On the internet, anyone can promote themselves as an “expert” in any given field. So-called expert advice published on a random website or blog can quickly go viral — and it’s not always accurate or helpful.
This is especially true for financial advice. While you might be eager to believe someone’s unsolicited insight because of how high it ranks in your Google search results, managing your finances based on such input can often cause more harm than good.
Below, members of Forbes Finance Council share popular financial advice that you should think twice about following — no matter how many times or on how many sites you’ve read about it.
Members share the most common financial advice you should ignore.All photos courtesy of Forbes Councils members.
1. ‘Focus On Your Current Financial Needs’
Most individuals live more for today versus for the goals of tomorrow. Start by writing down your one-, five- and 10-year financial goals and find out how to save (or pay off debt) toward your goals. They should be tangible goals with deadlines. (If not, you will have no self-accountability.) Only after that, determine whether you can afford what you “want” versus what you “need” today. – Scott Bishop, STA Wealth Management
2. ‘Investment Deck Numbers Tell You All You Need To Know’
I review many investment decks every month and feel a lot of the numbers are overinflated. People get emotionally attached to a project and think it’s going to be a unicorn and therefore create returns of 100 times, which is total nonsense. When evaluating investments, think clearly and objectively in order to come to a sound conclusion. – Khurram Chohan, Virtual CFO Group
3. ‘Buy And Hold’
Rallies and crashes have always happened throughout the years and will continue to happen. The old adage of “buy and hold” is simply inefficient. The industry would argue over the long haul you will be up, and I do not disagree; however, you leave an exorbitant amount of money on the table following this advice. – Shane Hurley, RedFynn Technologies
4. ‘Buying Your Own Home Is Better Than Renting’
Buying your own home isn’t the best advice for everyone. Younger investors in their 20s and 30s aren’t always in a financial position to handle the costs of maintaining a home and can often do better by renting something they can afford while keeping their options open. A great job could come along in another city while the housing market is in a slump, and then you are stuck. – Danielle Kunkle Roberts, Boomer Benefits
5. ‘Use Your Retirement Funds To Buy Real Estate Or Start A Business’
Any advice that becomes isolated and not holistic is often not sound. For example, I recently read an article suggesting people should cash in their retirement accounts to buy real estate. This is extremely dangerous. Far too many people who do not understand the tax ramifications, time-value of money or even real estate market trends are giving advice not holistic or focused on long-term goals. – Justin Goodbread, Heritage Investors
6. ‘Work Conferences Are A Waste of Money’
This piece of advice may apply more to business owners, but I’ve heard it enough to take issue with it. My business partner and I devote considerable time and money to attending digital business conferences worldwide. Some of our most valuable (and lucrative) connections have come through this channel. In the long-term, attending the right conferences can pay off handsomely for your business. – Ismael Wrixen, FE International
7. ‘Head To College Immediately’
One of the worst pieces of advice is that everyone needs to go to college right away. While it is hard to get a job without a degree, so many people are building up college debt without a well-paying job to pay it back. The best advice would be to weigh your options; look at different schools, research the job market and select a path that results in less debt. – Greg Herlean, Horizon Trust
8. ‘You Can Just Google It’
My advice is pretty simple when it comes to financial advice. Besides doing your own research, seek out someone who’s certified to advise you when it comes to your finances. There are people who try to learn as they go and get themselves into debt because they thought they could just “Google” it rather than pay a professional to steer them in the right direction. – David Gokhshtein, David Gokhshtein Inc
9. ‘Financial Advice Is One-Size-Fits-All’
There is no shortage of financial advice from all sides of the spectrum. I feel it’s best to absorb as much info as you can and then apply it how you feel would best suit your own circumstances. For example, take renting versus buying real estate: There are many benefits to buying, but what if the market is on a downtrend and buying now might cost you substantial equity in the future? – Jared Weitz, United Capital Source Inc.