You've probably clicked on a headline like this — The Amazing Story of How One Millennial Paid Off $200K in Student Loan Debt in 18 Months — in the last few months.
It tells the inspiring tale of how one millennial went to extremes to pay down an Everest-size mountain of student loan debt. You know, the guy who ate ramen noodles every night and lived with four roommates, or the girl who lived in a camper van and got paid to tour the country while writing about her adventures on her blog, or the couple who "side hustled" 10 different jobs for more than 18 hours a day.
My personal favorite is the internet marketing "genius" who was paid tens of thousands of dollars each month through affiliate marketing because — after all — you, too, can create a killer internet marketing funnel! Sure.
As a member of the millennial generation, I ate lots of ramen noodles, but never connected it with paying down a huge loan.
Stories like these do create conversation and debate, of course. They highlight just how emotional financial topics such as student-loan debt, for example, can be.
However, they also make paying off debt appear as if it's simply a quick fix, a matter of sheer determination to make it all go away. I call these people "eagles." Eagles are those too proud to bear the burden of their debt. They are willing to throw every available dollar at their liability, even if it means extreme sacrifice.
In many ways, their dedication is to be commended. But there's a big problem with being an eagle. It's not practical. And for most us, being impractical is not realistic. Going to extremes by its very definition doesn't fit comfortably in one's life. That makes things especially dangerous when these suggestions are passed off as tried-and-true financial advice.
"Can you imagine taking legal advice from someone who blogs about the law? What about medical advice? I hope for the sake of your legal future and health, you wouldn't. So why is an exception made for personal finance?"
How and — more importantly — why is this happening?
Well, we now live in a world where, thanks to social media and the internet, financial information, as well as our personal relationships with money, have become so democratized and destigmatized that anyone can write about an individual success and pass themselves off as a financial expert.
This is especially true for millennials. Our generation is most comfortable using today's technology and sharing things that were once considered taboo by older generations. This means that instead of looking at objective criteria, such as one's experience, education, licenses and credentials, we now view the "financial expert" as someone who is defined by subjective elements, such as the number of likes, followers and affiliate marking opportunities and book deals received.
It's quite astonishing how this shift has emerged in the field of personal finance, a critically important area of our everyday lives. Can you imagine taking legal advice from someone who blogs about the law? What about medical advice? I hope for the sake of your legal future and health, you wouldn't. So why is an exception made for personal finance?
One answer could stem from those inherently emotional components surrounding the subject. I find this ironic, because financial professionals are trained to remove emotions from a client's decision-making processes. Yet, as we learned through the actions of these eagles, it's all about emotions for them, and to be honest, I can't blame them for feeling the way they do.
I hear it from my friends, family and clients all the time. For many of us, our financial worlds came crashing down at the very start of our adult lives. My generation was faced with the brutal realization that our expensive educations wouldn't be the financial cure-all we were believed they would be. In reality, we found ourselves holding the proverbial bag, standing financially naked in a labor environment we weren't prepared for. However, through times of adversity, great stories are made. And if there's anything I know about my generation, it's how creative (and resilient) we are.
I did not write this column to be an all-out assault on personal finance bloggers, content creators and self-described financial experts.
I do appreciate and respect how helpful their efforts can be when applied correctly and comprehensively. In a society that's devoid of financial education, it's promising to see both professionals and non-professionals contribute to the growing trend of financial literacy. Without a doubt, we need financial education more than ever.
However, I can't help but urge caution with how financial content is being created and consumed. There's always a danger that comes from painting complicated financial solutions with too broad of a brush, especially when dealing with the more complex areas of personal finance, such as investments, taxes and estate planning.
In fact, regulators, such as the Financial Industry Regulatory Authority and the Securities and Exchange Commission, exist to protect the public by ensuring that the content professionals create follow the "rules." Therefore, no matter how captivating the financial content may be, I ask that you not to mistake it with the advice of a qualified financial professional.
— By Douglas A. Boneparth, president of Bone Fide Wealth and co-author of The Millennial Money Fix