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SFB100 The Fallacy of Following Financial Entertainers

| July 09, 2018
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Episode Summary

In this episode, we talk about the mistake of following the words of financial entertainers, namely, Dave Ramsey, for facts without proper research. We examine why false expectations and over projections as a result of misinformation can be harmful to you financially. In addition, we note that when statements cannot be backed up with proper evidence and critics are lambasted instead of shown facts, those statements might not necessarily be true. The purpose of this series is to help you see through the entertainment and down to the facts.

What Was Covered

  • 02:22 - Who are financial entertainers and their influence on you
  • 03:30 - Two things that can be simultaneously true about financial entertainers
  • 04:12 - An analysis on Dave Ramsey
  • 05:25 - S&P 500 Index reflects the success of 500 companies in the country
  • 07:00 - Example of what average annual looks like
  • 10:44 - The average annual total return of the S&P 500 Index over the past 90 years is 8%
  • 14:04 - The fallacy of people are listening to Dave’s 12%
  • 17:53 - Dave’s not dead wrong, but also not complete
  • 18:26 - Evidence and research needs to be cited
  • 24:06 - The pain of false expectations and over projections
  • 26:54 - Be a planner or be an entertainer
  • 27:06 - Just a little bit of Google and fact checking can help fight misinformation
  • 30:05 - The biggest hindrance to people’s financial wellness is that they don’t set enough money aside for assets.

Tweetables

"Financial entertainers are people whose job it is to keep you engaged and drive ratings. One easy way to think about it is financial entertainers, their customers are advertisers."

"You, as somebody watching their TV show, listening to their radio program, subscribing to their newsletter, you are the subscriber, the product they sell to their advertisers."

"The S&P 500 Index is the best indicator we have of how the 500 largest companies in the country are doing."

"It’s almost more normal in the media today that people lambaste their critics by criticizing their critics rather than pointing to the evidence that they think."

"Be a planner or be an entertainer but when you blur the lines between both you’re creating a real danger for the people that are listening."

"The biggest hindrance to people’s financial wellness is that they don’t set enough money aside for assets."

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