How to Trust Someone

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Stop what you are doing and read the following statement three times.

Don’t trust anyone who is giving you advice on a decision that he/she wouldn’t make.

It’s so obvious isn’t it, but many of us (myself included) fall into this trap on a regular basis. At the store, we let the salesperson convince us that buying is the right decision. Routinely, we let our financial planner tell us which investments to make, and every day, we allow advertising to strengthen our desire to spend.

Next time the opportunity presents itself, ask the simple question – Would she have made the same choices given the situation?

Asking a Simple Question Makes Cents

It’s actually very powerful. Here are two examples of how it will help.

  • A Better Restaurant – Some restaurants are so dirty and messed up in the kitchen that you would never eat there if only you knew. Whenever I see employees eating there, that’s a great sign that the food is safe. Many people also ask the waitress what’s good. Is she suppose to imply that some food aren’t as good there? Why not ask her – What would you have in this restaurant? At least it’s much closer to an honest opinion.
  • Financial Advisors – They might not purposely lead you to bad investments, but their job is to recommend investments to you and make more money for their firm and for themselves. When they make more money, there’s less for you (their compensation has to come from somewhere right?). Next time you are given a recommendation, ask specifically whether he or she will invest into the fund and why.
  • The House – I spoke to a realtor once who tried to convince me that the school district the house belonged in was good and that she lived in the neighborhood. The argument totally fell apart when I asked her where her children went to school and she told me that she takes them to a private school. If she doesn’t trust the public schools in the area to give her children a good education, how can she say that the schools are good?

There’s already so much unknown about any decision. If the person trying to convince you couldn’t personally endorse it by putting something on the line, maybe it’s time to move on.

It’s strange that I am discussing this, because I am in the business of giving advice too and in an indirect way, I’m asking you to trust what I write. I am not a financial expert as you know, but I promise that I will do my best to give you solid advice based on common sense, experience and research. More importantly, the stuff I write about is what works for me. At the end of the day, how you want to spend, what you invest in and how much to save is all a personal choice. All I ever want to do is to show you where you can be with years of financial responsibility. Whether you want it or not is up to you.

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{ read the comments below or add one }

  • phill says:

    why not make your own decisions? And just take suggestions instead of advice.

  • Avery says:

    The problem is that when we ask for advices on a question, normally,we have no other solutions ourselves. When there is one advice, we will take it, because we are eager to get started.

    If we know there is a better private school, and we can send kids to that school, why not? The question is that normally we do not know that much information.

  • Wilson Pon says:

    Yeah, we shouldn’t easily trust someone, although he/she is our best friend. Sometimes, it’s better to experience ourselves than believing on other people dishonest opinions…

  • kenyantykoon says:

    i agree with you. i prticularly detest people that tell you how to run your business or handle your investments and at that time they have absolutely no experience in the said fields. but i am also guilty of the same…. 🙂

  • John DeFlumeri Jr says:

    That is certainly the Acid test. If they wouldn’t buy it themselves, why would you buy it?

  • Jamie says:

    The example of the financial advisor is especially useful. Since they can invest in anything that you can, chances are good that they will be able to know whether it’s an “investable” fund or not. While even the good funds lose money, you know that your interests are being looked after.

  • Financial Samurai says:

    What about personal finance bloggers? Do you find it strange that there are some very successful PF bloggers out there who make literally $50,000 a MONTH, write about how they have a goal of paying off their $180,000 mortgage in 5 years, and scrimping to buy a $18,000 car?

    Isn’t this disingenious and very misleading the blogger is pretending?

    • MoneyNing says:

      I’m not sure who you are referring to but the numbers you pointed out somehow doesn’t seem possible.

      The $180,000 mortgage is going to need $30,000 each year even if there’s absolutely no interests. That leaves $20,000 a year for everything else.

      Also, the $50,000 income needs to be taxed, so it just doesn’t seem possible. Maybe there’s some other income that wasn’t really fully discussed?

      • Financial Samurai says:

        Hi Money Ning, the PF bloggers I mentioned make $50,000/month, or $600,000/yr from their sites, and not $50,000/yr.

        I’m surprised more people don’t question their authenticity. If you’re making $600,000/yr just from blogging, how can you write about trying and having a goal to pay off a $180,000 mortgage in 5 years, and go through discipline and sacrifice? He can pay off his mortgage in 1 year and still have plently left over if he wanted to.

        Same goes for the one scrimping to buy a $18,000 car, when income exceeds $50,000 a MONTH.

        I don’t get it. It’s like zombie readers following.

        • MoneyNing says:

          It does seem strange that someone making $50,000 a month would leave their $180,000 mortgage open for that long, but there are many reasons why people don’t pay off a mortgage. I’m guessing of course, but the $50,000 may not be consistent month after month, or maybe the blogger has use for those funds in the immediate future. Also, there may be expenses that come with the website or that person may believe that they can get a better return with investments.

          As to scrimping, I think it has more to do with personality than with wealth. Someone who is frugal will always tend towards saving regardless of how much money they have. That person may not need to sacrifice much to buy a $18,000 car, but it doesn’t mean that they won’t watch their expenses carefully.

          • Financial Samurai says:

            That’s true regarding lifestyle. For example, one blogger, who we all know talks about paying off his $35,000 debt 11 months early (39 months instead of 50) as quite an accomplishment. He talks about setting goals and beating them. Well, that’s impressive if you’re only making $50-60,000 a year. But, it’s pretty unimpressive if you’re making $600,000 a year.

            I know that it’s a business, but there needs to be more transparency, otherwise, I think it’s very misleading.

          • MoneyNing says:

            I’m not that blogger so it’s hard for me to comment when I don’t know the full situation. However, I agree that if a blogger is going to share personal stories as inspiration, the more transparent, the better so readers can put everything in context and perspective.

  • Samson says:

    Solid advice. I used to just try everyone at their word until I got burned a few times before. Nowadays, I take whatever people say with a grain of salt because it’s too easy for them to be careless and just say whatever seems standard without really thinking.

  • Craig says:

    It’s difficult asking for advice, because a lot of times its from people who have never been in the situation but we may trust them since we are close to them, even if they aren’t the best people to ask.

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