Author Topic: Worst Financial Advice (You've heard).  (Read 53489 times)

boarder42

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Re: Worst Financial Advice (You've heard).
« Reply #50 on: May 05, 2016, 02:24:48 PM »

2. Mortgages are good for the interest write off! 

No one who ever owned a home went and mortgaged it so they could get the interest write off.  Why pay the bank 20 grand a year in interest just so you can save $750 from Uncle Sam!

What about you?

thats just bad math.  if we assume 20k in interest and probably 5k in property tax or more,  you're looking at 25k in deductions.  or 6250 a year in tax savings.  even if we take out the standard deduction of 12600 its still 3100 bucks off of the 20k in interest. 

i'd remortgage my house if i owned it outright at todays rates. to get the interest right off and the added inflation security.  you're coming out way way ahead numbers wise not owning a home right now.

sheepstache

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Re: Worst Financial Advice (You've heard).
« Reply #51 on: May 05, 2016, 02:47:45 PM »
"Pay off the smallest debts first so you can snowball them into the other payments once they're paid off. That's mathematically better than paying off the highest-interest loans first."

neo von retorch

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Re: Worst Financial Advice (You've heard).
« Reply #52 on: May 05, 2016, 02:54:43 PM »
"Pay off the smallest debts first so you can snowball them into the other payments once they're paid off. That's mathematically better than paying off the highest-interest loans first."

Ha! I was ready to argue until you threw "mathematically" in there. It can be an effectively emotionally better way than paying off the highest-interest loans :)

galliver

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Re: Worst Financial Advice (You've heard).
« Reply #53 on: May 05, 2016, 02:56:22 PM »
"Pay off the smallest debts first so you can snowball them into the other payments once they're paid off. That's mathematically better than paying off the highest-interest loans first."

Do people actually say that's mathematically better? Because I've mostly heard it's psychologically beneficial (therefore perhaps more likely to work overall).

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Re: Worst Financial Advice (You've heard).
« Reply #54 on: May 05, 2016, 03:02:48 PM »
"Pay off the smallest debts first so you can snowball them into the other payments once they're paid off. That's mathematically better than paying off the highest-interest loans first."

Do people actually say that's mathematically better? Because I've mostly heard it's psychologically beneficial (therefore perhaps more likely to work overall).

I've heard the mathematical (with a side of behavioral) several times.  Their reasoning seems to be that no one who is in debt will actually stick to a payoff schedule if they don't see immediate progress (behavioral) so it's mathematically better (when factoring in defaults) to use the snowball method.

My best counter to this quasi-argument is that people who quickly pay off small debts suddenly have an increased cashflow, which they (behaviorally) use to bump up their lifestyle a bit, making it even more mathematically dubious.  If it takes you 6+ months to kill a large, high-interest debt that behavior is more likely to have become a habit.  Meh.... I won't fault people for choosing the debt payoff method that works best for them.  Either is certainly better than "YOLO!!!!!!!!"

sheepstache

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Re: Worst Financial Advice (You've heard).
« Reply #55 on: May 05, 2016, 03:05:47 PM »
Exactly, it was presented as a mathematical argument :) I'm down with the psychological argument for snowballing.  But it was actually a fairly intelligent, analytical person I was talking to who was convinced it was the mathematically better option. I think her accountant told her to do it that way and she made the assumption it was because it was the quickest without running the numbers herself.  When I brought it up she was like, "but then as you pay off the smaller debts you roll those payments into the larger ones." Right, but still...

thd7t

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Re: Worst Financial Advice (You've heard).
« Reply #56 on: May 05, 2016, 03:05:57 PM »
Never actually had this directed at me, but I know too many HS/college students hear "never, ever, EVER get a credit card!" instead of "never, ever, EVER carry a balance on a credit card." I respectfully disagree with Dave Ramsey in that the credit score game is here to stay, so you might as well learn (and teach your children) to win it.
Credit cards have a pretty small impact on your credit rating. I didn't get one until my mid-30's, but had a credit rating of over 800 with all 3 agencies. Credit cards are a tool, but not as important as you imply.

galliver

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Re: Worst Financial Advice (You've heard).
« Reply #57 on: May 05, 2016, 03:29:45 PM »
Never actually had this directed at me, but I know too many HS/college students hear "never, ever, EVER get a credit card!" instead of "never, ever, EVER carry a balance on a credit card." I respectfully disagree with Dave Ramsey in that the credit score game is here to stay, so you might as well learn (and teach your children) to win it.
Credit cards have a pretty small impact on your credit rating. I didn't get one until my mid-30's, but had a credit rating of over 800 with all 3 agencies. Credit cards are a tool, but not as important as you imply.

