Should a Financial Guru be Dictating Your Money Matters?

02/18/2016 at 10:23 | US News & World Report

They have baby steps, checklists and books galore, but is it really a smart idea to follow the advice of a budgeting superstar?

Mary Hunt and Suze Orman are a few of the finance superstars who offer tips on everything from how to save for retirement to when you should pay off your house.

They may have bestselling books behind them, but is it really smart to follow advice doled out by a TV or radio personality? According to some finance professionals with lower profiles, the answer is yes and no.

The concepts of saving up an emergency fund, eliminating debt and putting money aside for retirement are almost universally accepted as sound financial practices. John Sweeney, executive vice president of retirement and investing strategies at Fidelity Investments, adds that the basic steps outlined by financial systems make it easy for people to build a solid foundation for retirement.

Personalized advice for people who fall into the 20-year period starting 10 years before retirement and ending 10 years into retirement might be more appropriate. “There’s a lot of irreversible damage that can be done with poor advice given during that time frame,” Alison says. Deciding when and how to pull money from retirement funds can have serious tax implications, and generic advice can’t take into account a person’s tax situation.

Of course, not everyone wants put the fate of their retirement into the hands of others. Some say no amount of planning can make up for an unpredictable stock market.

Michael Ellsberg, author of “The Last Safe Investment: Spending Now to Increase Your True Wealth Forever,” notes the S&P 500 index fund has averaged only a 1.5 percent gain each year for the last 16 years when you factor in inflation.

Ellsberg says, “The best investment is not the stock market, with its high risks and meager returns, but rather it’s your own earning power.”

Celebrity financial advice might motivate some people to get out of debt and start investing, but it certainly won’t work for every situation. The key is to find the method that has you taking action for a financially secure future.

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