Main point of today’s posting is: you are what you read.
There is a ton of finance and investing information out there. Don’t pollute your mind with bad investing strategies and philosophies. The quality of what you read and listen to is far more important than the quantity. So it makes sense to learn to evaluate the quality of what you read and hear.
Regarding this, here are some thoughts:
1) Tune out network programming in favor of classic books. MSNBC is fine, but MSNBC and most broadcast cable news programs don’t really provide a whole lot of insight or education – they produce a combination of commentary and entertainment. Instead, what makes more sense would be to invest some time in reading classic works which facilitate building wealth. The Intelligent Investor by Jim Graham or The Millionaire Next Door are good starting places.
2) Take pessimistic gurus with a grain of salt. A couple of examples of pessimistic gurus are guys like Swiss economist Nouriel Roubini and American investor Jim Rogers. Both of these persons have publicly made pessimistic comments about the economy, arguing that hyperinflation is sure to impact the dollar or that farmland is the best asset to hold in the future.
While its true that the economy has been challenged over the past couple of years, some people make a mistake by putting too much stock in a pessimistic perspective. For example, had you listened to Roubini and Rogers, you might have sold dollar denominated assets or bought gold or silver in 2009 and thus missed very profitable opportunities in stocks over the past year. Basically, take pessimists with a grain of salt. If you buy into their perspective too much, it can blind you to important investing opportunities.
3) Ignore most personal finance blogs. Being a personal finance blogger, I know this sound like a criticism of the blogging community. However, unless the blogger you are reading is willing to make their networth public and they have above average wealth, don’t bother with their blog.
The reason for this is you have no way of judging the quality of bloggers writing for your own wealth building. A great way to judge the quality of someones reasoning regarding wealth is if they are able to implement correct strategies to significantly build their own net worth. Bottom line, if they don’t disclose and aren’t richer than you, ignore them. Most bloggers don’t disclose and aren’t richer than you, therefore you can safely ignore their writing.
Bottom line: you are what you read. Carefully evaluate the quality of the information you take in.