A few weeks ago when I wrote the post What’s the Best Financial Advice You Ever Received?, my husband told me that it would be helpful for people to share the worst financial advice too. I agreed, but thought it would be easier to keep the two separate. Thanks to all of you who shared the Best Financial Advice You Ever Received, now I’d like to hear about the Worst Financial Advice You Ever Received.
When I think about the Worst Financial Advice I ever received, I would have to sum it up into — any get rich quick scheme. You know the ones where you put in a little money and then you instantly become rich overnight. I’ve been approached with pyramid schemes, e-commerce business opportunities, hot stock tips and other seemingly enticing investment offers.
The common things with these get rich quick schemes or scams (in some cases):
- They usually sound too good to be true, which is the first red flag.
- Sometimes it feels like they are pressuring you to make a decision and make it quick. In other words, you have to do it now and there is no such thing as tomorrow.
- They do not like answering too many questions.
I simply AVOID these get rich quick schemes/scams with a friendly – No thanks. If they get too pushy about it, then I follow it up with a firm NO! 😀
“The ability to say “no” is a tremendous advantage for an investor.”
– Warren Buffett
FTC.gov offers some great tips to help consumers avoid these types of investment schemes. Click here to view them.
What’s the Worst Financial Advice You Ever Received? Please share it using the comments. I’d love to hear from you. 🙂
Photo: geoftheref
Buying permanent insurance as a part of a savings plan. I have owned such policies in the past . They typically, offer very low returns for the first five to seven years. It is better to buy term insurance and invest the rest of the premium in a bank savings account which pays a reasonable interest or invest it into a certificate of deposit.
That’s a great point Dad! I agree that it’s better to buy a term life insurance policy and invest your money elsewhere. Thanks for sharing your worst advice with us. 🙂
Some people think that it is best or perfer not to pay their income taxes during the year as they make their money and pay IRS at the time for filing, on 4/15. Not always so good. Thorough planning is necessary in order to not have penalties, (even though you may pay the full tax due) such as estimated tax penalities.
Not good financial advice
Ref: IRS publication 505
Thanks for sharing your words of wisdom Ms. Jackson! There are a lot of myths out there as it relates to taxes. Avoiding tax penalties is a great way to keep more money in your pocket!
A friend suggested that I take out a personal loan in order to travel abroad, if the cost is too expensive for my pocket book. I decided not to take on the debt.
@Sue – That’s exactly how we go into debt, living above our means. It’s that marketing ploy Buy Now and Pay Later that we hear from companies and those who have bought into that way of life. You made the right decision. I know plenty of people who are trying to dig out of debt who used credit cards to fund trips they really could not afford. Thanks so much for sharing your experience with us! 🙂