Crappy Advice


Have you ever noticed the disclaimer I have in the left column (towards the bottom) of my blog? I put that disclaimer up for one reason….every other blog I read has one. Do I really need it though? If I didn’t have it, and someone followed my advice and wasn’t happy with the outcome, could they really hold me responsible? Regardless of whether or not I actually need it, I have no plans to take it down because I want it to be very clear I am no financial expert.

Rarely do I actually provide advice to my readers. If anything, I more beg you all for advice and insight. The roles are reversed here at PDITF. I have no financial credentials, and honestly, I’m still pretty new to this whole money/career/adulthood thing, so why would I tell you how to live your life. Answer: I wont…  

Yes, I Have Opinions

Don’t get me wrong, I definitely have my opinions. I want you to beat the living snot out of high interest debt. Want you to be spending less than you make. You should contribute to your 401K or Roth IRA or both!

I want you to live comfortably and look back on your life and say “Job well done.”

Even though I believe these things are a crucial ingredient for financial freedom, I don’t really write about them. Why? Because my advice is worth what you paid for it…nothing! I think a lot of crappy advice is the result of taking financial principles and making them universal, when they should be PERSONAL. Would you agree?

I may say something like “You need to start contributing to your Roth IRA today!!!” But the truth is, I don’t know you. Maybe YOU shouldn’t be contributing to a Roth. Maybe you need to go backpack Europe instead. I have no desire to travel, so it’s easy for me to tell you to save money for retirement. But if culture and diversity is how you want to invest in yourself, then by all means, save money for a backpacking trip. My goal is not to tell you how to live your life, but only to show you how I am living mine.

I did a little google research and came across some of the crappiest (and funniest) advice I’ve ever seen…

I know I’ve posted this one before, and I know it has nothing to do with PF, but it is too darn good to pass up….

Personally the worst PF advice I ever received was to consolidate my student loan. It was given to me by Mom Ninja, but with the purest of intentions. My sister who graduated a few years before me consolidated and locked in a stupid low interest rate of 2%. Since things worked out so well for my sis, mom (and I’m guilty too) thought consolidating would be equally beneficial for me. Turns out it was a mistake. I locked in one of the highest student loan interest rates in years. It ended up not really being that big of a deal, since I am only a month or so away from being debt free, but it definitely served as reminder to be cautious when I follow others advice and at the very least, do a little research before making a BIG decision.

I’d love to hear the worst PF advice you’ve ever been given (or heard given to someone else). Drop a comment below and let me know!

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  1. The worst advice I’ve ever gotten was given to me by a co-worker with a horrible shopping addiction. He said:

    “Credit card debt isn’t that bad. Sure you pay 20% interest, but you can get rewards points on your interest payments!”

    No thanks.

  2. When I was much younger and just starting out, I listened frequently to an old fart on WOR-AM named Bernard Meltzer, who claimed to be a universal expert on everything, but whose financial advice was as bad as the rest of his advice probably was. Bernie was adamantly opposed to investing in the stock market, and not knowing any better, I assumed he knew what he was talking about. No doubt I lost tens of thousands in investments by paying attention to that ass.

    Now if I want to hear or read bad advice, I can just tune in to Suze Orman every week and shake my head in dismay at some of her nonsense.

  3. From a ‘financial guru’ to put all your money in cash when the market plummeted a couple years ago. I would rather be chicken little when the market is at a high than at a low. I stuck it out and most my investments made 35 percent or so that year. (As did everyone else’s.)

    To me, the time to evaluate pulling out money is when the market is doing well moreso than panicking at the bottom.

  4. the worst advice i ever got was to invest around 15k in a mutual fund in 1997. By the time i cashed out in 2009, i had gained about $1000. i know it was good sound advice at the time, but in hindsight, obvisouly i could have made more money doing something else with it.
    my friend also got some terrible advice involving his credit cards. He was told not to pay them off completely as it would look better on his credit report if he had a balance, obviosuly this is a straight up lie and i have told him otherwise since then! now hes debt free!

    Preferred Financial Services

  5. I too was told by a coworker that carrying a credit card balance would help my credit rating…I replied that I’d also be paying interest constantly which seems stupid. They thought about it for a minute and agreed. It helped to know that my credit was stellar and I had never carried a balance.

    I was told once by my mom that Roth IRA’s were a bad idea because “of course you’ll be in a lower tax bracket in retirement”. I replied with two things.

    1) We’re in the 15% tax bracket now since we make so much less than my dad (Dad is a high-up Civil Engineer…hubby is a teacher and I’m a glorified office worker – we make less than him put together)…it probably won’t get lower than that for us…ever.
    2) Have you seen the national debt? At some point, taxes will be raised and it will probably happen at the worst possible moment for my husband and me.

    She also thought about it for a couple of seconds and agreed that my situation was a lot different than their situation. I do believe this is the only bad financial advice that my mom has ever given me…not bad Mom!

    I’ve also heard all kinds of crazy things, but they were never directed at me. Squirrelers, another pf blogger, mentioned an ex-coworker who told everyone to invest everything they could in their company stock. That’s enough to make anyone living around Enron to cringe…

  6. In 1993 I was bombarded by financial advertisements to invest in an IRA. Unfortunately, I did not know that what is more important than just having an IRA is what particular investment is in the IRA. So I trusted my insurance agent to sell me his high commission, non-performing mutual fund. After 7 years of -3% returns on that mutual fund I rolled it over into an online broker and lost more money in the dot com bubble. Two hard lessons caused me to be extremely bitter and paranoid in regards to investing. Now I just stack my cash in FDIC insured savings accounts. Works for me.

  7. My bad PF advice was actually the lack of it. My mother actually let me clear out the savings I had after graduation (not much maybe 500) and move to San Francisco for college. Just like that! No budget, no ‘hey, everything is going to be 10x more expensive’, just me being broke as a joke after maybe 2 months.

  8. We just finished reading Susie Orman’s Money Book for the Young, Fabulous & Broke, we really don’t understand some of her thinking. There was so much of that book that we skipped over because we didn’t agree with it. We think that was probably the worst PF book we’ve read so far, and we’ve read quite a few!

    We had a friend who used a Financial Adviser, so he was paying the advisor to help him do exactly what all of us are doing because he was basically too lazy to do it himself. He even recommended the advisor to us, and other people. We basically said, no thank you, and are doing it ourselves. We feel so much more of an accomplishment because of this and we are both very determined to stay debt free (credit cards, student loans, car loans) because we are working so hard to do this.

  9. I was given some bad advice from a friend who said it was a good idea to buy as many rental homes as you could – all at one time – with no down payments. You had to do it at the same time, however, because otherwise the credit inquiries would show up on the credit report.. then just rent the homes out and collect rent!

    He ended up following his own advice, bought 3 rental homes at the same time. 3 years later he just filed bankruptcy and has 3 foreclosed on houses. didn’t see that one coming

  10. I tend to give advice on my blog more than I receive it. But I tend to deal primarily with investment mindset and asset classes more than I do other things such as debt or personal living.

    That being said, I always figured mentality and knowing one’s self is the #1 aspect to get a hold of before doing anything like investing. Interestingly enough, you seem to know yourself exceedingly well, which puts you way ahead of the game.

    Ultimately, investing is something that requires formulas and strategies. It’s a very variable game, with all of that risk/reward thresholds, but it is being strategic and cunning that is perhaps most important.

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