Last Tuesday, I published a guest post from CJ at Wise Money Matters. The story contained an embarrassing error about taxes, one that CJ should not have made, and one that I should have caught. As penance, I wrote an explanation of how marginal tax rates work for Wednesday.
Meanwhile, Frank the “curmudgeon” at Bad Money Advice picked up on the error and justifiably posted it as an object lesson. I’m mortified that Get Rich Slowly earned the “honor” of being featured on Frank’s blog, but at the same time I’m glad. If this hadn’t happened, I might not have discovered his site.
Bad Money Advice has a single goal: to explore the world of financial advice, and to expose how bad much of it is:
If bad advice on money is widespread and followed we’re all in big trouble. If, to imagine a far-fetched example, millions of people were told to buy more house than they could afford, the inevitable housing price bubble might set off a crisis in the capital markets that could plunge the whole world into a recession…The premise of this blog is twofold: that personal finance advice ought to be taken seriously and that it needs to be a lot better than it is now.
I think we can all agree with that. Frank turns his attention to topics such as:
- Why home remodeling is a bad investment
- The impossibility of predicting stock market returns (in which he re-iterates average is not normal)
- All about inflation, deflation, and you
- Why you should buy index funds, not stocks
Frank writes with a smart and witty voice, and his advice is both clear and accurate. Although I’m sad to have discovered Bad Money Advice through having Get Rich Slowly featured there, I’m glad to have found it nonetheless.
An important reminder
Remember: I’m an average guy, and not a financial expert. I do my best to provide accurate information, but sometimes I slip up. When I do, please don’t be afraid to help me fix the problem. My goal is to provide interesting and accurate information. If that means I have to eat crow from time-to-time, then so be it.
For months, I’ve been searching for a better disclaimer at the bottom of my site. After our discussion yesterday about financial talking heads as entertainment, I realized the time had come to set things right. While browsing at The Digerati Life (an awesome money blog, by the way), I found a new disclaimer that I like very much. I’m going to use it too:
I do have strong opinions on certain personal finance topics, but I hope that it’s always clear that the underlying philosophy of this site is simple: Do what works for you. There are few “right” answers in personal finance. The best solutions are the ones that help you meet your goals.
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Great damage control! Their write up on you wasn’t too bad, respectful at least.
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Sounds like he enjoyed taking GRS to task.
I think your response was great. Besides, your regular readers know you are human and that NO source of PF information is infalliable (not even blogs that exist to point out money advice errors, obviously).
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Meh. I’m skeptical of the value of anything whose main purpose is to find fault with others.
Your blog is worth our time. His looks likes snide belly-aching.
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Don’t beat yourself up too much. At least you recognize your responsibility to your readers/viewers (unlike most financial analysts on the television). For me personally, it’s not the slip ups that bother me, it’s the whole boom in personal finance and the majority of its content.
A large portion of the PF blogs out there are providing information like:
- Spend less than you earn
- Don’t over use credit cards
- Know how much of a house you can afford
- Spending a lot of money on useless stuff is bad
Now I’m not saying that’s bad advice but what bugs me about the advice is the fact that apparently there’s a market for it. It is seriously disturbing that, in general, people need to be told to spend less than they earn. If there is a large contingent of the public that need that lesson I’m just shocked. I guess I shouldn’t be too shocked though, there are a lot of people out there trying to convince them that they can in fact spend more than they earn.
Either way, I think you are helping a good number of people JD. Stick with it.
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That disclaimer sounds largely untrue to me.
You say you’re not a financial professional, but last I checked, you’d quit your other job and now your full time profession is writing about finance.
You say, “…I’m not in the business of giving advice.” Maybe it’s true in a very technical sense, but you’re obviously trying to encourage certain behaviors and discourage others. That sounds like advice to me.
You say it’s a “personal blog”, but it’s not, not in the sense where “personal” is distinguished from “business”. Sure, it’s run by a single person, but it’s your small business.
Edit: After looking over that “Bad Money Advice” site, he’s not only pointing out bad advice as wrong, but being completely condescending towards not only the authors of the offending material, but towards the entirely of the population who doesn’t have the same financial background that he does.
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Michele, in the defense of Bad Money Advice, he’s generally pretty good natured about it.
He’s not looking to humiliate people, but rather to have some fun with them.
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I think @JBennett (#4) nails how I feel about this, too. Especially the “fine Scotch” part. Mmm… Lagavulin…
@Tyler (#6) — as I mentioned in our Jim Cramer discussion yesterday, this is something I’m wrestling with. I know that I’ve in some way become a personal finance voice. Part of me is uncomfortable with that. I’m well aware of these lines that I’m grazing (or crossing).