Hmm. To the best of my knowledge, the thing the credit report is most attuned to showing is regular, on-time payments over time; it doesn't matter TOO much what types of accounts they're on (yes, there is some benefit to more accounts and possibly diversification). I can't really advocate other types of common credit: student loan, car loan, mortgage for your average student building credit--taking out student loans, or buying a car (and taking out a loan), or god forbid buying a house when you don't need one would be stupid. But everyone needs to pay for stuff in day-to-day life--groceries, textbooks, plane tickets home, TP, etc. why not build the length of your credit history while you're at it.

RL12

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Re: Worst Financial Advice (You've heard).
« Reply #58 on: May 05, 2016, 03:39:50 PM »
My wife and I had our first child two months ago. As I'm pulling up in our four door sedan to load up wife and baby, the nurse pushing my wife's wheelchair looks at the car in astonishment and says "That's your car?? You better get a SUV fast." I loaded everything up and replied back that it looks like everything fits.

Zikoris

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Re: Worst Financial Advice (You've heard).
« Reply #59 on: May 05, 2016, 04:11:59 PM »
"Pay off the smallest debts first so you can snowball them into the other payments once they're paid off. That's mathematically better than paying off the highest-interest loans first."

I think paying off little debts first MIGHT make sense mathematically if the person has unstable/fluctuating income, because of how much it helps with cash flow - by wiping out a bunch of payments, they might be able to avoid late fees and such in a lower income month.

sheepstache

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Re: Worst Financial Advice (You've heard).
« Reply #60 on: May 05, 2016, 05:15:01 PM »
"Pay off the smallest debts first so you can snowball them into the other payments once they're paid off. That's mathematically better than paying off the highest-interest loans first."

I think paying off little debts first MIGHT make sense mathematically if the person has unstable/fluctuating income, because of how much it helps with cash flow - by wiping out a bunch of payments, they might be able to avoid late fees and such in a lower income month.

That's true! The bare minimum you have to pay each month goes down the fewer payments you have altogether and there's an advantage to lower fixed costs. By "better," though, this person meant faster assuming they paid the same amount (which covered minimum payments) every month.

Jeremy E.

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Re: Worst Financial Advice (You've heard).
« Reply #61 on: May 05, 2016, 05:40:33 PM »
1. Cut Starbucks. 

I hear this all the time.  Cutting out 5 bucks a day can save you thousands!  If your biggest selling point is to tell people to stop spending 5 bucks every day, and this is what they are to base their future life on, then it is like telling someone who wants to go to Harvard that they should 'try to stay out of summer school.'  I am all for not wasting 5 bucks a day on coffee, but the people who use this line, generally have nothing else to say.  If it weren't for all the money wasted on coffee, I think they'd have no financial advice to give.  It's not like they are then asking you to consider giving up your car.
http://www.mrmoneymustache.com/2011/08/01/a-millionaire-is-made-ten-bucks-at-a-time/

Kaybee

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Re: Worst Financial Advice (You've heard).
« Reply #62 on: May 09, 2016, 01:20:03 PM »
2014 Dodge Challenger Fancypants Big Penis Edition

I choked and spit water all over my computer when I read this (the computer's still okay). :D

MrsPete

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Re: Worst Financial Advice (You've heard).
« Reply #63 on: May 09, 2016, 03:19:52 PM »
Have extra money deducted from your paycheck every month so you'll get a big tax refund. 

Put this on your credit card so you can get rewards points.  (No mention of paying off the balance every month.) 

Any college degree is worthwhile!  (Sociology or Theater vs. Nursing or Accounting ... um, no.)

College debt is good debt!  (Oxymoron)

You should finance ___ to build your credit rating.  (Screw financial stability!  Borrow so you can raise a number.)

