The Worst Financial Advice I Have Ever Received

worst financial adviceWe’ve all received it.

Advice given to us that’s supposed to change our lives for the better.

It’s always given with good intent.

Even good intent though, doesn’t always make it good advice.

Both my parents weren’t the best at managing their money.

Despite their struggles, they still felt compelled to pass along the best advice they could.

The Advice

Both my parents insisted that when I start to make money that…..drum roll please…..

You need to save.

How many times have your parents told you that you need to save and they think that they’re giving you the best advice ever?

That they had given you the golden keys to life and now that you can go the rest of your life and have complete financial control.

As we know, that’s bunch of crap.

My parents telling me that “I need to save” is like me telling a college graduate that they need to get a good job.  Uhhhhh…..yeah, think?

Great, thanks for the info mom and dad.  Thanks for enlightening me with your infinite wisdom. I hope you’re catching the sarcasm here.

Yes, I know I need to do something with my life and I know I need to save. But, why don’t you show me how?

The thing is though that my parents never did.   They never showed me specifically how to do it.  How to really save. 

They gave me the same hollow advice that many other parents do.   Because of that I stumbled into my earlier twenties figuring out what it is I actually needed to do.  The right way to save.

More Bad Advice

At first, it wasn’t pretty.  The second piece of bad financial advice I got was directly from my father.

He had suggested that I open a credit card.   You’re probably thinking that he suggested it so that I could build my credit in preparation for my financial future.

Not quite.

He suggested I do it so that I could buy stuff.   And no that’s not a joke.

I started down a path of racking up debt and NOT saving for my financial future.

By the grace of God, I became a financial advisor and I learned on my own.  I was one of the lucky ones.

Most people aren’t so lucky. They don’t realize until they are in their late 40′s (or later) how they need to save.

How to Really Make a Difference

If you’re in a situation where it’s your turn to give advice, whether to be family or friends, don’t do what my parents did.

Make the advice specific.

I wish my dad would have shown me the way on how to invest.  Even though he didn’t know the ins and outs of it, we could have learned together.

That’s something that I’ve committed to myself in teaching my kids.   It’s not just “giving advice”.  It’s about teaching them, nurturing them and making they sure they understand the path you’ve laid out before them.

That’s how you give good financial advice.

What’s the worst piece of financial advice you’ve received?   How were you able to overcome it?

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Comments | 7 Responses

  1. says

    I feel general advice is given when someone doesn’t understand something or someone is trying to get another person to think through options. The worst advice is have gotten is no advice. My parents must have thought I had it figured out because I didn’t get much advice from them. Luckily I read PF blogs and had a general idea how to stay out of trouble.

  2. Adam says

    I strongly agree with this article. The best personal finance advise is specific. Saying things like earn more than you save, while well intentioned, does not really show people how they can accomplish this.

  3. Sun says

    I think the worst financial advice I’ve heard was to get life insurance for my children. My father and mother, unfortunately, fell for this and have been paying for this all their lives until I asked them to cancel my policy. My brother’s policy is next.

  4. Robyn says

    The worst advice I received was from my brother when I started college. He was a senior in college at the time and he was helping me figure out how much I would need for school loans. He told me to take as many loans as possible and not to worry because the interest rates were low (at the time). I thought this was crazy – it was like he thought he didn’t have to pay them back once he graduated. I thought to myself – “Are we really related?!” :) Needless to say, I didn’t take out every loan possible and I graduated with less debt than my brother. He denies ever giving such bad advice. :)

  5. Mike says

    My father graduated top of class at Texas A&M 1959. Hired by Nasa he developed the fuel cell for the Gemini capsule. Knew all the astronauts and was hired by Eastern Airlines in 1966 with only 194 hours of experience. Smart in many ways and an immaculate record-keeper, he has no understanding of money or investing. His advice to me was “get a good job with a pension, save some money.” That’s it. Well, all those years later he lost his first pension and then his second at another airline that went bankrupt. At 79 I am paying him a fixed income monthly as he is nearly destitute. A good friend of his that started at Eastern the same time did not sign up for the pension plan. Instead he started putting money in a small Fidelity fund called Magellan. You can guess that he did very well. Parents, if you don’t know then please don’t give advice! Please ask someone who knows!

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