BEYOND THE BUZZ: SORTING FINANCIAL FACTS FROM FICTION ONLINE
Financial literacy, or a lack thereof, has been an ongoing issue in this country. We spend most of our young lives in formal education (school and university), yet most Americans don’t have the first clue about anything financial . Taxes are as foreign as long-form equations and the world of investing, savings, and personal wealth can look like the most complex of scientific formulas.
People who know me will often hear me saying “You don’t know what you don’t know,” and harping on the importance of knowledge. One of the biggest barriers to success is oftentimes knowledge, and as the wealth gap in America continues to grow, there is one factor that is always at play; knowledge – or lack thereof.
This is by no means anyone’s fault. Many of us lead busy lives, with jobs, families, and other responsibilities that call for our time and energy. So adding a whole new realm of study is pretty unappealing to even the most motivated person. Furthermore, much of the information people wanted to access has been gatekept behind complicated jargon and professionals in the finance industry who would rather hide behind the aura of importance vs. share knowledge.
Something needed to change. Enter, social media!
The internet brought a level of access never before seen, but social media was the true game changer. Thanks to channels like Instagram, YouTube, and now TikTok, the everyday person had unprecedented access to some of the sharpest financial minds in the world – and any of the information they were willing to share. Experts were now reachable from anywhere in the world.
However, it wasn’t just experts that were sharing their input. Today, anyone with a smartphone and internet connection can share thoughts on any subject via a video, social post, or podcast. While this is incredibly exciting, and liberating, it’s important to be mindful of the information that you consume – especially when it comes to your finances.
There have been plenty of instances where people have taken advantage of others – this can be seen throughout financial history. So, how can you assess the information being presented to you and feel confident that you’re sorting the good from the bad? Here are some helpful tips that you can use to sift through the facts and fiction on social media today.
1. Understand the Source
When looking at a person – or channel (such as a website or brand), take the time to research the source. See what experience and qualifications this person has. Did they study a certain topic at university or do they have experience in a particular industry? This can indicate their experience, and furthermore, how much their knowledge can be trusted. If they are from a less traditional background, you can review their track record. Have they been in the public eye for some time without serious scrutiny? These are important questions that help to validate the source of this information. Take the approach that you would in other areas of your life. If you need open heart surgery, you’d search for an experienced cardiac surgeon with a proven and trusted track record. The same thing goes for any financial advice you may encounter on social media – the source is important.
2. Understand the Goal
What is the goal of this person? This is crucial. Ask yourself if they’re simply trying to educate or if they’re trying to sell you something. There are plenty of well-intentioned creators out there that share a similar goal to me – they want to share their knowledge with others to help them better their lives. This is one the most positive things that have come out of the social media age. There are, however, those who are looking to only sell something – or get something out of you. This could be something innocent, and even beneficial, like regular financial advice or something like a budget tracking template. They could also be working on a commission basis as an affiliate marketer, looking to sell a product or get you to sign up for an app or service. What you’re trying to understand is what they’re hoping to gain and whether you benefit equally or more than the person in the piece of content.
3. Keep a Cool Head
We all know that the more dramatic or exciting something is, the more attention it will receive. We see this in traditional media and social media is no exception. The problem is that for some people, social media is their business. They rely on clicks and views to generate an income, and they need to keep the same, or greater, levels of traffic coming in. Warnings of the next crash or recession can be very eye-catching, but they can also be harmful if they’re not accurate. It can be very easy to follow the noise of the world, rather than sticking to the cold numbers of the market. In previous blogs and podcasts, I’ve discussed that the most successful investors – like the Munger's and Buffett's of the world – stay calm and often do very little. They don’t jump on fads and they don’t panic. Instead, they make a handful of carefully weighed and considered decisions to support the growth of their wealth. Today, there is more noise than ever, with more people able to grab our attention at any moment. Keep calm and stick to your strategy. If you need help with this, or building the right strategy to keep your cool, we can help.
4. Keep in touch
Keep in touch with other accounts and advisors so you can get second opinions on what you’re hearing. If multiple trusted sources are saying the same thing, this can be an indicator that you’re moving in the right direction. Conversely, if one person is screaming loudly that they have the secret no one else has – there may be something amiss. If you’re unsure about something you hear or read, simply verify it somewhere else if you can. It never hurts to be thorough, especially when it comes to your wealth.
5. Keep the Salt Handy
Take everything you hear, see, and read with a healthy pinch of salt. This, in other words, means don’t take everything at face value immediately. Take the time to mull things over, consider them, and understand them better. Rome wasn’t built in a day, and your wealth won’t be either. You have the time, don’t rush.
From Insight to Action: Secure Your Financial Future with Julius Wealth Advisors
There has never been a time when this amount of financial information has been so readily available. This is a truly exciting and empowering time for those looking to grow and manage their wealth. However, all the knowledge in the world can’t make up for a lack of time. Building wealth is a process that requires time, knowledge, and the right effort and consideration. With the right person in your corner, you can rest assured that you’re on the right path as you go about the things you do best – looking after your career and your family. Furthermore, the right person can be a sounding board for anything you may hear or see in the digital world.
If you’re ready to have this person in your corner, get in touch with us here at Julius Wealth Advisors today!
References:
Lack of financial literacy cost 15% of adults at least $10,000 in 2022. Here’s how the rest fared- CNBC.com
Disclosures:
This piece contains general information that is not suitable for everyone and was prepared for informational purposes only. Nothing contained herein should be construed as a solicitation to buy or sell any security or as an offer to provide investment advice. The information contained herein has been obtained from sources believed to be reliable, but the accuracy of the information cannot be guaranteed. Past performance does not guarantee any future results. The information in this material is not intended as tax or legal advice. Please consult legal or tax professionals for specific information regarding your individual situation. For additional information about Julius Wealth Advisors, including its services and fees, contact us or visit adviserinfo.sec.gov.