5 Important Questions You Should Ask Yourself When considering Financial Or Investment Advice Online

Unlike previously, it comes with an abundance of information available on the web today on almost any subject you care to learn about.

Thus, it is little wonder that before we make any decision with regards to our personal finances, be it purchasing a new insurance policy, investing in a particular product, or registering for credit cards or home loan, a lot of us do online investigation as part of our due diligence.

With inexpensive and talent barriers required to create and run websites, there is unfortunately a good amount of bad advice, fake news, poorly copied articles, and sneaky sales pitches everywhere – alongside plenty of gems and useful content.

Thus, it is more essential than ever before that consumers have the ability to evaluate sources and discern for themselves what advice to take and which to ignore when making important personal finance decisions.

#1 Does The Source Know What They're Talking About?

It's important to evaluate content by themselves merits, but having an understanding of who's behind the content can bring up warning flags that indicate if a certain web site is unreliable.

In “The Art of Thinking Clearly”, author Rolf Dobelli sums this in this way: “True experts recognise the limits of what they are fully aware and just what they don't know.”

Just as you shouldn't take medical or health advice from a content marketing website or MLM distributor, I wouldn't trust articles about CPF compiled by people who are clearly not from Singapore and write as all they are fully aware about CPF, or Singapore for that matter, comes from online sources.

You should probably think twice if you read articles by an individual who makes confident predictions about what's precisely going to take place within the global economy and claim that they can have “insider” information from a number of sources.

The point here's that the topic being tackled, and also the information presented should match the writer's expertise.

Professional journalists are a great example. They don't claim that they can have any special insight or domain expertise, but they do in-depth research, ask the right questions, and offer the facts.

Also immensely valuable are insightful bloggers who share their real-life experiences in financial planning and investing.

#2 Do you know the Writers' Or Company's Agenda And Interests?

Understanding who's behind the content you're reading and just what their interests are, financial or otherwise.

Is someone dismissing a DIY investing approach too easily simply because they hope to sell a managed fund they represent? Is the article you find out about a heart-breaking example just a sales hype by a financial adviser? Is a website not even providing you with a complete picture from the shortfalls of the certain product because they have existing commercial arrangements?

This isn't to state that valuable, quality content can't be produced by companies that offer a product or that writers cannot remain objective should there be financial interests.

But as readers, you should be conscious of any potential conflicts of great interest. Companies must do their part by being upfront using their users about financial arrangements so that readers can be armed with all the facts and choose for themselves.

#3 Every Person Is exclusive, And What's Suitable For Someone May not be For You

Just because it wouldn't create a lot of sense that you should buy a two-seater sports vehicle if you need to ferry your family of 5 around, though it might be a perfect car for another person.

Before seeking to replicate another person's entire investment portfolio or buy the exact insurance policies they have, you need to understand if these choices are suited for neglect the and protection needs, including time horizon, risk appetite, and financial ability at this point over time.

Understand the principles under which others make their decisions, and apply those to your personal unique situation, and speak to a trusted professional much more doubt.

#4 What Is The Advice Giver's History?

Whether it is a financial adviser, financial blogger, or netizen you meet around the forums, it would be prudent to look at their history and find out if their advice stands up.

We had that friend (or maybe more than one) who had been posting every second day about Bitcoin and other cryptocurrencies which were going to make them rich. Might want to sign in to see how those “investments” of theirs are supporting.

It is to make mistakes, and people who still learn from their mistakes would come from times during the difficulty much wiser and capable of handling other challenges in future. But these folks are also humble and show prudence in advising you how to handle risk.

#5 Are Claims And Advice According to Data?

Finally, it's well and good to articulate concepts that sound good on paper, but it also needs to be supported with actual data and facts.

We can always disagree about philosophies and approaches, but we can only do so on the basis of actual data, otherwise, any claim or discussion would be as useful as discussing tactics on how to defeat Thanos. Fun for sure, but completely not applicable to real-life.

When evaluating the use of data, readers should also on the lookout for writers who “shoot the arrow after which paint the bullseye”. In other words, selectively pick data points that support their hypothesis.

Levelling Up Our Media Literacy As We Level Up Our Financial Literacy

We continues to depend on online investigation once we come up with feeling of the bewildering variety of products, services and approaches to allow us to make smarter, smarter financial decisions.

And to make sure we can make the best use of these resources, it is a necessity for us so that you can think critically, read widely, and set our trust in the best sources of information.

Here at DollarsAndSense, we'll continue to strive to earn your trust and support every single day, one article after another. For those who have any comments and feedback for the team, you can always reach out to us.