Financial Feminist – 111. Debunking the Worst Money Advice We’ve Ever Heard

Intro

Welcome to the Financial Feminist podcast where we discuss how money affects women differently and how to fight the patriarchy by getting rich. In this episode, we debunk some of the worst money advice the host and the community have ever heard. From personal stories to popular financial gurus, we explore the misconceptions and pitfalls of financial advice. Join us as we navigate through the world of finance and empower ourselves to make informed decisions.

Main Takeaways

Questioning Well-Intentioned Advice

• Unsolicited financial advice from a senior finance manager at her first corporate job: “You don’t need to save all that money. You’re young. You can catch up.”
• Realization that not everyone who gives advice cares about your goals or knows what’s best for you.
• Parents’ advice to prioritize stability and avoid risks, even reasonable ones, led to bad financial decisions.
• Reminder that even well-intentioned people can give advice that doesn’t align with your values or goals.
• Parents’ advice to buy property at a young age, without considering the financial burden and personal goals.
• Well-intentioned advice from loved ones may not be the best for you.

Debunking Dave Ramsey’s Advice

• Dave Ramsey’s advice of a $1,000 emergency fund is not enough for most people’s living expenses.
• Emergency fund should be based on individual living expenses, not a specific number.
• Dave Ramsey’s tweet about only going to a restaurant if you work there when in debt is shaming and not psychologically sound.
• People in debt can still enjoy life and balance their spending.
• Dave Ramsey’s advice on debt and credit cards is bad and shaming, and doesn’t acknowledge systemic factors.
• Ramsey tells people credit scores are unnecessary, but they are crucial for building credit and getting loans.
• Ramsey’s advice disenfranchises people of color and is not financially sound.
• Empathetic and understanding advice is better than tough love.
• Paying off debt does not necessarily lower your credit score, but may temporarily affect it.
• Paying off debt may cause a temporary dip in your credit score, but it’s worth it to become debt-free.

Navigating the Workplace

• Loyalty to a company doesn’t necessarily pay off in terms of career progression or job security.
• Negotiating for fair compensation is always important, regardless of the company’s financial situation.
• Marginalized individuals may be overlooked in the workplace if they simply keep their head down and do good work.
• Companies have a legal duty to ensure their financial success, but this should not come at the expense of fair compensation for employees.
• Don’t let a company’s financial struggles discourage you from negotiating fair compensation.

Investing Wisely

• Investing is about long-term commitment, not short-term gain.
• You don’t need a financial advisor to invest, just someone to guide you.
• Professional stock pickers are not as good at their job as we think they are.
• Betting on the next hot stock is not a sustainable way to invest for the long term.
• Index funds are a great investment choice as they offer a diverse portfolio for a low fee.
• Life insurance should only be used for its intended purpose and not as an investment, as it is a scam.
• Crypto and NFTs are speculative investments and should not make up more than 5% of your portfolio.

Choosing Your Own Path

• Myths about investing on your own and treating yourself while paying off debt should be debunked.
• Emergency funds are not meant to be used to pay off debt, but to sustain you in case of an emergency.
• Renting can be a better financial choice than buying, and it’s important to choose what fits your lifestyle and financial situation best.
• Financial advice may not fit your life and it’s important to explore why that is.
• Use money to build the life that you want, not someone else’s.
• Investigate advice before taking it, as some of it may be scammy or irrelevant.
• Share your stories and experiences with financial advice, and leave voice mails for the show.

Summary

Questioning Well-Intentioned Advice

It’s important to critically evaluate the financial advice we receive, even if it comes from well-intentioned sources. The host shares personal stories of receiving bad advice from a senior finance manager and parents, highlighting the need to prioritize our own goals and values. Just because someone has more experience or good intentions doesn’t mean they know what’s best for us.

Debunking Dave Ramsey’s Advice

Dave Ramsey, a popular financial guru, has been known to give advice that may not be suitable for everyone. His advice on emergency funds, debt, and credit cards can be shaming and ignores systemic factors. It’s important to tailor financial advice to individual circumstances and consider the long-term impact. Building credit and understanding the role it plays in financial opportunities is crucial.

Navigating the Workplace

The podcast emphasizes the importance of fair compensation and negotiation in the workplace. Loyalty to a company doesn’t always lead to career progression or job security, and marginalized individuals may face additional challenges. Companies have a responsibility to ensure financial success without compromising fair compensation for employees. Don’t be discouraged from advocating for yourself, regardless of a company’s financial situation.

Investing Wisely

Investing is a long-term commitment that requires careful consideration. The podcast challenges the belief that professional stock pickers are infallible and encourages individuals to take control of their own investments. Index funds are highlighted as a great investment choice due to their diversification and low fees. The podcast also cautions against treating life insurance as an investment and advises caution when venturing into speculative investments like crypto and NFTs.

Choosing Your Own Path

The podcast encourages listeners to question common myths and explore what financial advice aligns with their own lives. Emergency funds should be reserved for emergencies, not used to pay off debt. Renting can be a better financial choice than buying, depending on individual circumstances. It’s important to use money to build the life you want, rather than following someone else’s expectations. Investigate advice before taking it and share your own experiences with financial advice.

Conclusion

Financial advice is not one-size-fits-all, and it’s crucial to critically evaluate the guidance we receive. Whether it’s questioning well-intentioned advice, debunking popular financial gurus, navigating the workplace, investing wisely, or choosing our own path, we must prioritize our own goals and values. By empowering ourselves with knowledge and understanding, we can make informed financial decisions that align with our individual circumstances and aspirations.