The festive season has just been over and the new year has begun. It’s time to begin everything fresh. It’s time to read lots of articles on financial tips, advice, planning, checklist, to-dos, etc. It’s the season.
You browse a few websites and suddenly you start getting loads of advice on what kind of job you should do, what type of investment you should make, and the type of credit cards you must apply for. The advice you get from the articles in not bad. But remember that advice is not applicable to everybody. For instance, you get an advice that 2017 is a great year for accounting jobs. But, you don’t have an expertise in accounting. So, these jobs won’t be suitable for you. Right?
Beware of bad money advice
Please don’t take all the advice you get from the articles to your heart. If you make a financial decision based on the fruitless advice you get from articles, then you’ll very soon empty your bank account.
Check out the 3 money advice that you may not follow.
1 Buying a home when you want to set up a business
Do you live in a rental home? If so, then you’ll meet lots of friends who would advise you to buy a new home. True, that rent is a waste of money. But, when you’re planning to set up a business, you’ll need a lot of capital. When you stay in a rental apartment and share it with someone, you probably have to pay only $300 a month. But when you buy a home, your expenses will be a lot more. You have to spend more for maintaining the house and making the down payment. You won’t have money to set up your business.
Instead of blindly following any advice, do your research. Calculate how much you need to pay for a rental apartment, for buying a house or for settling up a business. Compare the cost and then make a decision.
2 Stay away from credit cards as you’ll be in debt
You can stay away from credit cards when you can’t control impulse purchases or buy more than what you can afford. Otherwise, it would be wrong to just blame credit cards. If you pay on time, then credit cards can help you build credit. Plus, credit cards offer reward programs. You can take advantage of that. Some credit cards offer fraud protection and car rental insurance. You can use them as per your needs.
3 You should always listen to your stockbroker
Never underestimate yourself. Surely, a stockbroker knows a lot more about the dynamics of a stock market. But this doesn’t mean that you should act upon his/her advice blindly. If your instinct says something isn’t right, then don’t buy or sell a stock just because the broker said so.
My best friend used to trade in the stock market frequently 5 years back. He was working with a stockbroker and was extremely happy since he made some quick profits following his broker’s advice.
After a few weeks, he bought the stocks of a dying company. I asked him if it was a rational decision. But he went ahead. His broker had asked him to buy stocks of that company and he did it.
The price of the stock plummeted after a few days. The broker told him to chill. He was confident that eventually, the price of the stock would increase. But, it didn’t happen and ultimately my best friend had to sell those stocks and incur a huge loss.
The bottom line
Never follow money advice blindly. You’ll meet friends and family and they’ll give advice on money, relationship, career, health and so on. Analyze your situation carefully and then decide if you should act as per your friend’s advice. I’m not saying that your friend’s advice is wrong or he/she has a bad motive. All I’m saying is that his/her advice may not be the best suited for your situation. So, act wisely.