It's objectively getting harder for young people without huge amounts of family money to attain many of the traditional markers of financial success. Since 1965, median household income has risen a modest 15 percent. Home prices shot up 118 percent in the same period. If prices had increased at the same rate as income, today's median home price would be less than half of what it is. And that's not even mentioning the ballooning costs of health care and college.
No wonder so many people struggle to attain their financial goals, spawning a seemingly endless array of experts and gurus who promise to teach them how to do it. Lots of their advice is helpful, but according to a new poll of more than 1,000 Americans by financial advice site I Will Teach You to Be Rich, a lot of it...really isn't.
Common pieces of financial advice people hate to hear.
The survey asked respondents to share which tidbits of financial advice they had received in the past, and also to weigh in on which tips were useful and which they found toxic. You will probably recognize some of the most popular advice, such as "make coffee at home instead of buying it" (heard by 54 percent of respondents) and "start saving when you're young" (given to 46 percent of people). You're also probably familiar with the three common tips the most respondents felt were toxic:
Never dine out: 44 percent said this is toxic advice
Credit cards are bad: 40 percent called this tip toxic
Renting a home is a waste of money: 36 percent called this one toxic
In fact, the first of these toxic tips might even remind some people of a brouhaha a few years ago, when several moguls suggested that Millennials can't afford to buy houses because they spend too much on overpriced avocado toast. As many pointed out at the time, Millennials' home-buying problems have way more to do with a shrinking supply of starter homes, sky-high student debt, and stagnant wages than too many brunches.
According to I Will Teach You to Be Rich, telling people to always eat in isn't just oblivious -- it's not even all that helpful. "Focusing on $5.00 money questions is distracting. Focusing on bigger financial wins will lead to more success in the long run," the blog notes.
They're not wrong, just oblivious.
Which is likely why so many respondents found these popular tips so toxic. It's not that the advice is wrong, exactly. Cutting down on restaurant meals will leave you with more money in your pocket at the end of the month. Owning a home is a great way to build wealth, if you can afford it.
It's just that this obvious advice is often handed out without taking into account the tough choices people have to make. Can you really blame a 20-something barely scraping together rent in a city where saving enough for a down payment would take two lifetimes for splurging on a meal out now and then? And when they put that root canal or car repair on their credit card, they probably did it with knowing dread.
Shaming people about suboptimal decisions they've been forced to make by circumstances largely beyond their control is not helpful. It's toxic. Nor does it provide actually meaningful strategies for a more prosperous future.
That's an essential lesson for professional financial advisers of all sorts, but it's also a helpful reminder for anyone lucky enough to be living comfortably. Before you dole out advice, consider not just what makes sense in an ideal world but what's actually possible for the person you're speaking to.
As I Will Teach You to Be Rich stresses, "financial advice is often given freely by well-meaning friends and family. Though well-intended, much of this advice may not always be helpful."