You're always going to have a car payment, so you might as well drive what you want.  Or, the more general:  If you're going to make payments on it anyway, you might as well get what you want. 

Trade in your car for a newer model.  As long as your payment is in the same price range, it didn't really cost you anything.  (Hmmm, can you show me those numbers on paper?) 

Leasing a car makes sense because you don't pay for the taxes and ...  (Okay, I'm pretty sure something else is included, but I don't actually know what.)

Bigger cars cost more, but they're safer. 

Go ahead and get ___ accessory.  It's only another $25 per month.

When are you going to have 5K to pay for marble counter tops?  Go ahead and get them now -- and the upgraded appliances and backyard fence too; that way they'll be rolled into your mortgage.   (And you'll pay for them how many times over?) 

Granite counter tops are outdated -- you need to replace them!  (Should you really throw away things for which you're still paying?)

Putting change in a jar is a good way to save.  Or, the related:  Save all your $1 bills.  (And when you have no small change, you go straight to the ATM?) 

Your kids are only young once, so go ahead and buy them ____.  (Isn't that a good reason to start saving for their educations NOW?) 

Encourage your kids in sports.  Spend on equipment, traveling teams, private coaches, and they'll win athletic scholarships. 

Your kids'll get a complex/lack self-confidence if you only buy them used stuff. 

Your kids feet won't grow right if you put them in used shoes. 

Everyone's in debt.  (Seriously, at a college fair a college financial aid "professional" determined to engage me in a conversation about loans told me that EVERYONE borrows for college.  I looked around the crowded gymnasium and said, "Really?  Everyone?  You're telling me that not a single person in this gym -- and we're talking thousands -- not a single person was smart enough to put away money for his kid's education?  27,000 people attend this university, and not a single one is able to pay?   Really?  Really?  'Cause I can write a check for my kid's education, and I seriously doubt I'm the only one." Maybe I should've dressed better for this college fair; maybe I looked destitute -- the guy clearly thought I was lying.) 


redbird

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Re: Worst Financial Advice (You've heard).
« Reply #64 on: May 09, 2016, 04:06:02 PM »
I lived in Hawaii for 3 years for a job and co-workers of mine kept trying to tell me that I needed to buy a house. You're really looking at close to $1M for decent houses on Oahu. I knew I was only going to live there for 3 years. I didn't see how it was really worth the time and effort and cost to buy a house. But they insisted that I was losing money by not building equity for those 3 years.

Yet pretty much all of them who did buy had a higher mortgage than my monthly rent was and I didn't have to deal with maintenance (mold is a big problem in Hawaii) and I could move immediately with nothing left behind when I got a job off-island...

aspiringnomad

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Re: Worst Financial Advice (You've heard).
« Reply #65 on: May 09, 2016, 06:41:29 PM »
You should aim to spend your 20s accumulating debt, your 30s paying down that debt, and your 40s starting to accumulate wealth.

Some unmustachian advice from an older co-worker to 24-year old me. I remember thinking, wow that seems like a low bar, but what do I know?

DebtFreeBy25

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Re: Worst Financial Advice (You've heard).
« Reply #66 on: May 09, 2016, 09:08:00 PM »
Two huge lies were sold to my generation (80s babies):

1. "Going to college is a great investment." This claim is usually backed by some statistic stating how much more college graduates make than non-graduates. Nearly everyone was encouraged to go to a four year college regardless of interests, talent or ability to pay. No one really thought twice about student loan debt before the 2008 recession.

2. "Everyone has debt." The belief that it's possible to live debt-free is almost unheard of in the mainstream culture. Being debt-free including a home before the age of 40 strikes most people as impossible or elitist. The past few generations have been raised to accept debt as a way of life. True frugality went out of favor after the Depression. Meanwhile, it's shockingly common for a family to blow $100k every year and complain about how broke and overtaxed they are.

JAYSLOL

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Re: Worst Financial Advice (You've heard).
« Reply #67 on: May 09, 2016, 09:39:27 PM »
I don't know if it's the worst advice i've heard, but I have a colleague that keeps telling me I should buy a brand new car because with the 0% financing "it's free money".  No.  It.  Ain't.

Ann

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Re: Worst Financial Advice (You've heard).
« Reply #68 on: May 09, 2016, 11:02:18 PM »
"You should buy a new car soon because the trade-in value of your current one will keep going down"

 

Jappe

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Re: Worst Financial Advice (You've heard).
« Reply #69 on: May 10, 2016, 06:53:54 AM »
Probably not the worst one but still something that comes up almost every time when discussing savings:

"Why would you save money. If you have an accident at age 45 and die, the money won't help you. Use it now and start living"

-Okay but what if I DON'T die early and I live till I'm 85, then I'll never have any money?
- Also, why do people always assume I'm not living right now, actually I'm less worried than most people my age, having the time of my life, going on wonderful vacation trips, experiencing life and still saving up.
- Furthermore, I would have a very hard time deciding what to spend all my money on and feeling more happiness than I do now.
- And lastly, okay even if I die the money will go to those I love. No it won't bring me back but I'm pretty sure it will help them to realize some life-goals which they will link to me one way or another.

11ducks

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Re: Worst Financial Advice (You've heard).
« Reply #70 on: May 10, 2016, 07:03:34 AM »
https://m.youtube.com/watch?v=OP3xf6BFEIo

Treat yourself. The whole concept of 'you deserve nice things!' Or 'treat yourself' or 'princess for a day', it's almost always associated with money and decadence and buying crap you can't afford.
I treat myself with a long shower, a bushwalk, cooking a fave meal. I don't need a $900 bag
I can't afford. At work I constantly hear about the splurges, people in debt, who struggle to pay bills but feel justified in splurging to treat themselves, which in reality only makes their financial problems much worse overall.

boarder42

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Re: Worst Financial Advice (You've heard).
« Reply #71 on: May 10, 2016, 07:19:55 AM »
Probably not the worst one but still something that comes up almost every time when discussing savings:

"Why would you save money. If you have an accident at age 45 and die, the money won't help you. Use it now and start living"

-Okay but what if I DON'T die early and I live till I'm 85, then I'll never have any money?
- Also, why do people always assume I'm not living right now, actually I'm less worried than most people my age, having the time of my life, going on wonderful vacation trips, experiencing life and still saving up.
- Furthermore, I would have a very hard time deciding what to spend all my money on and feeling more happiness than I do now.
- And lastly, okay even if I die the money will go to those I love. No it won't bring me back but I'm pretty sure it will help them to realize some life-goals which they will link to me one way or another.

forgot about this one.  its one of the most annoying things i ever hear.  I'm pretty vocal about finances and where i'm at and what my goals are with everyone i meet.  And it never fails for someone to bring that up. 

iris lily

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Re: Worst Financial Advice (You've heard).
« Reply #72 on: May 10, 2016, 10:34:25 AM »
....

2. Mortgages are good for the interest write off! 

No one who ever owned a home went and mortgaged it so they could get the interest write off.  Why pay the bank 20 grand a year in interest just so you can save $750 from Uncle Sam!...



Uh, yes they do.

Our friends bought a house with a mortgage of $100,000 in the late 1980's.

Now, they owe $152,000 on their mortgage and are 65 years old, still punching a time clock.

But hey, that mortgage deduction iis such a good deal.

(Op,
I agree with you vut just want you to know that there is a lot of stupid out in the world.)

infogoon

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Re: Worst Financial Advice (You've heard).
« Reply #73 on: May 10, 2016, 10:38:52 AM »
"You should buy a more expensive house so you can write off the mortgage interest!"

I paid an effective federal income  tax rate of 1.5% last year. I'm not interested in giving a bunch of money to the bank for no good reason.

ysette9

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Re: Worst Financial Advice (You've heard).
« Reply #74 on: May 10, 2016, 01:06:56 PM »
Quote
2014 Dodge Challenger Fancypants Big Penis Edition

Sorry, but I need to correct your typo there. It should read: 2014 Dodge Challenger Fancypants Little Penis Edition

An old high school friend always called the big, jacked-up trucks "little penis trucks". I think the name is still appropriate.

VaCPA

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Re: Worst Financial Advice (You've heard).
« Reply #75 on: May 10, 2016, 01:21:53 PM »
"You should buy a new car soon because the trade-in value of your current one will keep going down"

Good one. Carmax did tell me something interesting when I sold my car to them though. I sold it to them in January and actually got more than I expected. I guess I made a comment to that effect and he said they typically offer more $ for cars in January, because they're beefing up their inventory for tax refund season when car sales go way up.

BlueHouse

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Re: Worst Financial Advice (You've heard).
« Reply #76 on: May 10, 2016, 01:50:01 PM »
Anything with the words:
1.  "Good debt" or "bad debt"
2.  "Disposable" income. 
3.  "Starter" as in house, car, or marriage.  Hate it!
4.  "This is an investment!"  (referring to clothing, car, purses, jewelry, a haircut or anything that does not bring money directly back to the spender)

zephyr911

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Re: Worst Financial Advice (You've heard).
« Reply #77 on: May 10, 2016, 02:03:37 PM »
....

2. Mortgages are good for the interest write off! 

No one who ever owned a home went and mortgaged it so they could get the interest write off.  Why pay the bank 20 grand a year in interest just so you can save $750 from Uncle Sam!...



Uh, yes they do.

Our friends bought a house with a mortgage of $100,000 in the late 1980's.

Now, they owe $152,000 on their mortgage and are 65 years old, still punching a time clock.

But hey, that mortgage deduction iis such a good deal.

(Op,
I agree with you vut just want you to know that there is a lot of stupid out in the world.)
You sure they didn't just cash out equity to spend it on dumb shit? I can't imagine it was their primary reason... maybe an excuse to rationalize it.

ketchup

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Re: Worst Financial Advice (You've heard).
« Reply #78 on: May 10, 2016, 02:35:47 PM »
4.  "This is an investment!"  (referring to clothing, car, purses, jewelry, a haircut or anything that does not bring money directly back to the spender)
Ugh, yes!  That one drives me nuts.  I have a specific friend that uses "This is an investment." as code for "This is a reasonable purchase of something that will last a long time and be legitimately useful."  She's usually spot-on by that definition (she's not talking about pissing away money on stupid shit), but it still makes me crazy.

iris lily

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Re: Worst Financial Advice (You've heard).
« Reply #79 on: May 10, 2016, 02:45:32 PM »
....

2. Mortgages are good for the interest write off! 

No one who ever owned a home went and mortgaged it so they could get the interest write off.  Why pay the bank 20 grand a year in interest just so you can save $750 from Uncle Sam!...



Uh, yes they do.

Our friends bought a house with a mortgage of $100,000 in the late 1980's.

Now, they owe $152,000 on their mortgage and are 65 years old, still punching a time clock.

But hey, that mortgage deduction iis such a good deal.

(Op,
I agree with you vut just want you to know that there is a lot of stupid out in the world.)
You sure they didn't just cash out equity to spend it on dumb shit? I can't imagine it was their primary reason... maybe an excuse to rationalize it.
Well yea, you are right, they used their house as a credit card to buy stupid shit. The talked about the mortgage deduction.

Random Hangers

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Re: Worst Financial Advice (You've heard).
« Reply #80 on: May 10, 2016, 02:47:04 PM »
Perhaps not the worst, but it keeps popping up during our house hunt:

Person: What are you looking for in a house?
Me: Names general area, # of bedrooms, etc.
Person: What about a pool?
Me: Nah, we'd never use it [I'm a lap swimmer; I never know what to do with myself in a non-lap pool].
Person: That's ok. It's soooo good for resale value.
Me: But it's expensive to maintain. And even if my husband does the monthly stuff, there's still upkeep, plus I think your insurance goes up?
Person: You just hire a guy to do it. It's like, $100, $125 extra per month, that's it!
Me: But we'd *never* use it. We'd *literally* just be paying the guy to clean something we don't use.
Person: That's ok! Think of the resale!

