Never Follow These 7 Terrible Financial Tips!
We think financial advice can be categorized in one of three ways: good, bad, and appalling. Sometimes people pass on advice in good nature, unaware that it can be misleading and downright dangerous.
On our page, we try to give you tips and tricks that fit a number of lifestyles in the hopes that we will protect you from making bad decisions with your money. But leading people down a good path also means we have to protect you from advice that could be harmful.
That’s why today we want to cover the worst financial advice we’ve ever heard so that you’ll know to avoid them like the plague! Some of these are outdated, some of them don’t cover the whole truth, which could lead you down the wrong and financially devastating path.
Click NEXT to find out more!
Save 10% of Your Income for Retirement and You’ll Be Set
Some time ago, saving 10% of your income for retirement was acceptable. But nowadays? You’ll be in a world of trouble and financial difficulties if you follow this advice. Some older folks may consider that what worked for them or their parents is going to work in today’s day and age too.
Our lifespans are considerably longer. Healthcare costs have risen exponentially. The cost of living, alone, is daunting to even consider during retirement on a fixed income.
If you want to know how much you need to save for your golden years you have to figure it out yourself, preferably with the help of a financial adviser. This way, you’ll know exactly what sort of costs you want to cover that are specific to your needs.
Carry a Credit Card Balance
Your credit card balance plays a role in your credit rating- this much is true. But people pass on this advice because they think it has a much bigger impact than it does. In actuality, it represents such a small fraction of your credit score, you’re better off trying other strategies.
Most notably, you should focus on using a credit card that has a good bonus program while paying off your balance in full each month! By doing so consistently, you will ensure that your credit score is in good condition. Of course, there are many ways to ensure that your credit score is good, and we’ve got you covered!
Renting Is Just Throwing Money Away
There seem to be two reasons why people consider renting to be a waste of money. First of all, society has propagated the idea that not owning your own home is a failure in some way. For many, it represents an important stage of adulthood.
Secondly, many people believe that paying rent is a waste of money because you’re lining your landlord’s pockets. But homeowners seem to ‘forget’ that they too need to pay up when they buy a house. From mortgage insurance, homeowners insurance, property taxes, home and property maintenance costs, homeowners association fees, and other costs, you still have to spend a significant amount of money.
If your monthly mortgage payment will be 25% less than what you’d pay in rent and if you plan on living in the same place for at least five years, then buying a home could be a good option for you. Otherwise, there’s no reason for you to not keep renting.
Avoid Credit Cards At All Costs
It’s true, we have a big problem here in the U.S. when it comes to credit card debt. But owning a credit card won’t land you in immediate danger. It’s how you use it that can make or break your finances.
Most credit cards offer rewards, but they also offer all kinds of insurance such as car rental insurance, travel insurance, and fraud protection. So they do come with a lot of benefits on top of allowing you to establish good credit, which you will later need in order to make big purchases further down the line.
In conclusion, credit cards aren’t bad if you use them responsibly!
There is Good Debt and Bad Debt
Many people, including a lot of financial advisors, categorize debt into good and bad debt. This doesn’t mean that there are bad reasons to borrow money- in some cases, you may not have a choice, but if you’ve been taught to think of that specific reason as ‘bad’ then you’re less likely to do it, which could end up costing you a lot more.
The bottom line is that it’s perfectly acceptable to borrow money just as it is perfectly acceptable to avoid borrowing money. If you do borrow money, your main focus should be getting rid of that debt, even if someone might call it ‘good’ debt. Just because it’s ‘good’ doesn’t mean you can avoid paying up!
Retire as soon as you can
Many, many people will tell you their vision of a perfect retirement. In most of these cases, these tips include when you should retire and they’ll mostly tell you to retire as early as humanly possible.
But is this a good idea? Far from it. You need to retire when you feel ready, both emotionally and financially. If you rush to get to an early finish line you may not have time to save up enough money. If you’re young and active in your career, you could even find retirement to be unbelievably boring!
So, do what works for you and stop worrying about what other people say!
Invest Your Money In Gold/Silver
Whoever said that investing in silver or gold is 100% safe needs to take a good, hard look at their own advice. They’re incredibly volatile, so get ready for 5% daily shifts and even 50% drops in a year. So, no, don’t invest all your money in gold and silver.
Instead, focus on a diversified portfolio. This was you can ensure that your money won’t disappear in the blink of an eye when we hit a rough patch. With a Roth IRA, some bonds, and a lot of stocks, you should be all set… and if you insist, throw a little gold in there if it’ll make you feel better!
We hope this advice helps. What other tips have you heard from friends and family that made you think twice? Comment down below to let us know!