The Battle Of The Personal Finance Gurus

Who Are The Personal Finance Gurus?

The world is full of people who are offering (or selling) advice. In the area of personal finance, there are numerous ‘experts’ or ‘finance gurus’ appearing on our television screens, tweeting on Twitter (x) and filling bookshelves with their own advice on how to improve your finances and grow your wealth. 

From Dave Ramsey to Grant Cardone and Kevin O’Leary, there are plenty of people happy to tell us what to do with our hard-earned money. But are they all just repeating the same things or do their views differ greatly? In this article, I will break down the main ideas of each and analyse why their views are mostly the same but also at times passionately opposed.

Robert Kiyosaki

“Rich Dad Poor Dad” was the first personal finance book that I ever read. Hence Robert Kiyosaki was the first finance guru that I was exposed to.

‘Rich Dad Poor Dad’ emphasizes the importance of financial education and advocates for investing in assets, especially real estate. One key concept for me was the definition of assets as only those things that earn income (cash flow) and the emphasis on buying assets and not liabilities. 

The explanation of the cash flow quadrant was another great lesson from Robert Kiyosaki. It identifies most people as either employees or self-employed. But suggests that we should be either business owners or even better, investors.

He has created an empire based on his Rich Dad Poor Dad fame. But over the years some of Kiyosaki’s financial predictions and slightly radical ideas have been questionable, to say the least. 

He made various predictions about economic downturns and market crashes. While some of his predictions have been accurate, others have not materialized, leading to scepticism and controversy.

It’s essential to approach Kiyosaki’s financial advice critically and consider various perspectives before making financial decisions, as opinions on his teachings vary within the financial community.

Ramit Sethi

Ramit Sethi focuses on automating finances and encourages the idea of spending extravagantly on the things that matter while cutting costs on things that don’t.

He is also known for his practical approach to personal finance and investment. His book “I Will Teach You To Be Rich”  presents a six-week program designed to streamline financial processes, automate savings, and strategically invest for the future. These strategies are also discussed in his popular Netflix series “How To Get Rich” 

He emphasizes the importance of conscious spending, encouraging readers to indulge in what truly brings them joy while cutting costs on less meaningful expenses. Sethi covers topics ranging from credit cards and banking to investing and entrepreneurship, providing actionable steps for readers to build wealth. His most controversial views revolve around his claims that renting a home may for many people be better than buying.

Dave Ramsey

Dave Ramsey has written several books and hosts a popular television program. He is known for his ‘baby steps’ approach to reducing debt and reallocating spending towards a long-term plan to reach financial freedom. He advocates for the “Debt Snowball” method, where individuals pay off their smallest debts first to build momentum.

Ramsey also stresses the importance of living debt-free and having an emergency fund. There is nothing controversial about these things.

However, quite recently he did cause a stir with his views on how much retirees should withdraw from their retirement fund. His comments that it’s not hard to beat the S&P 500 and that it is safe to withdraw 8% of a retirement fund per year sent Twitter into a feeding frenzy. 

An initiative that I applaud Ramsey for is his extensive study into millionaires in the US. His company Ramsey Solutions interviewed 10,000 American millionaires to find their secrets to building wealth. Titled the National Study Of Millionaires and published in April 2023, this study gives some excellent insights into the habits of millionaires.

David Bach

David Bach, a renowned personal finance author, has contributed significantly to the realm of financial literacy with his insightful books. One of his notable works, “The Automatic Millionaire,” introduces the concept of making financial success automatic through disciplined saving and investing. “The Latte Factor” follows a similar theme and brought to the fore the commonly mocked idea of getting rich by giving up the daily coffee in order to save and invest. 

Bach emphasizes the importance of paying oneself first, automating savings, and harnessing the power of compound interest.

In “Smart Women Finish Rich,” he tailors his advice to address the unique financial challenges faced by women. This book provides practical steps for achieving financial security and independence. Additionally, “Start Late, Finish Rich” offers guidance for those who may have started their financial journey later in life, offering strategies to catch up and secure a comfortable retirement.

Bach’s ideas often center around simplicity and automation, making them accessible to a wide audience. While some critics argue that his advice may be too basic for those seeking more advanced financial strategies, his approach resonates with many individuals looking for practical and actionable steps to improve their financial well-being.

Overall, David Bach’s personal finance ideas, as presented in his books, serve as valuable resources for individuals seeking to build wealth, achieve financial goals, and secure a prosperous future.

Warren Buffett

Warren Buffett is the now legendary investor known for his value investing approach. He advocates for long-term investing, holding onto quality stocks, and understanding the businesses in which one invests.

Famous for numerous quotes about investing, Buffett started young but has earned 99% of his enormous wealth since turning 50 due to the power of compound interest.

Warren Buffett’s investment approach is often distilled into the concept of value investing. His timeless advice includes focusing on the intrinsic value of a company, investing for the long term, and avoiding speculation. While he hasn’t authored personal finance books per se, his annual letters to Berkshire Hathaway shareholders and numerous interviews offer valuable insights into his financial mindset.

Key principles from Buffett include the importance of understanding the businesses you invest in, the significance of economic moats (sustainable competitive advantages), and the idea of buying stocks with the intention of holding them indefinitely. He advocates for a patient and rational approach to investing, steering clear of emotional decision-making.

Warren Buffett’s influence extends beyond his own writings, as many authors and financial experts have quoted and analyzed his principles in their own works. Overall, Warren Buffett’s investment ideas continue to shape the field of finance, emphasizing the significance of fundamental analysis and a long-term perspective.

Suze Orman

Suze Orman, a prominent personal finance expert, has made significant contributions to empowering individuals with financial knowledge. Her practical advice is often reflected in her books, such as “The 9 Steps to Financial Freedom” and “The Money Book for the Young, Fabulous & Broke.”

Orman’s approach revolves around the belief that financial well-being is achievable through a combination of informed decision-making and disciplined money management. In “The 9 Steps to Financial Freedom,” she outlines a comprehensive plan covering areas like budgeting, debt management, and investment strategies. Her emphasis on building an emergency fund, managing credit wisely, and understanding the psychology of money resonates with a wide audience.

In “The Money Book for the Young, Fabulous & Broke,” Orman specifically addresses the financial challenges faced by young adults. She provides actionable advice on handling student loans, credit card debt, and setting achievable financial goals. Her accessible writing style and relatable examples make complex financial concepts more understandable for her readers.

Critics argue that Orman’s advice can be conservative and may not suit everyone’s financial situation. However, her overarching message of taking control of one’s financial destiny, understanding the impact of decisions, and planning for the future remains valuable.

In summary, Suze Orman’s personal finance ideas, as presented in her books, offer practical guidance for individuals at various stages of their financial journey, making her a respected figure in the field of personal finance.

Neale Godfrey

Neale Godfrey, a notable figure in the realm of personal finance, has made substantial contributions with her focus on financial education, particularly aimed at empowering women and children. Her book “Money Doesn’t Grow on Trees: A Parent’s Guide to Raising Financially Responsible Children” stands out as a valuable resource for parents seeking to instill good financial habits in their children from an early age.

Godfrey emphasizes the importance of teaching financial literacy as a fundamental life skill, covering topics such as budgeting, saving, and the value of work. Her practical approach resonates with many parents looking to raise financially responsible and independent individuals.

In addition to her work on financial education for children, Godfrey addresses broader personal finance topics. Her insights often touch upon issues such as debt management, saving for retirement, and the significance of financial independence. By demystifying financial concepts and providing actionable advice, she helps individuals navigate the complexities of personal finance with confidence.

While some critics argue that her advice may be more geared towards a specific demographic, such as parents and families, there’s no denying the positive impact of Neale Godfrey’s emphasis on financial education. Her commitment to empowering individuals with the knowledge and skills to make informed financial decisions is commendable, making her contributions valuable in the pursuit of financial well-being.

Grant Cardone

Grant Cardone, a dynamic entrepreneur and real estate investor, is known for his bold and assertive approach to personal finance. One of his prominent works, “The 10X Rule,” encourages individuals to set ambitious goals and take massive action to achieve them. Cardone emphasizes the importance of going beyond traditional levels of effort, pushing for ten times the action and commitment to realize extraordinary success.

In “Sell or Be Sold,” Cardone delves into the principles of salesmanship, arguing that everyone is in sales in some form or another. He underscores the significance of effective communication, persuasion, and closing deals, asserting that mastering the art of selling is crucial for financial success.

Cardone’s ideas often revolve around the concept of creating multiple income streams, with a particular focus on real estate investments. His book “The Millionaire Booklet” provides concise advice on building wealth through a combination of income generation, saving, and strategic investments.

Critics argue that Cardone’s approach may be too aggressive for everyone and that the “10X Rule” might not be universally applicable. However, his unapologetic stance on the need for determination, resilience, and continuous effort resonates with those seeking a motivational push in their financial journey.

