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« Do You Plan to Move When You Retire? | Main | Free Money Finance March Money Madness, Round 1, Posts 5-8 »

February 08, 2012

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I think one of the most important things you need to do before taking anyone else's advice is make sure they know more than you do. Use a credit card for all of your college books and fees?? What about borrow from your friends or buy online for 10% of what it costs new??! Yikes - at some point you have only yourself to blame for listening to some of these tips.

About a decade or so ago, an advisor from a well-known firm told me to put a lump sum in one tech stock that, at the time, was down from over $200 per share to about $40. His reasoning was that "our advisory team believes it will bounce back." I did it. It's all gone.

The worst part of it all was that I just blindly agreed. I didn't ask any questions about what they did, whether or how they made money or why I should put it all in just one stock. My fault for sure. But crazy advice IMHO.

This isn't strictly financial, but the worst advice I ever got was to get the highest paying job I could, regardless of whether I enjoyed it. The reasoning was you're not going to like work anyway, so you may as well have the money to live it up on the weekends. Just terrible advice, and a terrible way to go through life.

Worst financial advice: "Buy a house -- it is a great investment."

A CPA at this Christian-based firm advised me during the height of the housing bubble to do a cash out refinance and use the equity to invest in whole life insurance. He pointed to the final figure, $980,xxx, in the exercise to show me how much money I could build by the time I retired. His nerves show through as he gave the advice and if I had not had that sense, I would have taken what I then thought was an excellent financial plan.

My best advice, research everything fully before every decision point in life including every time you have to sign your name. There is nothing out there that cannot wait a day or two for applying your due diligence.

hmmm.. I had a reply to this but I don't see it. Sometimes I hit the submit button and forget to enter the 'code' to get past the spam filter.

In my opinion most of these examples of 'bad' advice depend on the situation. I dont' think its bad advice to tells someone to buy a mutual fund for long term investing. It may or may not be bad advice to tell someone not to invest in a small business.. depends on the business.

Putting college costs on a credit card doesn't seem like good advice at all.

Perhaps the worst financial advice I received was no financial advice. Somehow in my formative years the message in our nuclear family was do not talk about money, ambition, betterment, college, owning a business, personal growth, or improvement. I guess we were suppose to be content and not ask questions. But I see now that that was no way to live. Maybe we just didn't know of a better way.

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