Many Americans turn to financial gurus for personal finance advice. Twenty-four-hour news stations, online media, and a wealth of financial books have made it easy to tune into your financial wizard of choice. And while there’s a lot of good advice being shared by financial gurus, even the best are bound to slip up at some point. Here, we’ll take a look at financial gurus, some good and some bad, that have at one point given terrible advice to their fans and clients.
- Robert Kiyosaki: Famous for his Rich Dad Poor Dad motivational books, he’s taught many financial strategies and investment principles to everyday people. He’s been wildly successful, selling over 26 million copies of his 15 books. But Kiyosaki has not been without controversy. Many have criticized him for focusing too much on anecdotes and not offering concrete advice. In a 2006 20/20 segment, Kiyosaki advised three entrepreneurs, who criticized him for not offering enough guidance. His book, Rich Dad Poor Dad offers advice that breaks the law, such as insider trading, tax fraud, and using a cat as a "partner."
- Dave Ramsey: Dave Ramsey offers financial advice to the masses, helping people get control of their lives and money. He’s written many books including The Total Money Makeover and Financial Peace Revisited. Ramsey also hosted a popular syndicated radio program, The Dave Ramsey Show. Although Dave often has excellent advice, he doesn’t get everything right. He’s been criticized for bad advice, including buying a house at the wrong time, or mutual fund investing that may not work for everyone.
- Troy Titus: This financial guru was featured on an episode of American Greed for his misgivings. He was once a guru on the seminar circuit, pitching to make attendees rich. People bought his DVDs and invested with him, hoping to make it rich. But in reality, Troy Titus turned out to be the mastermind behind a multi-million dollar Ponzi scheme.
- Jim Cramer: Jim Cramer is a very visible stock market guru, with his own show, Mad Money, on CNBC. But he gave terrible advice in the stock market meltdown. He recommended that Americans invest their retirement funds in failing firms like Bear Stearns and AIG. When questioned about this bad advice, Cramer claimed he was lied to by the CEOs.
- Lou Dobbs: CNN analyst Lou Dobbs didn’t dance around his predictions for the economy, and unfortunately for him and those who invested on his advice, he predicted wrong. In August 2001, he made it clear that he’s a bull on the market and economy, offering a bullish investment strategy, but the market stayed bad for a year afterward.
- Ben Stein: Ben Stein wrote a book that poked fun at bad financial advice, explaining how you can ruin your financial life with just a few poorly made decisions. Despite his good advice and dry humor, Ben Stein delivered bad advice in August 2007, declaring that stocks were a "lovely place to be."
- Donald Trump: Donald Trump has been wildly successful, and he wrote a book with Robert Kiyosaki to help others achieve excellent success as well. However, the two gurus gave bad advice to the masses, encouraging average Joes to dump their savings and stop buying mutual funds. Instead, they encourage entrepreneurship, a venture that can provide great success, but for 90% of startup businesses, ends in failure.
- Bernie Madoff: Bernard "Bernie" Madoff, was formerly a non-executive chairman of NASDAQ, a stock broker, and investment advisor. His betrayal of bad advice and investment fraud is famous as the largest Ponzi scheme in history. He was sentenced to 150 years in prison for his fraud, with estimated losses to investors of $18 billion.
- Lenny Dykstra: Former baseball star Lenny Dykstra shared his investing expertise on TV and online, discussing stock picks and spending. But his financial advice turned out to be poor, as he went bankrupt from his foreclosure of a home purchased at the height of the housing bubble. Author Randall Lane notes that Dykstra serves as a metaphor for the bad financial moves people made, on a huge scale, with debts of $37.1 million.