In summary, Grant Cardone’s personal finance ideas encourage a proactive and ambitious mindset, urging individuals to embrace challenges, maximize their efforts, and explore diverse avenues for financial growth.

Kevin O’Leary

Kevin O’Leary, known for his role on “Shark Tank” and as an entrepreneur, has shared his personal finance ideas through various platforms. In his book “Cold Hard Truth on Men, Women, and Money,” O’Leary provides straightforward advice on managing finances, emphasizing the importance of financial discipline, strategic investment, and making informed decisions.

O’Leary’s philosophy often revolves around the idea of financial literacy and taking control of one’s financial destiny. He stresses the significance of understanding the basics of money management, investing wisely, and being conscious of the impact of financial decisions on one’s life. His no-nonsense approach resonates with those seeking practical advice without unnecessary complexity.

One notable aspect of O’Leary’s advice is his emphasis on entrepreneurship. As a successful entrepreneur himself, he encourages individuals to explore business opportunities, take calculated risks, and build wealth through entrepreneurship.

Critics argue that O’Leary’s direct and sometimes blunt style may not suit everyone, but his emphasis on financial education and taking responsibility for one’s financial future has its merits. Overall, Kevin O’Leary’s personal finance ideas, as presented in his book and various media appearances, offer a pragmatic and actionable approach for individuals looking to navigate the complexities of personal finance.

Erin Lowry

Erin Lowry, known for her practical and approachable style, has made a notable contribution to personal finance literature, particularly with her book “Broke Millennial: Stop Scraping By and Get Your Financial Life Together.” Lowry addresses the financial challenges faced by millennials with a blend of humour and sound advice.

In “Broke Millennial,” she tackles topics such as budgeting, saving, and investing in a way that resonates with the younger generation. Lowry understands the financial hurdles unique to millennials and provides actionable steps to overcome them. Her emphasis on open communication about money, both in personal relationships and within families, adds a refreshing and human touch to financial discussions.

Moreover, Erin Lowry’s subsequent book, “Broke Millennial Takes On Investing,” delves deeper into the world of investing, breaking down complex concepts into digestible information. This book serves as a valuable resource for those looking to navigate the often intimidating terrain of investment with confidence.

Lowry’s personal finance ideas are grounded in the reality of today’s economic landscape, making her work relatable to a wide audience. While some may find her advice more entry-level, her accessible writing style and practical tips make her an effective guide for individuals looking to take control of their financial lives.

In summary, Erin Lowry’s personal finance ideas, as presented in her books, provide a solid foundation for financial literacy, especially tailored to the needs and challenges faced by the millennial generation.

 JL Collins

JL Collins, in his influential book “The Simple Path to Wealth,” presents a straightforward and no-nonsense approach to personal finance and investing. His philosophy revolves around simplicity, frugality, and long-term wealth-building strategies.

One of the key principles Collins advocates is the importance of investing in low-cost, broad-market index funds, specifically recommending Vanguard’s VTSAX. By promoting a simple investment strategy, he encourages readers to avoid the complexities of picking individual stocks and instead focus on the power of market-wide growth over time.

Collins also places significant emphasis on achieving financial independence and retiring early (FIRE) by saving a substantial portion of one’s income and investing it wisely. The concept of achieving financial freedom through a carefully crafted investment portfolio is a central theme in his work.

Furthermore, he addresses the psychological aspects of investing, advising readers to stay the course during market fluctuations and not be swayed by short-term volatility. Collins’s “stock series” in his blog and book provides valuable insights for those seeking a comprehensive understanding of stock market investing.

While some critics argue that his approach might be overly simplistic for certain investors with more complex financial situations, JL Collins’s ideas offer a clear roadmap for those looking to achieve financial independence through disciplined saving and sensible investment choices.

Conclusion

These notable personal finance advisors share a common thread emphasizing simplicity, discipline, and a long-term perspective. While Ramsey advocates for debt-free living and an emergency fund, Sethi focuses on conscious spending and strategic investments. Kiyosaki underscores the importance of financial education and asset-building, while Orman emphasizes practical money management and empowering financial decisions. Collins contributes with a straightforward approach to investing.

 Despite their diverse backgrounds and methodologies, they often converge on the fundamental principles of budgeting, investing wisely, and cultivating a mindset of financial independence. The synthesis of their collective wisdom offers a comprehensive guide for individuals navigating the intricate landscape of personal finance, providing actionable insights for those striving to build lasting wealth and financial security.