I don’t consider myself a financial professional, though. Not at all. I consider myself a professional blogger, one who writes about money. I have no problems representing myself as a blogging professional. I’ve been doing online journals for 12 years now. But the financial stuff? I consider myself an interested amateur at best.
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Gotta love the legal disclaimers. But you left out “results not typical”, “past performance is not a predictor of future results”, or my favorite from the coin collector commercials “legal tender in Liberia”.
Maybe you should just write a hundred or so pages of dry jargony prose releasing you of any and all liability, or even responsibility for your content and then include it as your “disclaimer” that everyone must agree to before reading anything you have to say.
Or just keep on doing what you’re doing and let the nit pickers to themselves. I agree you need a disclaimer, but the actual words don’t matter so much because anyone cognizant enough to read it probably figured it out for him/herself.
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You write a great blog with a solid following. I wouldn’t let anybody get under your skin.
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I really love that you can own up to when you make an error and just clear the air and move on. So many other bloggers would have gotten defensive or tried to justify the situation. This maturity really increases the credibiltiy of your site and advice!
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I like to use this site as a jumping off point. You introduce an idea about money and then it makes me want to follow all the links and find out whatever I can about each subject.
I think the great thing about the tax mistake in the guest post was by you explaining what marginal tax rates mean, I actually understood it. I never knew how I was taxed before (mainly because it was not interesting enough to me to look up.) So, in correcting a mistake I did not catch, you inadvertently taught me something I should know, which made me want to find out more. All big mistakes have a bigger lesson hidden inside.
Thanks for the great (and interesting) writing!
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You’re quickly becoming a very respected man in this field. Even the Bad Money Advice article about you is complementary of the status you’ve earned. I consider you a “finance professional” the same way Walt Mossberg would be a “technology professional”. I guess you could argue that he isn’t, but you could also see how a lot of people would think that he is. Remember that “professional” doesn’t imply excellence in a field, only that it’s how you earn your living. Just because you feel that you’ve got a lot left to learn doesn’t mean you’re not a professional.
But what’s the point of the disclaimer, anyway? To discourage people from suing you after following your advice? I doubt anyone’s going to win a lawsuit against you because you recommended index funds and the entire market went down, disclaimer or not.
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It is best to just ignore the haters. Giving them a microphone just makes them feel more powerful.
Whenever I get an e-mail from someone who has been to one of my seminars that is just trying to tear me down to make themselves feel more important I hit that magic delete key. It makes me feel better right away.
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Well, I actually like the idea of someone critiquing blogs. I wish someone would critique mine! I do think he serves a useful purpose. There is a lot of bad advice out there and flat out wrong facts floating around. And I also agree with him about fake maple syrup. Yuk!
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@JD (comment #8)
Sorry, but it sounds like you are just trying to side-step responsibility saying “I’m just a blogger!”
You’re not a “blogging professional”, you don’t write about how to build a better blog. You are a “financial professional”, you write about finances.
What others have said is true, “professional” means that you make money at what you are doing, and you clearly do. Cramer’s show has a disclaimer on it as well.
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Props to you for stepping up and addressing the issue head on. My attorney and accountant make mistakes too – I don’t like it, but I know they are human and as long as they are honest about it (and take corrective action) I will give them a hall pass. Your readers will do the same for you.
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From BMA’s post: “I understood tax brackets in grade school.”
Oh, please. Perhaps the assessment of the situation is right, but the hubris is mostly unbearable and a little unbelievable.
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Your disclaimer is pretty much common sense.
Great way to take maybe a bit of a negative view and turn it into a positive.
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Wow. I guess my mistake is going to carry with me for a long time.
I also must chime in and mention that I fully disclose in my “About” page that I’m not a financial professional. Here’s a copy of a particular portion. It hasn’t been edited in many months. Well before the article submitted to Get Rich Slowly.
“I am not, however, a financial professional. I’m just your average Joe who got deep into debt and wanted to change something about it. I’ve spent the last several months reading financial books, financial blogs, and getting advice from people who have shown the fruit of their labor. This blog is as much a journey for me as it is for each of you.
I hope you can learn some great ways to get out of debt and become wealthy through this blog, but since I’m not a professional, please don’t take any information here as professional advice. I cannot be held liable for any advice given on this site.”
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I agree with atexasgirl above. I find his post to be obnoxious, not really like “two 1800s gentlemen,” more like just one.
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all will be forgiven so long as you return the “bonus” money you received from the hits generating revenue during the time you gave the error. If not, we will force you to do another give away to recoup 90% of the revenue.
