#FinancialAdvice #OutdatedFinancialTips #MoneyManagement #PersonalFinance
Are you tired of hearing the same old financial advice that might be more suitable for your grandma’s time rather than the fast-paced world we live in today? đź’¸ Fear not! In this post, we will explore some examples of outdated financial advice that you should probably rethink before following. Let’s dive in!
1. “You need to save 10% of your income.”
Back in the day, saving 10% of your income might have been a standard suggested percentage. However, with rising living costs and inflation, this might not be enough to secure your financial future. Instead, consider saving as much as you can afford or following the 50/30/20 rule.
2. “Avoid all debt at all costs.”
While it’s true that being debt-free is ideal, not all debts are created equal. For example, taking out a mortgage to buy a home can be a strategic financial move in the long run. It’s essential to differentiate between good debt (like a mortgage or student loans) and bad debt (such as high-interest credit card debt).
3. “Investing is only for the wealthy.”
Gone are the days when investing was reserved for the elite. With the rise of robo-advisors and micro-investing apps, anyone can start investing with as little as a few dollars. Start small and gradually increase your investments as you become more comfortable with the process.
4. “Renting is throwing money away.”
While owning a home can be a great investment, renting also has its perks. Renting gives you flexibility, eliminates the stress of home maintenance, and allows you to invest your money elsewhere. Don’t rush into homeownership without considering all the factors.
5. “You can time the market.”
Attempting to time the market by buying low and selling high is a risky strategy that even seasoned investors struggle to get right consistently. Instead of trying to predict market movements, focus on building a diversified portfolio that aligns with your long-term financial goals.
In Conclusion,
Gone are the days when investing was reserved for the elite. With the rise of robo-advisors and micro-investing apps, anyone can start investing with as little as a few dollars. Start small and gradually increase your investments as you become more comfortable with the process.
4. “Renting is throwing money away.”
While owning a home can be a great investment, renting also has its perks. Renting gives you flexibility, eliminates the stress of home maintenance, and allows you to invest your money elsewhere. Don’t rush into homeownership without considering all the factors.
5. “You can time the market.”
Attempting to time the market by buying low and selling high is a risky strategy that even seasoned investors struggle to get right consistently. Instead of trying to predict market movements, focus on building a diversified portfolio that aligns with your long-term financial goals.
In Conclusion,
Attempting to time the market by buying low and selling high is a risky strategy that even seasoned investors struggle to get right consistently. Instead of trying to predict market movements, focus on building a diversified portfolio that aligns with your long-term financial goals.
In Conclusion,
In today’s ever-evolving financial landscape, it’s crucial to stay informed and adapt your financial strategies accordingly. By reevaluating and updating your financial advice, you can set yourself up for a more secure and prosperous future. Remember, it’s never too late to ditch the outdated advice and embrace new, more relevant strategies! 🚀💼
Invest in blockbuster video huge market.
Print media is the only media worth investing in.
“You will spend 20% less in retirement”
My mom still funds a Christmas Club each year
T Bonds are a great long term investment.
Spend 3 months’ salary on an engagement ring.Â
I know it’s fine for now, but I do sometimes wonder about the long term efficacy of index funds. Almost everyone does it now, surely that has changed the calculus in some way? In 20 years are we still going to be able to count on a 7-10% annual return?
You need to be diversified and have a 80% stock/20% bond mix in your 30s and closer to a 50% stock/40% bonds/10% cash when you are at retirement age. It’s perfectly fine not to be diversified and be mostly (or entirely) in stocks during your working years, especially if you have a stable career. Plus these rules came when bonds were paying more than 8% interest rates.
Stay with your company, they’ll reward your loyalty.
With the start of index funds, most people don’t need financial advisors. (Edit: this was phrased wrong. I mean that financial advisors are the outdated advice.)
Renting is throwing away money.
Pay cash for everything.
1k is enough for an emergency fund
“Only use cash” unless you have a problem with overspending money you don’t have, you’re leaving money on the table. All prices have raised to accommodate the fees on credit cards, if you aren’t getting benefits from your card back you’re getting charged more for nothing back.
That if you walk into a business with cash you can name your price. Business make far more getting you to finance.
Almost anything Dave Ramsey says, specially things like buying your home in cash. That was good advice when houses were cheap enough you only needed a couple years of savings to buy it out right and interest rates were in the double digits.
Only use credit cards if you have to.
Leaving free money on the table if you can always pay your debts.
“A used car 2-3 years old is the Best Buy.” Ehh not so much any more…
Work hard and you’ll be rewarded for your efforts.
“Your house is an investment.”
I’ve lost money on every single real estate purchase of my life.
Don’t spend more than 24% of your gross income on mortgage/rent.
Buy bonds as a way to build money?
Use a credit union only! Not the car dealership.Â
work at a company and get a pension. If you just change jobs every couple of years your income is going to go way higher than staying at the same company
“Buy bonds”
Don’t do that. Buy an index stock fund (S&P 500) and just leave it alone. Sure it is more volatile, but over decades of time it will do much, much better.
Debt is bad.
There is good debt and bad debt. Being able to differentiate between them, makes a world of difference.
Build a winning portfolio by buying shares of IBM, blockbuster, JC Penny and throw in some Enron and Standard Oil for good measure. While we are talking about, can I interest you in some tulip futures…I know a guy who’s got a friend.
VHS is here to stay. Look how it powered the San Fernando valley
the coal that powers everyones homes?
I feel like a few of the examples in this thread have actually come full circle and might be valid again.
As in, the commenters are looking backward at advice that was bad in 2010 but might actually be a good idea in the rather different economic conditions of almost 15 years later.
Buying and holding land is a good investment. Most of the time, it’s not. When it is worth it, it’s likely not going to pay off within your lifetime. Meanwhile, you have to hold land that produces no earnings or passive income without additional investment of your time or capital. It’s not liquid and highly speculative.
The other bad advice is that cash is king. Cash is king is good when the real estate investment provides cashflow positive returns. But holding a large amount of cash for a long time eats away at your buying power.
Investing in mutual funds, although it isn’t the worst of advice, there are much better ways to earn a retirement that are less costly and perform better. Such as ETFs.
Getting credit cards is a good idea. This is terrible advice for the unemployed or part-time workers. It gets people into troublesome spending behavior.
Buying a home is the best investment. It’s really not, especially in states or countries that have expensive homes. Homes require a lot of maintenance and taxes, which can cost a lot to pay the mortgage. The opportunity cost of investing in stocks and renting could be worth it, especially if you live in a country with average home prices that are over 4x your gross income.
All I can think of for now. I am sure there are plenty of other pieces of advice that are terrible. But these are some of the common ones. Also, you have to remember that financial advice depends on your situation, risk tolerance, and goals. Good advice for you, can be terrible advice for others
“Renting is throwing away money.” You can become very wealthy renting your whole life if you save and invest. Owning a home will not make you very wealthy if you don’t save and invest. Owning a home is a sound investment if you’re going to live their 7+ years. Buying a home is expensive and unpredictable. Maybe owning that home is a high priority for a more secure retirement.