Advice from friends

This is the third article among a series of articles that I am writing about advice. The first article is about an interesting conversation that I had with my father-in-law and the second article is about advice from trusted source.

Friendly advice

Well, among the many advice that you may receive, one of the main sources will always be from your friends. This group of adviser includes your mates at work, your neighbour or your golfing partner. How dependable are these advice from your friends?

On one hand, these advisers do have a degree of dependability, and that dependability will increase if the friends are close to you, especially if they are family members. Discussing financial matters with this group of advisers will usually create some positive advice. The top three types of advice that can be sought from friends are:

1. Financial strategies - There are literally thousands of financial strategies, and many new ones could be uncovered during these discussions. It may also be a good sounding board on your current strategy, perhaps it could be tweak to improve it returns or it is just wrong and need restarting.
   
2. Support - With a group of friends, you could draw support when you need to, in particular if you find yourself in a tight financial situation.
   
3. Renewed focus and motivation - Sometimes the advice are not directly related to finance. It could the retelling of a story from a friend that motivates us and give us focus on our personal finance adventures. I guess that this one of the main reasons why so many of us are reading other personal finance blogs.

Their experiences in dealing with financial matters will also dictate their level of dependability. If your friends actually work as a financial planner or accountant or similar jobs, they have just upgraded themselves to be a trusted source.

On the other hand, these advisers may have a low degree of dependability, especially the adviser has a history of giving low quality advice. In this cases, all you could do is use their advice as an indication, and search for more supporting information. However, due to the low quality of the advice, spending too much effort would be a waste of your valuable time.

I have always found that discussing financial matters with my friends usually positive and generate ideas that would normally be forgotten or not thought of. I always look forward to these discussions.

As always, it is important that the advice that you received make sense for you in your situation, and seek supporting information before acting on the advice.

I shall be writing about random advice in the my next article.

Photo by Steve Woods