I've now had this conversation with two or three unrelated people. We don't want a pool, all right? We're hoping to live in our next lace for 15+ years, so how much is it really going to help with a future sale? Even if we *only* had to pay the pool person and none of the other stuff, that's $18k! ($100/month x 12 months x 15 years minimum) Good grief, people.

clarkfan1979

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Re: Worst Financial Advice (You've heard).
« Reply #81 on: May 10, 2016, 04:54:44 PM »
My wife and I waited 2 years to save up enough money to pay for our wedding in cash, which was about $12,000 for 96 guests. Many people were amazed that we were willing to wait that long. One person said that we could get married a year sooner if we just charged the $6,000 to our credit card.

ysette9

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Re: Worst Financial Advice (You've heard).
« Reply #82 on: May 10, 2016, 04:56:29 PM »
That is funny because I was literally having the pool conversation a couple of days back with some coworkers. One specifically said it was an important selling point and she wouldn't buy a house without a pool because they use it so much. The rest of us fell somewhere in the spectrum of "eh, I can take it or leave it" to (me) "if a house has a pool then they need to discount the price because I will have to pay to have it removed". I imagine this changes depending on where in the country you live.

JAYSLOL

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Re: Worst Financial Advice (You've heard).
« Reply #83 on: May 10, 2016, 07:15:47 PM »
Anytime i hear an ad that says something along the lines of...

"Take out a personal loan of up to $10,000 today and start re-building your credit!"

"Bad credit? No credit? No problem! Get the vehicle you want TODAY with $0 down!"

I just fill with rage every time i hear shit like this.

ender

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Re: Worst Financial Advice (You've heard).
« Reply #84 on: May 10, 2016, 07:27:06 PM »
Any of the investment crap that is on the radio is pretty bad.

Gold has some ridiculously misleading ones. But there are many others, such as guaranteeing 12% returns and blatant fear mongering about the is the stock market going up? or down?! you better invest with us!

Goldielocks

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Re: Worst Financial Advice (You've heard).
« Reply #85 on: May 10, 2016, 08:32:03 PM »
"You should buy a more expensive house so you can write off the mortgage interest!"

I paid an effective federal income  tax rate of 1.5% last year. I'm not interested in giving a bunch of money to the bank for no good reason.

Ugh.

In the US, those bigger, fancier more expensive houses come with much higher property taxes and maintenance / Utilities too.      The deductions sometimes barely pays for the increased property tax....  (California and other prop tax states)

cheapbarb

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Re: Worst Financial Advice (You've heard).
« Reply #86 on: May 10, 2016, 09:52:27 PM »
The worst advice I've ever heard was "debt is just part of life. Everyone has it.".  This comes from someone who is financially *bleeped* but doesn't want to face it.

Second worst was from a financial advisor who told me to just ignore the 6 percent load on the mutual fund he wanted to sell me.

Goldielocks

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Re: Worst Financial Advice (You've heard).
« Reply #87 on: May 10, 2016, 10:09:01 PM »
As 20-somethings, who had just bought a home a year before...our first (otherwise best) financial planner gave us this book to read...

Garth Turner -- The Strategy (early 1998 version) 
(Borrowing against your property to invest)
http://www.abebooks.com/Garth-Turner-Strategy-Homeowners-Guide-Wealth/17664566574/bd


Yikes....   Even though today, I do keep my "Mortgage prepayments" invested, for improved returns versus our teeny tiny mortgage interest, I could not condone giving this advice to a young couple with barely 22% equity and 6.5% mortgage interest rates borrowing against their property to invest in the stock market...

JustTrying

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Re: Worst Financial Advice (You've heard).
« Reply #88 on: May 10, 2016, 11:30:15 PM »
Realtor: "It's only $50 more per month!" Um, with a 30 year mortgage with interest, that $50 is pretty significant.

Car Dealer (trying to sell me a car that costs more than the $10,000 cash I had to offer): "You'll put $2,000 down and then you can keep the rest of the money in your pocket!" Huh???

My husband: "The best investment is gold." I actually think he still believes this, but he's decided to just follow my recommendations rather than go for this wonderful investment idea that he has!

Co-worker: "Hiring a house cleaner is a great investment!"

csprof

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Re: Worst Financial Advice (You've heard).
« Reply #89 on: May 10, 2016, 11:34:02 PM »
This one I think I did hear but disregarded: "Go to the best/most prestigious school you can get into." While I think it can totally make sense to bend over backward to attend a truly elite institution (e.g. Ivy, MIT), particularly when the price premium isn't extremely large (say, $5k/year, maybe $10k, but not $50k), I do believe below that point the rankings break down in utility and the education and name recognition you'd get from a given institution is mostly the same as the next one on the list. Once you get below that super-prestige level, it's time to consider value. On the flip side of this, some of the best advice I got was to not evaluate the cost of attending a particular school until after fin aid offers came back. The state school was NOT the cheapest for me (I got a merit scholarship elsewhere) so it saddens me when parents seem to be discouraging their kids from even *applying* elsewhere; maybe it's not common but you could be missing out on a good deal.

There was a recent economist article on this subject - methodology was questionable, but there's probably a grain of truth among it:

http://www.economist.com/news/united-states/21646220-it-depends-what-you-study-not-where

"Engineers and computer scientists do best, earning an impressive 20-year annualised return of 12% on their college fees (the S&P 500 yielded just 7.8%). Engineering graduates from run-of-the-mill colleges do only slightly worse than those from highly selective ones."

But what's interesting is that couched that way, going to a better school could be viewed as letting you invest more at a high rate of return.  If you've got the $200k to toss around, going to <name-brand-school-here> (I won't be crass enough to pimp my own department, as tempting as it is) could be a solid choice, because it lets you put $200k in at 12%, vs going to local-state-school and only "getting" to invest 60k at 12%.

That said, I'm personally with you.  I think it's far more important to find a field where you come closer to hitting the holy trinity of employment (something people want to pay for, something you enjoy, something that adds value to the world) than to go to the most expensive machine in the hospital -- er, sorry, the most expensive college around.

For the grad school-bound, there's also the reality that where you do your Ph.D. makes a much bigger difference than where you did your undergrad, and in the engineering fields, at least, the Ph.D. is a "paid" position, as long as you disregard all the money you're not making by going to work immediately. :)  Going to a top school is useful for getting into a Ph.D. program, but a star student from a state school is very likely to do well.

(I won't disagree about the super-prestige level, either, at least in STEM.  It opens a lot of doors - and the fin aid packages are often pretty decent.)

GuitarStv

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Re: Worst Financial Advice (You've heard).
« Reply #90 on: May 11, 2016, 06:50:00 AM »
Perhaps not the worst, but it keeps popping up during our house hunt:

Person: What are you looking for in a house?
Me: Names general area, # of bedrooms, etc.
Person: What about a pool?
Me: Nah, we'd never use it [I'm a lap swimmer; I never know what to do with myself in a non-lap pool].
Person: That's ok. It's soooo good for resale value.
Me: But it's expensive to maintain. And even if my husband does the monthly stuff, there's still upkeep, plus I think your insurance goes up?
Person: You just hire a guy to do it. It's like, $100, $125 extra per month, that's it!
Me: But we'd *never* use it. We'd *literally* just be paying the guy to clean something we don't use.
Person: That's ok! Think of the resale!

I've now had this conversation with two or three unrelated people. We don't want a pool, all right? We're hoping to live in our next lace for 15+ years, so how much is it really going to help with a future sale? Even if we *only* had to pay the pool person and none of the other stuff, that's $18k! ($100/month x 12 months x 15 years minimum) Good grief, people.

Huh.  Must be your location.

Here in Toronto having a pool is considered a negative when selling your house.  You can only use it for 2-3 months a year at best, it's a big PITA to maintain, and you have to pay astonishing amounts of money to remove them.  :P

dz1087

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Re: Worst Financial Advice (You've heard).
« Reply #91 on: May 11, 2016, 07:03:44 AM »

Co-worker: "Hiring a house cleaner is a great investment!"

I agree with this 100%.

My wife cleans houses and people paying her to do what she likes is definitely a great investment!

VaCPA

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Re: Worst Financial Advice (You've heard).
« Reply #92 on: May 11, 2016, 07:06:59 AM »

Co-worker: "Hiring a house cleaner is a great investment!"

I agree with this 100%.

My wife cleans houses and people paying her to do what she likes is definitely a great investment!

I actually think it is a great investment...in your marriage. Since I finally gave in and allowed us to get a maid service my wife is much less stressed and snappy. The expression goes happy wife, happy..something or other

ReadySetMillionaire

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Re: Worst Financial Advice (You've heard).
« Reply #93 on: May 11, 2016, 07:30:34 AM »

Co-worker: "Hiring a house cleaner is a great investment!"

