Social Networking For Personal Finance
A Tool For Online Communities To Share Financial Advice
It used to be taboo to talk about money at social gatherings, but in an age where people boast about their relationships and post embarrassing photos on online, it was only a matter of time before social-networking websites began cropping up to offer financial advice. People are looking to online communities for motivation, intelligence, to see where they are compared to their peers and a lot of traditional finance has missed the boat in terms of the community aspect. Social-investment sites take the sheen off “expert,” allowing people to compare their investments or trade advice and opinions. Social-lending companies let people appeal to other people, rather than their banks, when they need a loan.
“I know a lot about the mistakes people make at a young age, and I think it’s a great concept,” said Cary Carbonaro, president of a traditional financial planning firm. “If I’m in debt, I can go talk to other people in debt or ask someone who is my peer and not embarrass myself.”
Of course, there are obvious questions, ranging from privacy and security risks to the dubious benefits of leveraging the financial “expertise” of the masses. Start-ups need to gain the trust of users, assuring them that the software is hacker-proof and that their detailed financial information won’t end up in the hands of marketers. Nevertheless, internet entrepreneurs are betting that financial advice from a disinterested crowd with various levels of expertise may be as good or better than professionals who work on commission or work for a particular bank. For the true exhibitionist, a new network of personal finance bloggers has sprouted up, keeping profiles on NetWorthIQ, which offers people a public forum in which to chronicle the ups and downs of their assets.
