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The Problems with Generic Financial Advice Thumbnail

The Problems with Generic Financial Advice

Insights Retirement Planning Finances and Planning for Women

You can find several personalities on social media, YouTube, and the airwaves offering generic financial guidance.  Dave Ramsey and Suze Orman star in these spaces.  Is the guidance they share “good enough” you should just blindly follow?   We discuss that on today’s Wealth Wednesday.

Watch Now:  The Problems with Generic Financial Advice


  • 0:00 – Intro/Disclaimer/Welcome
  • 0:49 – The basics of generic advice
  • 3:29 – Is all debt bad?
  • 6:54 – When client’s drop the names
  • 10:40 – The problems with generic advice.
  • 12:49 – When the details matter
  • 15:21 – AI’s impact on personal finance
  • 16:03 – Wrap up/Outro

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Mention the names Dave Ramsey or Suze Orman to a group of financial advisors, and you will hear a variety of reactions.  Some of them might not be safe for family dinner time.  Is what they tell the masses good advice, or should we step back and digest it in more detail?

Good Fundamental Principles

The main message of these online personalities follows some very basic principles.  

  1. Spend less than what you earn.
  2. Build an emergency fund
  3. Save what you can – especially when there are employer-matching contributions!
  4. Eliminate and avoid debt (especially high-cost debt),
  5. Be generous.

All of these are sound basic principles that our advisors here at Commonwealth also believe.

Many people have trouble with the basics.  And the guidelines preached by these personalities may help them focus on what is broken in their lives.  After all you need to walk before you can run!

The Hardline Debt Message

Most of these personalities are laser-focused on debt.  There are few, if any grey areas when they are addressing it with their callers.   Their message:  Debt is bad, and you need to eliminate it and avoid it.   Their emphasis on this subject rings true for many of their callers and listeners.  Americans have a debt problem.

Debt does two things.   First, it costs you money. You are paying someone else for the privilege of using their money.  It can make the cost of purchasing a car or home far greater over time than just the purchase price.  

Second, debt increases your risk level.  When things go wrong in your life, your debt payments can put a lot of pressure and stress on your situation.  If, for some reason, you can’t work, you still owe those lenders.

Some items, like homes, cars, and even higher education, cannot be purchased without using debt. A mortgage is not necessarily a bad thing.   Unfortunately, many people get into trouble with higher-cost consumer debt. When you reach a point where you are financing your daily life, all debts become a problem.

Even though not ideal, not all debt is bad.   Using credit cards is not necessarily a bad thing either.  But you must manage it well.  

Beware of the Hype and Extremes

One area of caution we do want to share.  These personalities are making money from advertisers of their shows, their workshops, books and speaking engagements.  In order to generate views and attract listeners, they often share extreme examples.

And these extremes will also include some of the details used to illustrate a point.  Not long ago one of them talked about earning a lifetime average return of 12% per year to drive home a point.  Keep in mind, the 70+ year average annual return of the broader stock market is roughly 10% per year.  The higher rate over a long period of time seems unlikely.

Eventually the Details Matter

Once you have a good grip on the basics, the details matter.  When we speak to people who tell us, “I heard Dave Ramsey talking about…”   It is usually a sign a person is taking a stronger interest in their financial well-being and future.  

The complexities can also stand in the way of making real progress.  Working with someone who knows the technical components of personal finance with the skill to understand how all the parts fit together adds value.   We would love to discuss how we can help.  

Appearing in this video...

Julie Daley, RICP®

Julie is a financial advisor in our St. Clairsville Office.

Tyler Szafran, CRPC®

Tyler is a financial advisor in our Wheeling Office.

Neal Watson, CFP®

Neal is a financial advisor in our Marietta Office.

Meet the rest of our team...