I read a couple of interesting articles recently over at the Simple Dollar – the first article was about a recent car purchase, a pretty good analysis of why they ended up buying the car they did. This post had a lot of comments that were critical of the fact that he bought the car using financing even though he had the cash. Many of the commenters took him to task because he had said so many times in the past that you should only buy something if you can pay cash (and can afford it). The second post was talking about money management from a risk perspective and addressed a lot of the comments from the first post.
The interesting thing I got out of these posts and the comments was that many bloggers (not just the Simple Dollar) often take on an authoritative tone and hand out pearls of wisdom as though they are the 10 commandments. One common situation is someone who has a lot of debt and then realizes they need to start cutting their expenses and paying off the debt. All of a sudden they become experts in the field and start doing ‘top 10 [incredibly obvious] ways to save money on groceries’ or whatever. I used debt reduction blogs as an example but this is common with all types of blogs.
One of the keys to being an expert is to sound confident that you know what you are doing. As Mr. Cheap pointed out so well in a post called “absolutes” – you can’t be an expert if you are wishy washy on what you are saying. You have to be firm that your idea or method is not just the best way, it’s the only way and any other possibility will end up in disaster. Unfortunately very few things are all that clear cut – this is why “rules of thumb” are often quite useless – they just don’t apply that well to most scenarios.
In the case of the Simple Dollar – the author has used the blog to journal his own financial life from being heavily in debt to his current status of being very successful financially. A large part of his financial success has been to sticking closely to “rules” like only pay cash for items which is a pretty good rule to follow if your number one goal is to pay off debt. Now however, he’s come to the point where the rules that apply when heavily in debt, no longer apply to the same degree to someone who is doing well financially.
It was interesting to read some of the comments from readers who felt “betrayed” that Trent would go against his own advice from the past. I think that he made a good financial decision that makes sense for him and his family – it’s the “betrayed” readers that need to look at who they put up on a pedestal and why. At the same time if a blogger decides to put themselves up on a pedestal then they should make sure it’s not a high one – you don’t want to have big fall to the ground.
One could make the same argument about the recent Derek Foster uproar when it became public knowledge that he sold all his “hold forever” dividend stocks. While I still question his move to cash, I also would have to question anyone who reads one investment book and plans their entire investment strategy around it without doing any other research.