Financial Media, Press Releases, Hype, and Your Money

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When I first started writing The Simple Dollar, I was a big proponent of financial publications like Money Magazine, Kiplinger’s, SmartMoney, and so on. I read them. I referenced them in posts. I even suggested that people subscribe to them.

For a long time, though, I’ve scarcely mentioned them. What happened?

First of all, the articles on basic personal finance in those publications are solid. They do provide good advice on budgeting, frugality, and other such topics, though many of those articles are matched by good blog posts out there.

Where these publications run into trouble with me is when they start talking about specific investments.

Let me explain what I mean.

As The Simple Dollar has become more popular, I’ve been the recipient of more and more PR releases related to the finance industry. Every day, my inbox is filled with people wanting to tell me about their financial product that will solve everyone’s problems, their mutual fund that’s on a “stunning” run of success, and so on. They’re press releases, filled with the best possible picture of a particular item. I understand that.

What’s disturbing is that I sometimes see the same exact talking points in other publications. I can take the key words out of some of these press releases, Google for them, and find many sites that have the information from that press release posted as a story. Sometimes, it’s reworded a bit. At other times, it’s just a verbatim copy of the press release.

This isn’t just online, either. More than once, I’ve seen major publications do this exact thing. I’ll see a press release and then, a few months later, I’ll see that mutual fund or that financial product promoted in the text of a major publication.

Am I accusing these publications of being unethical? No, not really. I’m accusing them of being overworked, like many publications are. When you have a bunch of pages to fill and a limited amount of time to do so, it’s very easy to just re-fit some content from a press release into the body of a story. “I need a few paragraphs about a mutual fund and I have thirty minutes to do it. Let’s see what’s in the PR file…”

What have I learned from this?

I tend to trust the media less and less. Every time I see a positive article in the press, I now wonder how much of it was taken straight from a press release paid for by the person the article was written about.

I tend to trust individual people much more now than I trust publications. If a specific writer has a good track record, I’ll follow that writer to whatever medium they use. If a writer is just mailing it in with reshaped press releases, I just avoid that writer. The publication itself, whether it’s a personal blog or a major publication, just doesn’t matter to me that much, at least not compared to the value I place on the specific writer.

I do my own research whenever possible. Sure, someone might list a bunch of great index funds to invest in. I still won’t put a dime in them until I do my own research on those funds with real numbers. The same goes with things as mundane as frugality tips. Does this really work? I’ll try to run the numbers first before diving into any tip.

In the end, it is always best to find out information for yourself as best you can. The ability to research and track down information is a valuable one, and the better you are at it, the better your chances of making great choices for yourself and your family.

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11 thoughts on “Financial Media, Press Releases, Hype, and Your Money

  1. I subscribe to a few personal finance magazines, take a few people’s advice to heart as they have proved to me that their advice is worthy and I also give advice when I can (or asked too), but you are right…seek the information yourself. I like the publications, other people and publications, but take those offerings, do some of your own research, and make an informed decision that best fits your and your family. Perhaps you will come up with something even better than ‘an expert’. Great post! Tyson

  2. I read an article a few years ago about this topic. IIRC (it’s been a while) it was from the other direction: how to get your press release turned into an article. Since then I have taken every article with a grain of salt (even bigger than previously.)

    Luckily, it’s pretty easy to recognize a press-release-turned-article once you know to be on the lookout for them.

  3. I remember in Barbara Corcoran’s autobiography she mentions how when her real estate group was just starting she pulled out her listings, did some basic math, and sent out a press release on her letter head with *official* real estate statistics according to ‘The Corcoran Group’. No one vetted her or her numbers. They just started quoting her and giving her free advertising. Between that and college statistics I have been not only wary of reporting but reported numbers as well.

  4. I also believe that for the past 6 years or so, most major news stories (told by the networks, papers, and even the AP) were verbatim, or close to, White House press releases. It started after 911, for obvious security reasons, but remained. Occasionally you will find some odd factual error is occurring across the board. The fourth estate is on life support- I always check the international press sites in addition to American press for a more balanced view formation.

  5. I agree with you, unfortunately you’ll continue to get bombarded with requests for “reviews” and press releases. You can be about 99% sure if a company is really pushing something through guerrilla tactics, its best to keep your hands clean of it.

  6. I read somewhere once that the average lay person shouldn’t take seriously any ‘hot tips’ on financial matters, because by the time said hot tip reaches the masses, it’s no longer ‘hot.’

    And knowing how many errors or misrepresentations I see in information on topics I’m knowledgeable about, I’ve become much less accepting of any facts people start throwing around on topics I’m less familiar with (or that they seem to be marginally informed about).

  7. “In the end, it is always best to find out information for yourself as best you can.”

    Yes, absolutely. I am chronically worried/alarmed/amazed by how little people ask questions or investigate whether the information they’re absorbing is actually true. On money or any other subject, ask lots of questions!

    The media is under tremendous pressure that affects their ability to do their job well. That is yet another reason why people should always ask lots of questions.

  8. Valleycat- No kidding! My hubby, a history prof, can’t watch the History channel anymore because he gets so frustrated with the factual errors and omissions designed to stress the more sensational interpretation. He spends a lot of his time wearing white gloves examining primary resources, and has no patience for sloppy or sensationalist work that is supposed to be non-fiction.

    I can even tell you about my BIL, who worked for National Geographic, and in their “documentaries” spliced crowd scenes from one village into the footage of ceremonies from completely different villages, to make the crowds look larger. That really opened my eyes. He ended up a SR VP at Olgivy and Mather, where at least intent was obvious.

    Do not blindy believe even the most trusted of institutions.

  9. I see the same thing in newspapers with new products. It’s frustrating to see such blatant commercials posing as articles.

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