Going too far with FIRE: The downside of being in the financial advice business – RDQ

I always thought the glowing stories of FIRE folks were a bit dodgy. Much of the time they aren’t even retired in the traditional sense. Sometimes they go too far sharing their acquired wisdom for cash.

I followed one blogger for several years. She shared her frugal ways, extreme in my view like buying her two-year olds shoes in a second hand thrift shop. She wrote a book, gained a lot of publicity, was featured in news articles and gave advice. 

She answered questions on her blog, invited readers to send in case studies which she analyzed and then provided advice. In the past, when I attempted to post a comment questioning her advice, they never appeared. 

Then based on her experience, she began providing advice for a fee, she was now a financial consultant. She changed the blog to accommodate her new service. 

A year ago I noticed there were no updates on the blog, posts are now a year old. She still advertised for clients, but it was otherwise silent. Recently I clicked on the “hire me” button and it said she was not accepting new clients at this time. 

What happened to the famous Mrs. Frugalwoods who had gained widespread publicity for her financial acumen writing extensively about how to save money and live a good life retired in your 30s? She just seemed to disappear. 

I finally found the answer. She ran afoul of Vermonts security laws. Specifically she was charged in a consent order.

 “WHEREAS, as a result of the Department’s review, the Department has concluded that Respondent violated the Securities Act by providing investment advice for compensation in Vermont without registering as an investment adviser or investment adviser representative and without qualifying for any exemption from registration.” She agreed to a fine of $7,800. The order states no-one was harmed.

It was providing her financial advice for (pretty hefty) compensation that did her in.

My cynical mindset asks, if her household (husband and two young children) FIRE worked so well, why did she need to sell her services? 

Here is the dream she is promoting on her blog. 

“By taking control of our money, my husband and I were able to pursue our dream of moving to a homestead in rural Vermont. He retired early, and I left my unfulfilling job to focus on helping people like you. Let me show you how to make your money create the life you want.”

A lot of us do our best to take control of our money, but don’t drop out in our 30s and then present a lifetime of knowledge and experience to others. 

At least when I pontificate it is based on 80 plus years of dealing with the vicissitudes of life – mine and others.