famous personal finance experts

famous personal finance experts

Exploring the Wisdom of Famous Personal Finance Experts

1. Introduction to Personal Finance Experts

Learning from the wisdom of those individuals reputed to be the most famous in a particular field has significant potential. However, learning from many experts in a field has even greater potential, in part because every reader may hope to find the expert who best resonates with his or her personal style and philosophical point of view. Furthermore, because the experts often disagree in many areas, one can hopefully find the expert who can express both sides of an issue. Of course, it is impossible for one person to have read all the experts who become famous over a period of a number of years. However, the relatively young field of personal finance, with its large number of popular books and the internet, has made such a study relatively easy. And, we all need to learn about personal finance more than almost any other topic.

Many Americans learn about personal finance in a haphazard way that is far from optimal, often learning by trial and error. At least four possible ways exist to help overcome this problem: (1) Schools and colleges can teach personal finance; (2) Parents; (3) Financial advisors; and (4) Popular writers and speakers. In very broad terms, financial advisors are the most thorough and efficient way for many individuals to learn about personal finance, although they may be relatively costly. Many young Americans are being educated about personal finance by their parents, although this process may not cover all the necessary topics and may not always be in the child’s best interest.

Popular writers and speakers may have the most influential effect on the personal finance education of the largest number of Americans who are not the children of the rich. Of course, individual writings and speeches from various experts are not only less orderly and thorough than college courses or sophisticated advisors, they are of widely varying quality. In theory, the level of an individual expert, as judged by the masses of purchasers and readers, should select out the better, more instructive experts. Popular books that are named as bestsellers and popular websites are highly influenced by the amount and type of time, money, and knowledge of the expert, the book publisher, and the internet gold rush sponsors.

2. Key Principles and Strategies of Personal Finance Experts

Understanding and applying the concepts of personal finance experts is both essential and timely. The cost of many goods and services has risen much faster than the wages of many workers. There are extraordinary cases of financial success on one hand and despair on the other in America. More people file for bankruptcy protection each year than file for marriage licenses. On the positive side, more people earned more money than ever before, invested in mutual funds, and took control of their finances in a variety of ways never possible before. Increased coverage of personal finance topics in the media and in corporations can be biased, inconsistent, incomplete, uninformed, controversial, sensationalistic, or otherwise flawed. The principles and strategies that famous personal finance experts developed to help their clients gain control of their financial futures are generally proven, time-tested, effective, and rational.

However, media may instead present theories dramatically contradicted by research, especially when a contrarian angle adds entertainment value and ratings. By understanding and applying the sound principles and strategies of personal finance, achieving personal financial success can become a real possibility. Personal finance experts can help people in diverse situations including those who earn high six and seven-figure incomes currently living paycheck to paycheck, those living in multimillion-dollar homes but chronic borrowers away from home, those with low incomes but saved enough to retire as millionaires, those who have built great wealth but lost much of it, and those desiring to pass assets through generations. Although a majority of personal finance experts have finance degrees and/or experience as well as certifications, great and effective messengers commonly acquire noteworthy standing and authority as they reach out to help and change lives.

All personal finance experts, regardless of their level of achievement, have made uncommon efforts to share their wisdom and develop the financial skills and mental attitudes necessary for success with others. Experts model traits including discipline, frugality, integrity, perseverance, simplicity, sound judgment, and the pursuit of a dream. They encourage clients to ask questions, plan, set priorities, challenge assumptions, make thoughtful decisions, continuously educate themselves, recognize and control judgments, gain self-knowledge, establish a purpose, create a profitable and worthwhile business, value time, prepare for the unexpected, take action, preserve wealth, remember their roots, express appreciation, defend their principles, lead by example, and pass on their financial wisdom from generation to generation. Success in personal finance results from adequate inner strength, pleasure in personal pursuit, and from personal congruence, developed by personal finance insights combined with ongoing inspiration and support.

3. Case Studies: Applying Expert Advice in Real Life

First, it is important to note that principles usually outlive their specific manifestation, meaning that what Mr. Kiyosaki defines as an asset may look different in the future. The understanding of cash flow is crucial, and his advice to focus on cash flows while acquiring assets and not concentrate on immediate income is significant. However, real estate is a very complicated asset class, especially for first-time buyers, so it might be prudent to disclose that leveraging one’s house with a mortgage can be risky. Finally, the encouragement to never buy liabilities without first buying assets – although it does make a certain amount of sense – is not applicable in the real world where people still have to buy their own house to live in and a car to take them to work before they become financially free. In fact, Kiyosaki has a caveat in his own book – cars and homes bought as an investment both cost you money, even if they generate some cash flows. So basically, people will always have to buy them – that is one of their needs to be satisfied.

Mr. Robert Allen is probably the most daring personal finance expert of all. He encourages buying real estate with 100 percent financing to get rich in the shortest amount of time. Generally speaking, people should better start small, especially when they start with no money and no credit, focusing strictly on cash flows. However, since he actually advocates buying low-income properties rather than run-down properties, one has to invest at least a minimum amount of money into the property, even if the financing from the bank is at 100 percent. Moreover, no bank will appreciate you paying no money out of your own pocket. Banks appreciate borrowers investing at least a small portion of the purchase price. The other issue with his advice on how to quickly pay off your credit cards by pulling cash out of your home is actually making your home your source of living. Before focusing just on the trade and interest, people should do a little research on basic human needs, like food, shelter, and clothing, and the best ways to satisfy them. And it’s not easy to finally transcend that essential level.

4. Impact and Influence of Personal Finance Experts

There is little doubt that many individuals find wise counsel in specific personal finance books and authors. To what degree – and the specific impact on actual financial behavior – is more difficult to judge. For example, if personal finance broadcast personality Suze Orman promotes the concept that individuals should seek to achieve the ‘highest FICO score possible’ because it is key to a successful financial life, are persons more likely to actively and aggressively engage in actions that will boost their FICO scores? If others such as radio personality Dave Ramsey instead recommend that individuals completely avoid FICO scores and are able to live successful lives without them, do others embrace his message instead?

In reality, how much actual influence results from specific personal finance experts has been a subject of relatively little specific analysis. Although the popularity of a personal finance author’s books is an indirect indicator of the potential influence on multiple consumers, few studies have looked at specific numerical impacts. For example, personal finance expert Orman’s book “Young, Fabulous & Broke” has sold more than two million copies and was on the NYT bestseller list for more than one year. Does the success of this and similar books result in sustained changes in financial behavior, at least for some subset of readers?