Friday, September 19, 2008

Giving out some bad advice

People are always pushing advice on how to handle the current credit crisis. The tricky part is figuring out what is really in the consumers best interest. There are always people looking to make money of the backs of others - in good times and in bad. So our advice is to take all economic advice with caution. Do your homework on who is giving the advice and in whose best interest the advice really is.

This is evident in an article titled Stay calm in face of the crises from the Washington Post and posted on Recordnet. Lets take a look -

Given the current turmoil, this is a prime time for scams, bogus business opportunities and questionable advice.

I would be cautious about following the final two tips from the CMPS Institute.

The organization advises people to max out their home equity line of credit before lenders cut them off. Nicholas advised that consumers borrow the money and put it in an FDIC-insured account.

A loan isn't a good safety net. Instead of borrowing and paying interest on money you don't need, save more while you have the resources.

Why recommend people take out a mortgage if they don't need it?

The answer becomes clear when you consider that CMPS is also a membership group for mortgage professionals who have a financial interest in getting you to take out a mortgage.

Hear! Hear! And this final paragraph says it better than we could say ourselves -

In this economy, you'll hear a lot of advice about what you should do to preserve or produce money. Just consider the source and motives of the people handing out this wisdom before you make any financial move.

When you find yourself in a hole - don't keep digging! The CMPS advice is just dig faster and faster.

No comments: