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All Personal Finance Experts Are Liars

There’s a little secret in personal finance that no “guru” will tell you.

Almost all personal finance experts talk about how you need to spend less and save more to get rich. That budgeting is a clear path to success.

You are spending too much, they tell you. If only you stop spending so much and getting into debt, all of your problems will be solved.

The likes of David Bach, Dave Ramsey, Suze Orman, Tony Robbins, and even Ramit Sethi say similar things. The content might be different, but the messaging is the same.

David Bach talks about the “latte factor”: You aren’t rich because you are just spending too much on your coffee from Starbucks. Investing that $2.50 you spend every day on a latte in the stock market instead can lead to a life of riches. How’s that for putting a damper on one of the little joys in life?

Dave Ramsey down-talks to his callers as if they were petulant children and tells you to cut up your credit cards. Dave says they are the work of the devil and you aren’t mature enough to use them. Except we used our cards to make $3,624 in spendable cash last year, all while paying zero in interest — because we paid the cards off in full each month.

Suze Orman, on the other hand, used to have viewers call into her CNBC talk show to ask if they could buy something they wanted. I kid you not. “Can I Afford It?” was a very popular segment on her show. Suze effectively became the callers’ mother. If you have to ask some TV personality for permission to buy something, maybe you need to examine other problems in your life.

Tony Robbins, in his book MONEY: Master the Game, talks about using asset allocation, minimizing expenses, and making passive investments. Yes, these are all good things. But is this how Tony has amassed a net worth of over $600 million?

Then there’s Ramit Sethi, who targets Millennials in his book I’ll Teach You to Be Rich. The book’s title makes it sounds like he’s got some secret sauce, but in fact, he does not. It’s just a retread of more of the same, but with really off-putting bad jokes. His book should really be titled How to Be Less Poor.

The personal finance experts all say that in order to get rich you need to:

  • Create a budget
  • Open a retirement account (401(k), IRA, etc.)
  • Have 6 months in emergency savings
  • Invest in index funds
  • Buy a house (since it’s your best investment)
  • Save 10% of your income
  • Eliminate all debt
  • Minimize your expenses
  • Spend less than you earn and invest the difference

I’ve pretty much summarized every personal finance book ever written. I’ve saved you hours of reading and paying for the books.

You’ll do slightly better than average if you follow this advice, but in personal finance, average really sucks. The average person:

  • Has a salary of $49k a year
  • Doesn’t have enough in emergency savings — 19% of Americans have $0 and 31% have less than $500 saved
  • Spends 56% on their food budget
  • Has over $5,700 in credit card debt with a 17.89% interest rate
  • Has only $150k in savings by retirement
  • Relies on Social Security to fund most of their retirement

Even if you were to improve these stats by 30%, does that sound like you would be rich?

To put it simply, it’s all bullshit.

It’s like trying to gain muscle by dieting. It’s never going to happen.

How do I know this? Ask yourself this one question: How do you think these personal finance experts got wealthy? Did they follow their own advice?


All of the personal finance experts got wealthy from the businesses they owned. What they discuss in their books, while not necessarily false or bad advice, is not the path they followed. The path they suggest is the road to mediocrity.

In reality, they used these techniques to get rich:

  • Generate income not based on hours worked
  • Minimize taxes
  • Leverage time and debt

Yet so-called “gurus” give completely different advice to their audience.

In the movie The Usual Suspects, the main character, Verbal Kint, has a great line: “The greatest trick the Devil ever pulled was convincing the world he didn’t exist.”

What the experts present in their material is a sleight of hand.

Misdirection plays a huge part in magic. Your left hand is doing one thing to distract the audience, while your right hand is actually hiding the playing card.

This is effectively what personal finance experts are doing, whether they realize it or not.

Most of the financial experts were not wealthy before creating their businesses, either. In fact, if you look at most personal finance experts, they became wealthy because of their personal finance advice businesses! It wasn’t because of the advice they espouse and suggest you follow.

In the book The Millionaire Fastlane M.J. DeMarco discusses this very topic of fake gurus. As DeMarco states, the techniques they recommend aren’t for wealth building, but for maintaining your wealth — a key difference.

To be clear, I do agree that a lot of the tips and techniques they recommend will make you better off than the average American. But the average American gets paid for hours worked and is a tax slave.

This is why, when seeing reports that Donald Trump paid little in taxes, the average American is outraged. The average person does not understand basic business concepts, taxes, and finance. They don’t understand as a business owner you have much more control over your income and the taxes you pay. Business owners have the capability to delay taxes (in some cases indefinitely).

However, a wage earner is pretty much screwed. Your options to reduce your taxes are pretty much limited to an employee-sponsored retirement plan and having children. Therefore, as an employee, you effectively pay more taxes.

It’s not how much you make, but how much you keep.

An employee gets paid for the hours worked, so by its very nature your income is not scaleable and your wealth creation ability is limited.

Yet you almost never hear the financial experts recommending that you start a business.

Nor do they mention the importance of understanding how taxes work.

Why do you think this is?

The average person wants the easy way out. They want the miracle pill that will make them thin and buff. They want something that requires little effort.

But in reality, there is no such thing.

I once had a neighbor tell me they wanted to start a business that was easy. I almost spit out my drink when I heard that and tried to contain my chuckle.

I thought to myself, “He’ll never start a business then.” Creating a business takes lots of effort with no clear path to success.

So the gurus dole out what the audience expects. Something that can be digested in little bite-sized chunks, easy to follow, and not much effort.

That is if the audience even follows it at all. Only 10% of consumers complete a book or course they’ve purchased. I suspect fewer even implement what they’ve just read. So most can’t even follow the basic advice the experts recommend. It is similar to the stationary bicycle that eventually turns into a clothes hanger.

I saw this exact same phenomenon among the readers of my blog Investor Junkie. I’ve always looked at investing as more holistic, which includes owning a business. I did a formal survey with my audience on the topics they wanted to see on my blog. They wanted easy solutions: ways to save more, pay off debt, and minimize expenses. Almost no one wanted information on how to create a business.

So I removed most of the entrepreneurial content.

What do I recommend you do?

I know this is going to sound like blasphemy but ignore mainstream personal finance advice.

Follow what the personal finance experts do, not what they say — start a business.

Create at least a side hustle. You’ll learn much more about finance, taxes, entrepreneurship, and marketing than in any classroom or what the media thinks it knows about owning a business.

I’m not suggesting the advice the gurus are giving is outright wrong. Their recommendations will make you modestly successful. You’ll more than likely live an OK life and have an above-average net worth.

But you won’t be rich.

You’ll NEVER get rich by working for someone else. That’s something you’ll never hear from any personal finance expert. But being a business owner is how they got rich themselves.

This makes all personal finance experts liars.

Larry Ludwig

About Larry Ludwig

Larry Ludwig is an entrepreneur, financial expert, tech & marketing guru with over 25 years of industry experience.

In July 2018, Larry successfully sold Investor Junkie for $6 million.