High Heels and Finance: Expert Advice

High Heels and Finance: Expert Advice

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I have a personal philosophy to only take advice from experts. Oh sure, there are topics that are so vague or opinion based, one person’s thoughts are as good as the next. But on the subjects that are results oriented and scientifically based, why not go to a source of proven knowledge.


Not everyone has to be a professional in a given field in order to be an expert, but they better be practicing what they preach and getting results before I will even think about listening. I don’t go to friends and family for relationship advice if they aren’t in happy relationships. When it comes to physical fitness and nutrition, I find people with a lifestyle that I desire and ask them about their plan.


Money and investing are definitely subjects where experts abound.


So, if you’re a woman who’s serious about money, what do you do with the advice that’s doled out by your family, significant others and friends?


I see it all the time in my practice. A confident, well educated woman will question her plan because her mother says it’s too risky, one of her girlfriends wants her to splurge on a vacation or her boyfriend wants her to invest in his buddy’s business. Their intentions are in the right place, but should you trust it?


So, it’s important to be able to separate the good advice from the bad.


How Can You Tell If You Should Take Their Advice?

It’s pretty easy to tell if someone’s financial advice should be heeded. You just need to figure out if they’re an expert! Ask yourself these questions:

1. Are their finances in order, and do they have a plan?
This is absolutely a prerequisite to being a money expert. They have to walk the walk. If they have a good and consistent income, consciously spends less than they make, and invest to achieve long-term goals, it’s a very good sign.

2. Do they have an investment philosophy?
If someone is giving you investment advice, they had better have a well-researched philosophy. Investing has been studied extensively by some of the world’s smartest minds. It is a science and should be completely free of emotion, guessing, and future-telling. If they are imploring you to put money into their brother’s restaurant, buy last month’s big winner of a stock, or insisting that this or that sector is going to outperform, gently tell them, “I just don’t think that’s for me.”

3. What returns does their portfolio earn?
If they do have an investment philosophy, how well does it work? You can earn a long-run average of about 10% per year just by buying (and holding) a few specific low-cost, well-diversified index funds. So if their own investment philosophy isn’t netting a return higher than that (you need to see about 10 years of data to prove it), why deviate from best practices.

I’d love to hear your experiences about getting money advice and how you handled it.