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The idea of watchdog blogs is pretty amazing, and is a great thing for bloggers. It means that bloggers are influential, and that people listen to them. Getting called out on a watchdog blog just means you’re important enough for someone to care, and should be a token of honor (nobody would notice if I made a similar error on my little blog). Anything that keeps bloggers on their toes and challenges them to do better is a good thing. I think JD realizes this which is why he posted.
Mr. JD, you are a class act. You are one of the handful of bloggers who surprises me pretty frequently, and more importantly, who I really sense is trying to constantly challenge himself to do keep doing better and push harder. Keep up the good work.
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While the idea of a site dedicated solely to calling out financial experts who give inaccurate advice is pretty cool, I think calling JD out on this one was way off base.
The second JD realized a mistake was made, which was within an hour or two after the article was posted if I recall correctly, he both corrected it and apologized for it. I don’t think that is something that he needs called out on.
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Just a quick note about remodeling, which he goes after…
There are many reasons to remodel, not just to increase your home value. We are remodeling our master bath (new tile shower, radiant heated floors, updated plumbing, adding a tub and increasing the closet size) for a multitude of reasons.
1) Price: between Craigslist, the economy and leveraging my building skills, this will cost us about $4,500 and a few hundred of my hard earned hours.
2) Value 1: The old bathroom was dated, and we wanted a tub.
3) Value 2: We love the home and location, we don’t want to move.
4) Value 3: This will increase the value of the home substantially, although maybe not to keep up with the current slide in value.
5) Value 4: Remodeling is cheaper than skiing and we enjoy it.
To each their own!
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Your explanation of marginal rates was good. However, you assume people know what effective rates mean.
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I have to check out this Bad Money guy. It sounds like a pretty easy gig to go around the internet and criticize!
The tax rate error was a very easy one to make – most people don’t understand it until they make enough money to be affected by it. As for anyone else catching it – good luck. The error was almost irrelevant to the post so it was very hard to catch.
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You know, screw-ups happen. We all live in fear of them! I wrote a post about the best way to figure your hourly rate and even though I know the material cold I was triple checking my figures.
Kudos to you for how you handled all this. And thanks for the intro to Bad Money Advice.
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Don’t forget to read up on exemptions to the Investment Advisor Act of 1940. I’m not saying you are exempt because I’m an LSAT and three years away from becoming a lawyer.
Aside from that, you are the opposite of what Cramer was built up to be (notice I blame the network more than the man) – that is humble.
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Don’t forget to read up on exemptions to the Investment Advisor Act of 1940. I’m not saying you are exempt because I’m an LSAT and three years away from becoming a lawyer.
Aside from that, you are the opposite of what Cramer was built up to be (notice I blame the network more than the man) – that is humble.
Forgot to mention good post! Can’t wait to reading the next one!
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No one’s perfect and blogging is not as easy as people might think.
We don’t have research departments and we do our best.
People should always do their own research first before taking any advice.
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I enjoy reading your site and think you have a lot of great ideas. I don’t consider it “professional” advice and I don’t think you portray yourself that way.
You are not held accountable for the advice you give on this site and don’t make money off of that advice. You make money from advertisers, your job is to provide content that will attract readers to the site. I find it ironic that he points out this very fact in his home improvement article in discussing TV producers.
On the subject of home improvement. I do agree that remodeling a house solely for profit is hard to do, especially in this climate. However, depending on your location, these improvements increase your quality of life and can somewhat be recouped when selling your house.
In my case, my home’s value has held up better than my investments and the improvements to my quality of life far outweigh the benefits of money I could have made if I had put this money into savings.
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You should really adopt that last paragraph as part of your disclaimer – I think it describes you the best. Your mantra should be a definite part of your disclaimer, it almost would be great even as a standalone – Do What Works For You!
“I do have strong opinions on certain personal finance topics, but I hope that it’s always clear that the underlying philosophy of this site is simple: Do what works for you. There are few “right” answers in personal finance. The best solutions are the ones that help you meet your goals.
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This was very classy JD.
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JD – Don’t get too cozy with the Bad Money Advice blog. I just visited and read some of his work. Enjoyable but it looked to me like someone could start a blog called “Questionable Commentary on Bad Money Advice.” Everyone has his or her knowledge gaps, including Frank “the curmudgeon.”
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An excellent resource to learn how to invest is
portfoliotheorie.com
It also explains the “advanced” parts usually left out. However, it is in German.
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I read your original post and didn’t understand the example. I did glean from the post the main point which evidently the author of Bad Money Advice was unable to do. I was very impressed by your response to the situation. I have to agree with Mr. ToughMoneylove though. I can’t speak for anyone else but I was not impressed with his blog. It’s an ok blog but it doesn’t really inspire me to take steps to change my financial situation. Thank you for what you do and please keep up the good work!
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