Why you should never rely on only one source

It’s fine to have a source that you prefer above others, but you need to remember that they are not infallible. They don’t know you, or how much money you have to invest or lose, or how much debt you have, or any of the extenuating circumstances that make your situation unique. Their advice is often generic and tailored to a mass audience, which may or may not include you. Any expert is merely making an educated guess based on the information they have and the trends they see. Some are better at reading the trends and information than others. Since none of them have a crystal ball, they cannot know the future for certain. And you shouldn’t assume that they do.

So if no one can be trusted one-hundred percent, what can you do to keep yourself form being victimized by a clueless talking head? First, don’t take anything any expert or media outlet says as the gospel truth. Even if they were right in the past, that’s no guarantee that they will be right in the future. Listen and learn from your preferred source, but remember that they are making educated guesses and are not certain what the future will bring. Also keep in mind that they do not know your specific financial/investing situation, so their ideas may not apply to you.

Second, educate yourself. The more you know about finance and investing, the better you become at interpreting trends and information for yourself. Since you know your situation better than anyone else, you can take the information you receive and determine whether any of it applies to you or is useful for you. When you are educated about finance, you can watch/read the experts with a critical eye and get a feeling for whether the information is junk, or if there’s something to it. Education can make you into your own expert, reducing the need to rely on the opinions of others who don’t know you or your situation.

Third, use a variety of sources in your financial planning. The best thing you can do to protect yourself from incorrect information is to use multiple sources for your information. Read a variety of magazines and books. Watch different television stations. Listen to several different gurus. All channels, authors, and experts have their own political, religious, or sponsorship affiliations and agendas that lead them to report things in ways that meet those agendas. By using multiple sources, you get a more complete picture of a situation. You get beyond the picture that one station/expert wants you to see and you see how the situation resonates with different groups. This complete picture can lead you to make better financial decisions than if you only had one side of a story.

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