The internet is a wonderful and amazing testament to the ingenuity of the human mind. It has made the world smaller, brought people together and saved hours if not days of task time for busy people. When I was younger, I used to think the television was the greatest invention ever and would never be topped. I was proven very wrong upon my introduction to email and online flash games. The internet is the new king for my time wasting. We have also recognized that the internet also has its foibles. There are concerns about
privacy issues, child safety and the political polarization of fellow family members. In my opinion the biggest threat that comes from the online world is the presentation of misinformation. Not false information, which is also an issue, but rather misinformation. Information that is not properly presented, or properly vetted by the audience, which can lead to bad decision making. There are two ways in which misinformation is presented to online users. First, there is the issue of Facebook memes or click bait articles, which present themselves as valuable 'news' information, but are essentially trying to unethically sell you on a product or a cause. This form may have had its day, as people are becoming wiser to these ploys. Second, and the more dangerous culprit, are the anonymous advice givers. This month’s ‘for your consideration’ is a public service announcement which falls just short of warning you of an ongoing scam. The internet has provided a soapbox to every living being with a computer or a phone. Everyone now has easy access to their 15 bytes of fame. For better or for worse, it’s human nature to want to find a way to be important or to have value to someone else. Even when that means exaggerating your knowledge or expertise. This is not a warning about catfishing or predatory people using the internet as a tool, but rather the innocuous advice people give out online. Flat out inaccurate information disguised as friendly advice. Not necessarily malicious, but certainly dangerous. Consider the quaint water cooler conversations of yesteryear. Bob from accounting giving a stock tip that ‘he made a killing on’. Whether or not he’s telling the truth didn’t matter. It was a good story, and there was very little affect it could have on a small audience with minimal resources to act on the ‘advice’. Now imagine the water cooler having an audience of thousands if not millions of people with the ability to act on the advice in real time. I’m guilty of self-diagnosing my medical issues. Dr. Google lets me know on a regular basis of all the things that are sure to kill me. Of course, my regular visits to my doctor prove that Dr. Google is a bum and I am a medical dunce. This doesn’t mean that there isn’t very good medical information available online. The problem is that most people don’t even know how to find what is pertinent to them. And even if we do find the needle in the haystack, we don’t have the knowledge to interpret what the information means. And this is not a bad thing, because the novice isn’t supposed to know how to find and interpret information we do not understand. We have very well trained, very well educated professional to do the work for us. But the new age problem is that we now have the laymen trying to figuratively, and sometimes literally, self-diagnose other laymen, as we all gather around the world-wide water cooler. My online guilty pleasure is to explore the inner depths of Reddit. If you are unaware of the site, imagine a giant community of message boards. There is an infinite number of subjects, groups and interests being discussed regularly. I frequent groups that discuss television shows I like, or sports teams I follow, or real-world communities that are part of my life. It’s a large social (albeit mostly anonymous) medium. After being part of the Reddit community for a couple of months I discovered that there are groups dedicated to the field of personal finance and financial planning. Since I enjoy helping people, I got involved with the online discussions covering a variety of planning topics. I responded to questions, giving what advice I could with limited information about the person who posted the question. I rarely mentioned that I’m a professional, but I had assumed it was implied. However, after participating in these groups for some time I began to realize something unsettling. The advice was not coming from professionals, but random individuals who acquired their knowledge from do it yourself style financial books, or worse yet, were repeating advice they had read in previous posts. Much of the advice given was not very helpful. In fact, a lot of the responses were too generalized, too assumptive or flat out inaccurate. Rarely did the advice come from a position of ‘based on what you are trying to accomplish, this is what you should consider’ and more often from position of ‘here’s what I would do if I were you’. My attention turned from helping the individuals asking questions to correcting the individuals giving the responses. If you spent any time online you can guess what the response were, and you can bet they were not ‘oh, thank you for correcting me!’. Trying to change the culture of these groups has proven to be an impossible waste of time, and I stopped trying and stopped frequenting the groups a long time ago. But my experience has not detoured me, but rather has emboldened me to continue to connect with, and help, as many people as I can. My confrontations with people online has made me realize that there is a major void in financial literacy and an understanding of behavioral finance. From all the cases I have worked on, I could see how some of the poor advice online would lead to a butterfly effect of bad decisions if the person asking for the advice acted on it. I realize that I can not stop working with people who need financial help in the real world, even if hope is lost in the online world. This article details a very extreme (but certainly not an isolated) example of how misguided online advice can be detrimental to an individual. If you don’t have time to read the article, it details how a bad piece of stock advice led to a pre-retire losing half a million dollars right before retiring. If this person worked with an advisor the situation would easily have been avoided. The point of this article is not to discourage people from educating themselves on any topics of interest. There is nothing wrong with starting your journey for information online. My warning is that there are plenty of reasons why the internet is not where your journey should end. Remember that the anonymous advice givers online don’t know you. They don’t know anything about your situation, your attitude about finances or your relevant financial history. More importantly, you don't know anything about them, or their true objective. They are just words on a screen. Anonymous people attempting to feel important by sharing knowledge they don’t necessarily possess. Again, their intentions may not be malicious, but the results can be. This is where personalized help becomes key, whether from a financial advisor, doctor, personal trainer, wedding planner and so on. It is important to recognize when your personal exploration of a subject has reached its plateau and developing a relationship with a relevant professional is the logical next step. Technology is a wonderful thing, the internet included, but technology is consistently proving that nothing will ever beat personal relationships.