Here's a list of five signs of bad financial advice from Suze Orman:
1. You own a mutual fund with the letter "B" in its name.
2. You pay the advisor through commissions rather than a flat rate.
3. Your life insurance is a cash-value policy.
4. You own a variable annuity inside of an IRA.
5. You're saving for your kid's college education rather than for your retirement.
Oh, yeah! I'm TOTALLY with her on these!
None of these apply to me, but I know several people who have one (or several) of them that they're dealing with. Probably the most common one is #3. Yeah, I know I'll get comments on how great a tool cash-value insurance is, how it is the perfect solution to financial issues in certain situations, and on and on. But for me (and for most people) the right decision is to buy term and invest the difference.
The piece ends with some advice from Suze that I also agree 100% with. Here it is:
Take the time to become educated about your finances so you can make your own informed choices rather than relying on someone else. At the end of the day, no one will ever care about your money more than you. You're your own best financial advisor.
Well said!
Ouch I'm a victim of 1,2 and 4. Everything I read blasts variable annuities inside IRA's and I am really scared, but at the same time I have earned on average 14% over the past 2 years with it.
Posted by: Mark | December 20, 2006 at 09:34 AM