Is Reddit Actually the Best Financial Advisor Out There?

Our parents had “Dear Abby”. We have Reddit. The tone is certainly different, but the underlying principle is the same. We’re confused and just want someone else’s guidance, even complete strangers. Reddit, which if you aren’t familiar is best explained as a message board, although some will be loftier in its description and call it “a self-correcting marketplace of ideas”.

Regardless, you pose a question, share a story or pose a theory and millions of other people around the world can respond in real time. No matter your interest, from money to reality TV to politics to cooking, Reddit has got you covered. So, it’s no surprise that people turn to Reddit to crowdsource financial questions. There are threads (discussions) on everything from investing to credit scores to dealing with bills in collections to how to handle financial abuse with a family member. One person even did an AMA (Ask Me Anything) about being from “Old Money”. But the question is: how much should we use and trust Reddit as a financial resource?

In an effort to find the answer, I turned to Reddit and posed this question:

How do I find a non-sleazy financial planner?

Seeking best practices for finding/vetting a financial planner (human) or a robo-advisor?

For background: I’m late twenties. No debt. Healthy net worth, but I don’t have a $1,000,000+ in assets (yet), so the financial planner would need to have a lower asset minimum, which does disqualify quite a few. I’m looking to have my current investment strategy analyzed/tweaked and a neutral third-party to help offer guidance for combining my financial life with my long-time partner (who has student loan debt, I don’t) after marriage.

Unfortunately for me, Redditors that day didn’t find it a compelling question because I only received one response from someone who said they don’t see value in financial planners anymore. It’s also the response I expected from Reddit’s personal finance thread, because it’s primarily comprised of DIYers when it comes to finance.

 

Reddit can provide immediate help.

With my own question proving to be an epic fail, I started lurking on other threads to gauge the quality of responses.

Employer isn’t paying on time, can I quit and get unemployment?

This question received 20 comments in 12 hours. The answers largely encouraged the Original Poster (OP) to call the local unemployment office and inquire there, but one commenter offered actionable advice:

“In a lot of places, not getting paid is a legitimate reason to leave your job and still get unemployment. Try calling your local unemployment office. Secondly, try to document in writing the fact that you’re not being paid. If you can, send an email to whoever’s responsible for payroll with something like ‘My paycheck is currently [x] days late. Since the beginning of the year my paychecks for [date 1, date2, date3] were [n] days late. This is causing me a lot of financial hardship. Can you please confirm when I’ll be getting my paycheck?’

Save the response to that to help you in your unemployment claim if your employer tries to fight it.”

 

You need a thick skin if you’re going to post a question.

 Even when commenters are giving valuable advice, it can sometimes come off far more harshly then you’d ever receive in a face-to-face conversation. If you’re going to pose a question on Reddit, be prepared for some blunt and brash feedback, even when it’s helpful.

Take this gem for example. In response to Should I take the higher paying ‘real’ job?, the feedback is helpful, but the writer doesn’t suffer fools lightly (language has been edited):

“I don’t understand this post. Pardon my language, but why the f*** wouldn’t you take a job that doubles your pay? 1) You don’t have enough money to contribute to your relationship (which will destroy the relationship eventually) 2) Have a kid that will need to go to college someday 3) You admit you’re being exploited and not being paid enough 4) The only drawback is that your boss will have a bad couple of weeks until he finds someone new (which is the most insignificant draw back I’ve ever heard of in my life)

I’m sorry for being blunt, but not taking the job would be the stupidest thing I’ve ever read on this sub-reddit, and I’ve read things as stupid as people buying $100k cars on debt with $30k salaries…”

 There’s often a dash (or gallon) of sexism to contend with as a poster or reader on Reddit. It’s as simple as many commenters often assuming the OP is a man or making stereotypical gendered comments about an OP’s girlfriend or wife probably just “buying shoes”, “shopping too much”, “spending all his money”.  It’s not uncommon to see Original Posters later edit a question to say, “I’m a woman” or something similar.

When your question isn’t really getting answered…

 Sometimes an OP poses a thought-provoking question that devolves into a cultural or gendered debate.

For example, this post How much should I save for my parent’s retirement?, posted by 21-year-old woman whose immigrant parents worked hard to provide the American dream for both her and her brother. The parents paid for her college tuition in full, paid off their half million-dollar home and currently carry no debt. However, they have very little saved for retirement and plan to help the OP’s younger brother, currently in middle school, get through college. The OP asked the Reddit community this:

“We are East Asian, so I do feel an obligation to support them in old age, and want to start planning for it now. What resources can I use to have a conversation to encourage them to save more for retirement? Am I able to open retirement accounts for them? Since retirement is still 15-20 years away for them, would I be better off allocating an allowance for them at that point?”

This post garnered 351 comments in a week. Some advice proved actually helpful. Several people recommended and debated the merits of opening a 529 for the younger brother, others pushed for the parents to contribute to a Roth IRA. One poster encouraged the OP to be sure she saved for her own retirement in traditional retirement vehicles (401(k) or IRA) and put money for her parents in a non-retirement account. Others pointed out the value of the house may turn into a retirement nest egg as her parents might want to downsize eventually and the sale of the house would hopefully net them at least $500,000 in the future.

Interestingly though, the conversation eventually devolved into a clash of Eastern and Western cultures. Some posters were encouraging her to look out for number one first and focus on her family later.

The OP eventually called out this rhetoric in an edit to her post: 

EDIT: A lot of people are telling me that this is not my responsibility or obligation. Culturally, it is. They may not need it, but culturally, it is my responsibility to be able to provide for my parents once they retire. I am asking how I can best prepare for this. Telling me that I don’t need to do anything, doesn’t help.

If you ask a question that turns into more of a philosophical debate, then don’t hesitate to call people out and ask for actual advice.

 

There is a lot of value, but proceed with caution.

There are a lot of sites out there offering financial advice. Many of the sites offering product recommendations operate based on affiliate marketing income and therefore have an incentive to provide you with the answer that suits you and offers the biggest commission rather than what’s truly best for you. (That’s suitability instead of fiduciary). Others, like popular financial blogs, are great for the basics but may not be helpful in providing input on your unique financial situation.

Crowdsourcing for help on Reddit can provide a lot of quality advice, but the path to help is also riddled with both judgmental trolls and some truly awful tips. Fortunately, sage commenters will down vote and correct the bad advice quickly, but before you act on any hot tips from an online forum, just be sure to do some deeper research. Plus, it’s helpful that it’s general against the rules of a thread to advertise products. Don’t forget to verify that the advice given aligns with your financial goals and risk tolerance.

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