reading (some titles).

You can't beat live events — even if that means going out on a chilly dark evening (say to Money 50/50: Insider Advice for Today’s Topsy-Turvy Times). Ask questions. Talk to other attendees. You don’t know who you’ll meet or how you’ll change.

Links

• The best money advice I ever got (or gave) (Wall Street Journal, Dec 2013)
• Don’t take financial advice from Michael Fassbender
• If you have/had/want money, read Pound Foolish
• Does billionare Seymour Schulich help you Get Smarter?
• Disaster-proof your life: the first rule for financial success (Preet Banerjee)
• Fight Back against corporate trickery (Ellen Roseman)
• Where financial bloggers fail
• image courtesy of stefanie van der vin

PS Remember that celebrities get bad financial advice too.