Rich Dad Education Scam #4:
Watching Financially Oriented Cable Networks Will Increase Your Financial Knowledge
Jon Stewart, a noted comedian, devoted an entire segment of his popular program The Daily Show in 2009 to expose just how bad the advice of financial cable networks were in the run up to the crash of 2008. He simply reran footage of these so-called “experts” and what they were telling you weeks and even days before the crash. After showing several notably bad calls made by these experts, Stewart joked that had he only followed their advice he “would have a million dollars today… provided I started with 100 million dollars.”
Financially oriented cable network programs can be extremely entertaining. Seinfeld also was very entertaining. While you would not trust George Costanza to manage your finances, numerous individuals make financial decisions based on the information they hear on these programs. To make matters worse, these individuals will often proudly go to the proverbial water cooler at work and pass off their “financial knowledge” to others based on a 15-20 second sound bite they heard the day before. They think they have become financially savvy because they can regurgitate the opinion of a talking head on TV.
Investors and traders are constantly seeking information that can assist them in their decision-making process. Unfortunately, they seldom take the time to develop their own financial acumen and instead look for easy answers in the form of someone else telling them what they should do. Unwilling to take the time to develop the skills necessary to make their own financial decisions, they put their trust in what they perceive as experts. After all, if a person is on television, they must know what they are talking about, right? These naive investors are similar to gamblers who are taken advantage of by the sports betting pick industry, one of the biggest scams in America.
Gambling and the Selling of Picks
Desperate gamblers often fall prey to the pick-selling scam. So desperate for a winning bet, they fall prey to this scam after hearing that a certain individual is a Vegas Insider who has a mortal lock for an upcoming game. This insider “lock” is guaranteed and will make the gambler a small fortune if they are willing to pay the insider a small fee. The gambler falls victim to this scam due, in no small part, to the willingness of the individual to assign a level of expertise to the Vegas Insider. After all, they are a Vegas Insider so they must know what they are talking about, right?
The process of a gambler’s willingness to hand over their decision making powers to another individual is eerily similar to that of an investor at home who bases their decision from someone on TV:
- They assign a level of expertise to another individual, whether it is a Vegas Insider or a Financial Expert.
- The often suspend their own logic or analytical ability to determine their course of action. They may claim that they came to their own conclusion, but this is usually just a flimsy rationale to support the “expert’s” advice.
- They then demonstrate a level of trust in the expert, by acting upon the advice, whether through placing the bet or the purchase of stock shares.
When someone calls the sports-pick industry a scam industry, you will find numerous nodding heads. After all, they are profiting from the gullible and desperate. If someone had the audacity to point out the similar nature of financially oriented cable network programs, then you might have a fight on your hands! After all, they wear suits and ties and have impressive statistical arguments to back their cause. Vegas Insiders have numerous stats to backs up their claims as well.
Financial Television Programs Have No Interest in Teaching You Anything
Financial television programs have one overriding interest – achieving the highest ratings possible. They are created to entertain the public and their success is gauged by ratings and not by the accuracy of any claims that are made. The individuals that make claims are often chosen simply because they look good on TV or because they are entertaining. When you analyze their core motive – the achievement of higher ratings – you might conclude that they actually have a vested interest in keeping their viewers ignorant. If the viewer actually became financially intelligent, able and willing to make their own informed decisions, then they might not need to tune in anymore.
Rich Dad Education goes to great lengths to teach their students how to invest and trade. Simply telling a student that they should buy company XYZ or place a certain trade does the student no favors. Such a process would keep the student ignorant, making them unable to develop the skills necessary to make their own investment decisions. Rich Dad Education strives to teach students the process of evaluating stock charts, how to identify trends, determining where key levels of support and resistance are, identifying the proper entry and exit points are for a trade, and managing an investment once it is made. In essence, the goal of Rich Dad Education is to provide a student the knowledge and training so that one day the student is self-sufficient and Rich Dad Education is no longer needed.
Whether or not you decide to acquire an education from Rich Dad Education, you should strive to increase your financial awareness. Put trust in your own ability and be wary of placing your trust in those who simply tell you what to do, instead of teaching you how to do it. If you want to be entertained, go to a movie. If you want to become a successful investor, then take the time to invest in yourself.