Some feedback over the nine years of writing about money on Consumerism Commentary indicates that there are some readers — not necessarily daily readers and fans of a website, but those who are searching online about some finance-related topic and are at best passing by any particular website — are looking for quick answers. People want to be told what to do instead of making a choice on their own, or they want to confirm or affirm that a particular financial decision was a good one.

I’ve never been a fan of flatly telling people what to do, particularly when it comes to financial advice. Financial advice is personal, and it’s difficult to prescribe specific actions to a mass audience. Groups are composed of individuals, and every person has his or her own situation that might differ from the average. Some generalized financial advice fits all sizes and situations, but when you get to the more interesting aspects of personal finance or begin examining the details, that’s not always true.

Motivational speakers who focus on finances succeed — and their success is often defined by their profit from seminars, books, and other products sold to consumers who should probably be saving their money — because there is a great audience of people just waiting for permission to take action. At some level, they know it’s good to focus on their personal finances, but need someone to inspire the first step with a push.

Depending on the motivator, that push might take the form of a big “DENIED” graphic flashing on the television screen or some actionable information about investing in real estate. Regardless of the form, it has the capacity to inspire thinking about personal finance, if it doesn’t permanently damage the listener’s psyche or portfolio. But the more popular the guru, less of the action is a result of thinking and more of the action is a result of blindly following.

I’ve tried to focus on the thinker, and that approach has done well to shape the Consumerism Commentary audience over the years. I certainly have my opinions, but — and perhaps this prevents me from generating a rabid fan base (and I have no problem with that) — I prefer to keep myself out of the advice except occasionally sharing my tempered opinion or stories from my own related experience. I can offer two sides of an argument when there are valid points on both sides, and I try to present them in a way that helps readers consider their own situations and make their own decisions.

Once in a while, I receive a comment in response to a contemplative article like, “I wish you would just tell me what to do.” I want to respond, “I’m not your dad.” Not to bring a cliché into the discussion, but isn’t it better to teach a man to fish than it is to give him a fish? To me, that seems to be the point of education. Provide people with the tools they need to make their own best decisions rather than telling them what to do.

When talking one-on-one, it’s much easier to analyze a situation and provide individualized advice, but when discussing a general issue online, that’s more difficult.

A good way to address the problem of finding answers that are applicable to everyone is to address one specific situation at a time. Given enough situations, readers can often relate to at least one. This is the approach Liz Weston has taken in her latest book, There Are No Dumb Questions About Money, available on the Kindle and from iTunes. The book features many of the questions — describing specific financial situations — Liz has received over the years. Readers of the book are sure to find situations described within that match their own. I’d be happy to take specific financial questions as well. Those I can answer, I will, and for those that require someone who is more of an expert than I am, I will seek an answer from a professional.

It’s a win-win situation, as corporate motivational speakers might say. Questions provide me with great ideas for new articles, and readers receive advice for overcoming their financial obstacles or for making better financial decisions. When it comes to writing for a wider audience, however, I feel I have the responsibility not to tell people what to do, expecting them to blindly follow these suggestions. Being an adult in a society where education is valued is all about thinking for yourself, consulting experts when necessary, and making the best decisions, on your own, that are best for you.

This can certainly be difficult when salespeople are disguised as experts. When you don’t have a lot of friends who understand the mortgage industry, for example, you rely on the bank’s advice for making decisions. If the bank says you qualify for an expensive mortgage and they show you some calculations, however flawed, to prove their point, you trust them. Then you might find yourself in financial trouble when interest rates increase, tax rates increase, or your home loses its market value.

You want to blame the bank, and in some cases, you were misled and you can, but for the most part you have to own your decisions. You can better own those decisions if you are willing to exercise the mental capacity to analyze your situation and the choices confronting you. That’s why I don’t often prescribe a course of action.

There are guidelines, however, that tend to work well regardless of specific situations. Start saving and investing as early as possible. Minimize expenses and maximize income. Spend less than you earn. These are just guidelines, though, and not very specific. Once you start getting into the details, how you go about changing your actions and attitude depend on your individual situation.

People may be looking for a simple answer to questions like, “With some of my extra cash flow, should I invest more or pay off my mortgage.” I can give a simple answer. I could say that the best choice is always to invest more, and I can cite enough supporting evidence to back that statement up with facts, statistics, and reasoning. I could advise readers to pay off the mortgage and have other facts, statistics, and reasoning to support that answer. There are other details you need to know to give informed advice to any household considering this question, however. If you really want the best answer to this question, you would need to share more information, starting with the following:

• What is the interest rate on the mortgage?
• What is your preferred investment?
• How much time do you have left to pay off the mortgage?
• How averse are you to risk?
• What type of return are you expecting on the investment, and do your expectations have a good chance of being accurate?
• What other financial obligations do you have?
• How much time do you have left before you’d like to retire?

I don’t see how anyone can offer solid advice without answers to these questions to start, yet people are looking for a quick answer, such as, “It’s always better to pay off your mortgage faster rather than invest when you have extra cash available.” Financial writers can say that, or they say the opposite, but it really doesn’t help anyone in the long run.

To everyone who has come to Consumerism Commentary looking for a quick answer to a complex financial question, I apologize. I may take that approach sometimes, and when readers offer specific questions with enough detail I might entertain one-on-one advice, but when it comes to larger issues affecting a group I am much more likely to consider all sides and encourage readers to analyze their own situations with a little more perspective. With the expanded perspective, readers are better prepared for making their own decisions and taking responsibility for their actions.

As an aside, I don’t always temper my opinions. I’ve been very outspoken about the Debt Avalanche (which as far as I know, is a term coined by me, though the concept certainly existed before) method of paying off credit card debt. I’ve pressed this issue because a strong opinion is necessary to counter the massive marketing machine behind what is known as Dave Ramsey’s Debt Snowball approach. I don’t intend to get into the details here; visit those articles for discussions about why.

Photo: A Roger Davies

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