Consider the Source!
Financial knowledge is power—the more you have the better you can protect yourself and your family. Conversely, lack of knowledge is weakness. Everyone wants to learn and to be more successful. But everyone knows that “you can’t believe everything you read” and many things on the Internet just aren’t true.
So how can you tell who to trust for information and whether information you are getting on the Internet is reliable? Here’s the low down on checking any source!
Where does the money come from?
On websites you can often find this information under “About Us” but other times you may need to do further research. This is absolutely key to your evaluation of any source—all groups are naturally influenced by self-interest and self-interest can lead to bias, whether it is intentional or unintentional. Some sources are funded by advertising, but some require you to buy a monthly service or buy their products, books, DVDs, etc. Be wary of any advice you have to pay for and pay attention to the points that follow!
Who’s behind that curtain?
Remember in The Wizard of Oz movie when Oz, talking through a scary image projected by a giant special effects machine, tells Dorothy “Ignore that man behind the curtain?” An official-looking Internet source might turn out to be one or two individuals with no particular credentials or expertise. If a source is a company, a web search should reveal the state in which it is incorporated and you can go online to that state’s Secretary of State to see who is behind the company and other public information.
What do they know and how do they know it?
Many people are self-proclaimed “experts” without any particular education or experience in their area. Especially in these days of online self-publishing, writing a book or having one published doesn’t make an expert. Many of the well-known financial “personalities” have no particular training or experience in personal finance, they simply have backing from big media and other companies that make money from them. These companies can pay for ghost writers to write books for their “experts” to publish under their names. Look at the actual experience and education behind any source. Suze Orman’s only financial experience was as a stock broker, she just has a significant other with major media connections.
Do the qualifications check out?
For individuals who list initials after their names, use your search engine to find out what they mean and what is required to get the designations. Just type in “what does CFP mean?” Some credentials and certifications may be an easy “rubber stamp” for a fee while others require in-depth education, references, ethical standards, continuing education obligations and significant experience.
Is there a bias or slant?
This goes to self-interest, which is usually monetary. For example, information about a particular vehicle might be more unbiased and trustworthy coming from Consumer Reports than from the manufacturer’s website. The manufacturer is motivated by sales and profits whereas Consumer Reports makes its money from subscriptions that are based on their impartiality. Industry sources generally provide excellent information, but you should always be aware of the potential “slant” to the information from a source with self-interest.
Is there a belief system or philosophy?
For instance, a website backed by a religious group will naturally put out information that is consistent with the group’s religious views. There’s nothing wrong with that, but it would still be helpful to know this philosophical stance so that you can compare their information with another, non-religious source.
Check it out!
The Better Business Bureau, your state Consumer Protection agency or office, state licensing boards for various professions, Angie’s List are online reviews are just a few sources. When in trouble, people often tend to eagerly accept any outfit that claims it can “help” us… unfortunately, this is when we should be the most skeptical and least trusting.
The bottom line is that there’s a dizzying amount of information available to us as consumers and students of personal finance, but it’s not all created equal. So be a bit skeptical and check out your sources before you believe what they say or pass on their information!
(c) Hummingbird Credit Counseling and Education, Inc. 2012. All rights reserved.