99% of financial advice is just…bad.
It’s not that people are intentionally dishing out bad advice.
No, the bigger problem is people just regurgitate what they read online as if it were fact without realizing it’s bad.
I achieved financial independence eight years ago, and I’ve been knee-deep in personal finance for the past decade.
I’ve seen my fair share of bad advice.
And guess what? I made a list, lol.
Today, I’m going to share with you the 17 worst pieces of financial advice I’ve ever heard over the years.
Chances are you’ve heard some of these, too.
Don’t follow them.
17 Terrible Pieces of Financial Advice
1: Carry a balance on your credit cards to improve your credit score.
I’ve never carried a balance in my life.
Not once. And, here’s my credit score as of today:
This advice is downright criminal.
2: Your 9 to 5 won’t make you rich.
I’m proof-positive that’s a lie.
With proper money management skills, your 9-to-5 CAN MAKE YOU RICH.
It happens all the time.
The keys to making 9 to 5s work?
- Switch jobs often
- Invest in your 401(k)
- Work your ass off, daily
Don’t like your career? Here’s your 7-step guide to choosing a better one.
3: Follow your passion.
That’s terrible advice.
Your passion won’t pay your bills, but your strengths will. Pursue a career that aligns with your strengths.
Maximize your earning potential.
4: Save 10%, and you’ll be set.
On so many levels, this is nonsensical.
- Life spans are expanding
- Taxation on the rise
- Jobs are changing
10% won’t cut it.
Fund your 401(k) and Roth IRA.
Build an emergency fund.
Your future will thank you.
5: The mortgage you’re approved for is what you can afford.
2009 is proof that’s a lie.
Your approved mortgage is the risk the lender will take on YOU.
Don’t let the lender make you house-poor.
6: Watching Netflix will make you poor.
Watching Netflix isn’t the issue.
It’s a lack of motivation. An unmotivated person who cancels Netflix will replace it with another distraction.
You aren’t a lazy bastard if you watch Netflix.
Just keep it in moderation.
7: You only live once.
In other words, “Spend your cash on temporary happiness crap.”
How about this: You only live once. Achieve FI and do whatever the heck you want.
That sounds much better to me.
8: Never use a credit card.
Using a credit card responsibly is one of the best ways to maximize your dollar. Why?
- Build credit
- Fraud protection
- Acquire airline miles
- Warranties on purchase
Let credit work for you. I may have written an email about this in August.
Just be sure to pay your credit card off every month.
9: Renting is throwing your money away.
Homeownership is MUCH more expensive than people realize.
- Opportunity cost
Renting gives you options that homeownership doesn’t.
10: You gotta hustle 24/7.
This awful advice traps people into a life of burnout.
Your rest and relaxation time is required to hustle. It’s healthy. Without rest, there’s no hustle.
Give yourself enough rest to wake up every morning ready to go.
If you wake up tired, you’re burning yourself out.
11: There is no such thing as good debt.
Untrue. Smart debts pay off.
- Student loans
- Business loans
- Home equity loans
- Mortgages (sometimes)
“All debts are bad” is elementary school thinking.
12: Crypto is the future.
Nobody knows that.
Never take advice from people who believe they can predict the future.
13: College is useless.
College graduates earn more than non-grads. Them’s the facts.
Exceptions apply but never count on being an exception.
Don’t allow people to talk you out of a smart career foundation.
Now, it’s true that college is expensive, but here are three ways to make college cheaper.
14: Read 5,000 books a year.
Reading is overrated.
Doing is underrated.
The marketplace does not care how many books you’ve read. It cares about what you can do.
Stop stacking knowledge and start gaining experience.
15: Your credit score doesn’t matter.
This is something people with low credit scores say.
A good credit score means things are cheaper. What types of things?
- Car loans
- Business loans
- Insurance rates
- Security deposits
And, don’t forget: Employers/landlords can check your credit.
16: Don’t worry about saving, just earn more.
This is a fallacy.
The more you earn, the worse your spending problem gets.
You will NEVER be able to out-earn destructive spending habits.
17: Investing is gambling.
With gambling, your odds are not good.
Investments, however, have a clear and direct history of making a LOT of people filthy rich.
- Not your salary
- Not your savings
- Not your upbringing
Chat next week!