I agree with this 100%.

My wife cleans houses and people paying her to do what she likes is definitely a great investment!

I actually think it is a great investment...in your marriage. Since I finally gave in and allowed us to get a maid service my wife is much less stressed and snappy. The expression goes happy wife, happy..something or other

Agree with this. A lot of mustachians lose sight of the big picture and forget the value of time, which to me, is more valuable than money.

*ETA: I disagree with the word "investment" to describe a service like a housekeeper. But there are things that are worth the money.
« Last Edit: May 11, 2016, 08:10:42 AM by ReadySetMillionaire »

ketchup

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Re: Worst Financial Advice (You've heard).
« Reply #94 on: May 11, 2016, 07:53:40 AM »
Co-worker: "Hiring a house cleaner is a great investment!"

GuitarStv

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Re: Worst Financial Advice (You've heard).
« Reply #95 on: May 11, 2016, 08:16:25 AM »

Co-worker: "Hiring a house cleaner is a great investment!"

I agree with this 100%.

My wife cleans houses and people paying her to do what she likes is definitely a great investment!

I actually think it is a great investment...in your marriage. Since I finally gave in and allowed us to get a maid service my wife is much less stressed and snappy. The expression goes happy wife, happy..something or other

Couldn't you just do a few more chores and some cleaning around the house so that your wife is less stressed and snappy?

VaCPA

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Re: Worst Financial Advice (You've heard).
« Reply #96 on: May 11, 2016, 09:13:08 AM »

Co-worker: "Hiring a house cleaner is a great investment!"

I agree with this 100%.

My wife cleans houses and people paying her to do what she likes is definitely a great investment!

I actually think it is a great investment...in your marriage. Since I finally gave in and allowed us to get a maid service my wife is much less stressed and snappy. The expression goes happy wife, happy..something or other

Couldn't you just do a few more chores and some cleaning around the house so that your wife is less stressed and snappy?

Sure I could. But between my job and the kids, and the few moments I get to actually do something for myself it's money well spent as far as I'm concerned. Like the previous guy said, time = money. Everyone just has to decide how much their time is worth and what things in their life they want to hire out.

Inaya

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Re: Worst Financial Advice (You've heard).
« Reply #97 on: May 11, 2016, 09:32:35 AM »
Two huge lies were sold to my generation (80s babies):

1. "Going to college is a great investment." This claim is usually backed by some statistic stating how much more college graduates make than non-graduates. Nearly everyone was encouraged to go to a four year college regardless of interests, talent or ability to pay. No one really thought twice about student loan debt before the 2008 recession.

"Go to college if you don't want to work in fast food your entire life."

Then, once you have your degree and can't get a job in your field, "What, you think you're too good to work in fast food now that you have a degree?"

mozar

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Re: Worst Financial Advice (You've heard).
« Reply #98 on: May 11, 2016, 09:43:27 AM »

Quote
Sure I could. But between my job and the kids, and the few moments I get to actually do something for myself it's money well spent as far as I'm concerned. Like the previous guy said, time = money. Everyone just has to decide how much their time is worth and what things in their life they want to hire out.
Because this is the mustachian forum, I see this as a complainy pants excuse. I bet you can take time to do more chores. You can also do chores with kids or teach them how to do chores on their own (unless they're under 2). Right now you are teaching them that a household runs by magic, and its better to throw money at a problem than make small sacrifices for the good of the family.

VaCPA

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Re: Worst Financial Advice (You've heard).
« Reply #99 on: May 11, 2016, 09:51:36 AM »

Quote
Sure I could. But between my job and the kids, and the few moments I get to actually do something for myself it's money well spent as far as I'm concerned. Like the previous guy said, time = money. Everyone just has to decide how much their time is worth and what things in their life they want to hire out.
Because this is the mustachian forum, I see this as a complainy pants excuse. I bet you can take time to do more chores. You can also do chores with kids or teach them how to do chores on their own (unless they're under 2). Right now you are teaching them that a household runs by magic, and its better to throw money at a problem than make small sacrifices for the good of the family.

Not sure if serious....