Worst. Advice. Ever.

I consider myself a pretty tolerant person. I understand that others may not feel the same way I do about politics, religion, marriage, unicorns, and money. That said, I have a moral obligation to call out bad advice when I see it, and today I plan to do just that.

Last week I overheard two people having a conversation about budgeting and saving. Like a true Ninja, I inched closer to where they were talking so I could eavesdrop on their convo. It went a little something like this…

Insecure Guy: My company offers a 401K match, but retirement seems pretty far away and having more cash now is pretty appealing. That said, I feel like it’s stupid to give up free money.

Idiot Guy: Dude, don’t even bother with the 401K. In fact, don’t even bother with investing or saving. You should live it up now. I mean, what if you died tomorrow?

Insecure Guy: Yeah I guess that makes sense, especially with everything that’s going on now in the economy.

Idiot Guy: Do you really want to work hard, and live frugally, during the best years of your life for the hope that the last few years of your life will be “good”? No way, dude. Have fun now!

I couldn’t really hear where the conversation went from there, but I’m really hoping Insecure Guy said something like “You are a stupid-head and I think it should be illegal for you to have kids.”

Can you believe how ignorant that idiot is? Worst. Advice. Ever. Unfortunately, I’ve heard at least a handful of my friends and acquaintances proclaim similar sentiments over the years. Bad advice is apparently contagious.

Look, I could care less how you feel about the stock market. It’s virtually indisputable that over a long time (think like 20+years) the market is the best way to grow your money. It beats savings, CDs, real estate, etc EVERY TIME. Sure the stock market gets fussy every now and again, but overall it’s one heck of a performer. Even if you don’t like the stock market (as I know a few of you faithful commenters don’t), you should still be doing something to try and save/grow your money.

My issue with this bad advice is that it makes assumptions based off highly unlikely, and depressing, circumstances. I mean, who wants to live their life like they’re knocking on death’s door? I personally like going to bed at night, being relatively confident I will live to see another sunrise (not that I actually wake up early enough to see the sunrise, but you get the point).

Is tomorrow guaranteed? Of course not, but I’m going to bet you, YES YOU, $1,000 you’re not going to die today, tomorrow, one month from now, or one year from now. Facts don’t lie, and facts tell me that the average life expectancy in America is mid to late 70’s. That means you should plan on living until you’re wrinkly, gray, and wearing adult diapers. Which also means you should plan on providing for yourself in your 70’s now…as in today! It’s never too early to start preparing for the future.

Grrrrr… stupid people, who give bad advice, make me angry. Have you ever heard someone try to argue against the value of saving/investing? Do you see ANY logic to the “live it up today” mantra, cause I sure as heck don’t? What’s the worst personal finance advice you’ve ever heard someone give?

23 thoughts on “Worst. Advice. Ever.”

  1. When I started contributing to RSP’s in my late 20’s, my sister said I was an idiot for putting money away for a retirement that wasn’t going to happen for another 40 yrs.; that money enabled me to put $20K towards the purchase of our condo 8 years ago (you could take up to 20K from your RSP {tax free} for the “First Time Home Buyers Program – today, it’s increased to $25K – and you have 15 yrs. to pay it back). I still contibute 2x/month to my RSP’s, and I have one through work that my employer matches (as well as a pension); Hubby’s work offers the same stuff I get. We’re not relying on the gov’t to have enough money in the coffers when Hubby and I retire; we have to take matters into our own hands.

    I’ve heard these types of conversations between Insecure Guy and Idiot Guy… makes me want to bang my head on the table!! What a couple of goofs!

  2. There are 2 issues I see here. One is a failure to understand probabilities. Unless you’re living a very high risk lifestyle highlighted by crack use, crocodile wrestling, and riding stunt motorcycles all at the same time, your likelihood of imminent demise is ridiculously low. Thus, spending your money in a way that supposes this reality is just DUMB. The other issue is the all or nothing thinking illustrated in the idea of not bothering with a 401k at all. You don’t have to put $16,500 into retirement every year or do nothing at all. You just start where you can, and hopefully your maximizing your employer match. At least if you start, it creates a positive habit.

  3. Up until today I’d have said the worst financial advice I’d ever heard was a friend who said it made sense to lease his car because he knew he’d always want to have a new car and leasing was an economical way to do that. But Idiot Guy’s advice to Insecure Guy takes the cake. For the love of decency, Insecure Guy, get some new friends.

  4. If I die within the year Ninja I am going to haunt you till I get my money lol

    The insecure guy seems like he is not going to invest even though he knows it’s free money. Everyone comes to a realization at one point or another and everyone has to learn a lesson, sadly some people learn the hard way.

