Bad financial advice comes from a lot of sources, most of which are trying to sell you something. Most of the time that advice is coming from well known names in money and financial management. Sometimes that bad advice is coming from social groups online. What comes as a surprise to many is that all those seemingly disparate messages may have a common source. Many of those messages are carefully choreographed by advertising agencies to flow to you in a coordinated fashion.
I think we all get that, in any public media, we’re being manipulated to a certain extent. I will admit that I am also trying to manipulate people. I’m trying to manipulate people into taking control of their finances, getting spending under control, saving money, getting out of debt and learning to invest wisely. Up against me are organizations with massive budgets and a small army of confederates, many of which are working actively on social media.
Paid social media engagement is effective because our brains did not evolve as loners. While a few can manage to live a life apart, our hard-wired inclination is to bond with others like ourselves. As we all lead progressively busier lives, social media has grown to fill that need to connect and our social lives have moved online. Since it’s a largely anonymous environment, it’s nearly the perfect medium for big advertisers and influence organizations to build relationships. When you hear any of the following, be very suspicious of the source.
Buying a House Is a Good Investment
Anyone who tries to convince you that an owner-occupied home is, in any sense of the word, an investment, is either a dupe or getting paid by the real estate industry. Owner occupied homes are the worst investment in the history of bad investments. There are a lot of good reasons to buy a home and, sometimes, it’s the right choice. But buying a house thinking it’s some kind of an investment is pure folly. Even the mortgage interest tax deduction is all but worthless these days and you have to itemize to get it. Anyone trying to sell you on a house as an investment is trying to con you.
Cash Back Is a Good Reason To Use a Credit Card
Do you know why casinos make such a production about paying out a big jackpot? Because they know it will motivate others to keep playing and the vast majority of them will lose money. In every personal finance forum anywhere on the internet is inevitably what I call the cash back pro. People who claim to make an extra $500 or $600 a year on cash back bonuses. Funny how those people always have so much time to post on social media. With this one you will find a small number of people who actually do manage beat the cash back system alongside the paid protagonists. Using a debt instrument to save one or two percent is a sucker’s game. Sure, a few people probably do beat the system, but you’re playing against a house that’s managed by people who are professionals at playing the odds. Credit card companies know that a certain percentage will run into an emergency or be out of contact and miss a payment. When that happens, all those phantom savings are wiped out, just like suckers in the casino.
College Is a Must To Make Decent Money
While it’s true that, on a very wide statistical basis, a person with a college degree will earn more than someone without a degree, the difference is not as clear cut when you factor in the cost of education. The difference is even less clear when you factor in skilled trades that you might be able to practice with a two year degree. The fixation on college also misses out on options like using a two-year degree to make enough money to finish college at night. There are a wide range of educational options available, consider all of them before running up a pile of student loan debt and then quitting before you get your degree.
Social media is here to stay, just be a little skeptical of public forums. At least a few of those people are being paid to post and, these days, may not even be human.