Post Bad Financial Advice You've Heard

[james.hendrickson]

Heard any bad financial advice? Post it here so other people don't get caught up with it:

I'll start:

1. Buying expensive consumer goods ($200 vacuum flasks , $500 boots).

2. Buying into MLMs (Shakeology, LuLaRoe, Mary Kay, Amway, etc.)

3. Playing online poker

4. Buying dirt of the month clubs

5. Paying extra for "raw water"

[Smallsteps]

It may not be exactly specific advice but instead just a list of items that I have seen lead people down a bad path.

#1 is falling for advice from people simply based on the perception that they are wealthy or doing well. Appearances can be deceiving

#2 expecting the same results over and over again or expecting instant results
Both these items have bit some friends and co-workers right in the rear financially.

[msomnipotent]

"Retirement accounts are for rich people"--said everyone in my family when they heard I signed up for a 403b.

[LivingAlmostLarge]

I'll start saving later when I get paid more.

You can afford the monthly payment.

What do you want to pay monthly?

No one saves for retirement.

[Singuy]

Biggest bad financial advices I've encountered are from a lack of understand of our tax laws.

1. You should never work overtime, you'll end up paying it all to uncle Sam. If you make 1 dollar that puts you in the higher bracket, it'll be like you're going backwards. I also shouldn't take the job that puts me in the new bracket either..cause then I'll be going backwards.

2. Yes you should buy a house, so you can save in taxes.

3. No you should never over pay your mortgage, mortgages are great for tax savings.

4. I need to give out more charitable donations so I can save more in taxes.

5. I should get married, so I can save more in taxes(used to be false, new tax plan changes this one dramatically).

6. I need to get a CPA to look at my taxes, I know they can get me more in returns than turbo tax. Yes I just have a W2.

7. I don't believe in 401k because I end up paying more taxes later when I take it out.

[Jluke]

Cut up your credit cards.

[Gailete]

Biggest bad financial advices I've encountered are from a lack of understand of our tax laws.

1. You should never work overtime, you'll end up paying it all to uncle Sam. If you make 1 dollar that puts you in the higher bracket, it'll be like you're going backwards. I also shouldn't take the job that puts me in the new bracket either..cause then I'll be going backwards.

2. Yes you should buy a house, so you can save in taxes.

3. No you should never over pay your mortgage, mortgages are great for tax savings.

4. I need to give out more charitable donations so I can save more in taxes.

5. I should get married, so I can save more in taxes(used to be false, new tax plan changes this one dramatically).

6. I need to get a CPA to look at my taxes, I know they can get me more in returns than turbo tax. Yes I just have a W2.

7. I don't believe in 401k because I end up paying more taxes later when I take it out.

If we heard someone spouting off all of that, we would whisper 'Idiot alert' and put them on ignore!

[scfr]

1. Pretty much any time a sales person talks about the tax savings that will result from a purchase (house, energy efficient vehicle, etc.), it's bad advice.

2. "Start a business so you can write a bunch of stuff off and save on your taxes."

3. I think a lot of "one size fits all" advice can be bad for an individual. And some "common knowledge" gets repeated so often that people assume it to apply to their situation when it may not. For example, I can't tell you how many times I've shaken my head at supposedly reputable publications that write that spouses are exempt from paying estate tax. But that is not always true.

4. But the worst piece of financial advice that I've received personally was about 30 years ago when an ex-boyfriend mocked my initial effort to put a small amount of savings away in a CD on payday. He told me it was so small it wouldn't matter --- He could not have been more wrong.

[Gailete]

1. Pretty much any time a sales person talks about the tax savings that will result from a purchase (house, energy efficient vehicle, etc.), it's bad advice.

I ignore those folks as they have nothing but their commission that they care about. We had a guy come to the house to talk to us about a water filtering service (we are on a well). One of things he was dissing was our hard water and trying to tell me that I wanted soft water. Afraid I argued with him and told him I hated soft water as I never felt like I ever got off all of the soap or me and out of the laundry. He didn't know what to say as he obviously never had someone disagree with him on that point. By the time he left, I don't think he knew if he was coming or going.

I would say anything that a salesperson is spouting is suspect. Someone once was demonstrating a vacuum and to prove how wonderful it was, took my hand made crewel work throw pillow off the couch and then stuck it in a plastic bag and sucked all the air out, thus distorting all those stitches I had so carefully made. That one taught me a lesson. Plus I was not impressed. I guess most salesmen that try to sell you things in your home, think women have an IQ of 80 and a checkbook with an unlimited account. I make sure before they leave that they know the truth of the matter. At this point I try not to have anyone in that is demonstrating things, but my hubby was interested in the water filtering technique so he was picking the guys brains for any info he could actually use.

[Gailete]

4. But the worst piece of financial advice that I've received personally was about 30 years ago when an ex-boyfriend mocked my initial effort to put a small amount of savings away in a CD on payday. He told me it was so small it wouldn't matter --- He could not have been more wrong.

Love it! You obviously aren't one of those IQ of 80 women!

[LivingAlmostLarge]

As long as you can afford it monthly you can afford it.

Buy the most house, car, student loans, because your income will grow and you can afford it.

Don't worry the next raise will make it more comfortable.

You HAVE you spend money to make money.

[TexasHusker]

“Max out your 401K.”

Worst advice ever, on many levels.

[greenskeeper]

coworked decided to trade in his car because finance rates were going to go up. He had 5 months to go and it would have been paid off. Now he's got another 84 month loan.

[bjl584]

Most people around me tell me that I work too much, I save too much, and that I don't spend enough on fun. Most of those people are broke.....

[Singuy]

If we heard someone spouting off all of that, we would whisper 'Idiot alert' and put them on ignore!

Guess what, I would say over 95% of the people think this. No one understand taxes. Everyone thinks you just multiply your income X tax bracket and that's how much tax you pay, so naturally you can see how you can go "backwards" on certain point of the earnings scale.