    As a PF Ninja you should have slipped by him and left a card with advice telling him to go for the free money.

  5. I’ve been contributing to my RSPs since I was a teenager, thanks to smart decisions & advice from my parents. I’m in my 30s now. A couple years back, my cousin mocked me for ‘wasting my time and not using the money to buy a new car.’ His retirement plan? Die young. Yeah. He wasn’t kidding.

  6. I was just watching one of those get out of debt shows, “Till Debt Do us Part” or something, and the lady told the couple to roll all of their credit card debt into their mortgage (!) If you can’t pay your credit cards now (and have shown a propensity to run up reckless expenses), don’t tie your unsecured debt to your house!

    • To be fair, the host almost never gives advice like that. (And the show is totally awesome.) Just when a couple is completely screwed and overwhelmed by credit card debt. Then she takes away their credit cards FOREVER. It’s good advice to consolidate, but only if you never, ever, ever get yourself into consume debt again.

  7. I hear people say the same thing about their health, which is kinda funny to me because the fastest way to make sure you die early, is to be completely unprepared for old age! And the fastest way to make sure you have no possibility of retiring, is to never save for it. Doesn’t sound like a good deal to me!

  8. I’ve always found the optimal answer to “What if you get hit by a bus tomorrow?” to be “What if I don’t get hit by a bus tomorrow? I almost wish someone would try to be Idiot Guy to me so I can go off on them.

    • Exactly! Idiot guy will be the one whining when he’s old and gray and has to live like the pauper that he is. I’d rather prepare for the best (a long and healthy life) than predicate my plans upon the worst case scenario (being hit by a bus!)

  9. I actually got into an PF argument with a co-worker last week based on the lunacy of the preacher who is predicting the End of Days next week. This was seriously his foundation for arguing against long term investing. I look forward to him greeting me at McD’s when I hobble in for my daily senior discount coffee. And if I’m wrong, I’ve got much bigger problems to worry about than eating crow.

  10. If Idiot guy lives to retirement, he won’t be living it up the way you will be Ninja. He’ll be in some low-income retirement home with C- service. While you’ll be living in the mansion next to your favorite California Burrito joint. (Or just have one built in the second floor of your mansion).

  11. I was in a car with friends when one mentioned that their financial advisor encouraged them not to pay off their mortgage sooner so they could take advantage of the tax break. This was bad advice for 2 reasons – the advisor didn’t explain how the tax break works and he didn’t suggest investing the difference (a common reason people keep their mortgage).

    I tried to explain to my friend, but he was convinced that his financial advisor had the best advice. *sighs*

  12. Idiots are everywhere. I spend 8 hours of my day sitting near one. He laughed when he heard that my vacation was 4 times cheaper than his. I laughed right back at him when I found that I was my net worth is 3 times greater than his. He then went on to say maybe we’d make our first million together…I’m really never going into business with anyone like that.

  13. I have friends that are like this. Granted we are still 20 and younger.. but still. When someone says to me, “I live for the now!” then I snark back “That’s great, but when you’re 70, you won’t be able to ‘live in THAT now’ if you don’t have any savings!”

  14. I am one of the few who believe the stock market is a ponzi scheme CEO’s created but there is a value to having an independence fund. Unless you are lucky and have a job or business you love, it sucks to HAVE to work. Having money gives you freedom to do what you want. That is how you should live.

    There is some value regarding idiotguy’s argument. Currently, I feel we have been saving too much and not enjoying our money enough. Then again, maybe I’m spending too much money and not saving enough. Striking that balance is tough. I’ve read much about this but I’ve had trouble finding a good percentage or amount in regards to spending versus saving. I need balance…

  15. I had a friend tell me that “a really good friend of his in the banking industry” told him that the best way to get a good credit score is to always have a balance on your credit cards and pay interest on it. “Not too much, though, leave like $10 at all times.” And my friend believed him! And he was studying finance at that time!!! I was speechless, I thought he was kidding. But then I realized he really believed that advice he had gotten. :-O

    Needless to say, I set him straight.

  16. The worst part being the don’t even understand that a 401k is not synonymous with the stock market. It is just a shelter for your investment. They could put the money in a freaking savings account 401k if they really wanted to. And of course they’re giving up a 100% return on their money by not matching.

  17. I agree with what StackingCash said earlier. There can be an instance where saving to much into a 401k or Roth IRA account is beneficial, until the day comes when unexpected expenses have you reaching into retirement savings to pay for funerals or medical expenses. Next thing you know, you’re being charged penalty fees and interest on your loan that ultimately didn’t have to happen if you just took the time to seek out the balance between saving for retirement as well as have available finances for today.

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