Financial advice is all around us. We get it from relatives, friends, social media, pundits, and talking heads on traditional media, and many other places. Some of it may be good, much of it – especially if it’s not based on a thorough knowledge of your finances – probably isn’t. But what’s the worst financial advice you’ve ever received?

We asked a mixed group of people, ranging from financial professionals to business people to ordinary folks, what the worst financial advice they ever received was. Some of the responses may be familiar: bad advice has a way of coming back!

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What They Said

As usual, some items appeared more than once. We tried to avoid duplication in the responses, but here are some of the subjects that were most often discussed.

  • Investment: several responses said the worst advice they got was to avoid investing because of risk. Several others said their worst advice encouraged risky investments.
  • Credit cards: Some respondents were advised to avoid credit cards completely, others were encouraged to use them and even to carry a balance on them.
  • Retirement: several responses stated that the worst advice they got was to put off retirement saving until they were older.
  • Cars: some responses said the advice to buy a new car was the worst they got, citing rapid depreciation. Others said that they were advised to buy a used car, and were buried in repair bills.

These responses may be inconsistent, but that doesn’t mean they’re wrong. The differences show us two things.

  • Extreme advice is often bad. “Avoid investing completely” and “make risky investments” can both be bad advice for people who are better off in the middle.
  • Good advice for one person can be bad for another. For a disciplined, responsible individual “avoid credit cards” could be bad advice. For a shopping addict, “use credit cards” could be equally bad advice.

Some advice is just bad. Telling someone that making only minimum payments on their credit cards will help their credit is wrong and expensive.

More often, though, advice is bad because it doesn’t suit a person’s needs and situations. Whenever you get advice, recognize that even if the person giving it is knowledgeable, they may not know your situation and your needs.

Let’s look at the worst financial advice that our panel received.

What’s the Worst Financial Advice You’ve Ever Gotten?

Here’s what our panel had to say.

Dr. Dan Pallesen

Dr. Dan Pallesen
Chief of Financial Behavior, Financial Adviser
Keystone Wealth Partners

“Any Retirement Plan Will Do”

The worst piece of financial advice I’ve ever received was when I started my first job after graduate school. I got a job as a psychologist in a federal prison. I was led to believe that as long as I was contributing to a retirement account, that was enough.

With this in mind, I selected the default retirement option. The problem was that the default option was the most conservative fund and I was in my late 20s. I didn’t know any better and stayed invested in that conservative fund for about 7 years. Had I known that it makes more sense for a 20-to-30-something to be invested more aggressively, I would have.

I have since run a time value of money calculation to see how much money I lost assuming I will work until my mid-60s and I lost over $500,000 from that seemingly small mistake!

Dr. Dan Pallesen is a financial psychologist and he is passionate about helping others live their best lives. He is a licensed clinical psychologist and financial advisor whose focus is in the field of Positive Psychology and Behavioral Finance. Dr. Dan’s approach with people is to focus on strengths and bring clarity to the issues of purpose and meaning in their lives. He has worked in many settings including counseling centers, private practice, military clinics, and even federal prisons. Dr. Dan currently serves as the Chief of Investor Behavior at Keystone Wealth Partners. He also hosts a weekly podcast, The Behavioral Wealth Podcast where he discusses the behaviors people use to tap into their ability to achieve wealth, health, and happiness.

Lyle Solomon

Lyle Solomon
Principal Attorney
Oak View Law Group

“Use a Payday Loan”

The worst financial advice I have ever received is to borrow a payday loan to cover short-term expenses because they are easily available and do not require a credit check.

Several years ago, I was going through financial problems, and to make things worse, my car broke down. I did not have the money to pay for the repair. One of my clients suggested that I borrow a payday loan.

I was tempted. Payday loans are credited into the bank account within 24 hours.

I took the bait, applied for the payday loan, and received the money. I repaired my car within a few days, but my financial situation became worse.

Payday loan interest rates are very high. The APR on my payday loan was around 350%. Each month I paid a hefty interest on the loan, but it was never enough. Payday loan companies keep charging you until your bank account gets depleted, and you are imposed overdraft fees. They take automatic authorization from borrowers at the time of issuing the loan and then start debiting money from their bank account every fortnight. That’s the biggest problem.

Even after several negotiations with the payday loan company, It took me several months to get out of debt. So I had to cancel the ACH authorization and settle the debt.

Lyle Solomon has significant expertise in legal research and writing with extensive litigation experience. He has been licensed with the state bar of California since 2003. He graduated from the University of the Pacific, McGeorge School of Law, Sacramento, California, in 1998 and currently works in Rocklin, California.

Nick Bormann

Nick Bormann, Ph.D, CFPⓇ
Financial Planner and Investment Advisor
Bormann Wealth Management

“You Can Afford to Take Chances”

Granted the benefit of compound interest, the young should be especially careful about putting their savings to good use.

This bad advice has a kernel of truth because conventional wisdom is that early in life you might have more money in stocks or equity index funds and little or none in bonds, prioritizing investment growth over stability. However, regardless of age, everyone should keep in mind that not all risks are favorable ones. We wouldn’t advise a young person to play the lottery simply because they have time to recover from the loss; unfortunately, there are many investments out there that act like more complex versions of lottery tickets. Many longshots are not good bets!

A young investor might be able to tolerate higher volatility if they won’t need to spend their nest egg soon. However, being thoughtful about investment choices may let them benefit from a lifetime of compounded returns, instead of taking a short, wild ride back to square one.

Nick Bormann grew up in Spokane, WA, and completed a B.S. in Economics at Gonzaga University, and then M.A. and Ph.D. degrees in Economics at George Mason University. His doctoral dissertation studied corporate strategies for managing risks from financial regulation, and that same focus extends into his current practice, helping to manage both the risks and opportunities life can throw at you.

Caleb Reed

Caleb Reed

“Make Only Minimum Payments”

The worst piece of financial advice I have ever received was when I was young and just started building my credit score.

Someone told me that I should only make minimum payments on my credit cards each month to build my score.

While making timely payments each month is super important to build your credit score, it’s way better to pay off your balances in full each month if you can. If you carry a balance on your credit cards, you will end up with high APR charges, which will only grow larger each month due to compound interest.

Paying off your balances in full each month will also have just as much of a positive impact on your score as simply making timely payments will, if not more.

Caleb Reed is a self-taught personal finance expert and founder of TheDollarBudget. My credit score is 787 and I’m also debt-free. I have been featured in media outlets like The Penny Hoarder, GoBankingRates,, Yahoo Finance, and more.

Chris Panteli

Chris Panteli

“Don’t Invest in Stocks”

Do not invest in stocks. I received this advice from my dad, and it caused me to stay away from the stock market for 15 years. That was a very costly mistake.

The stock market has averaged 12% per year since 1950, and the average investor has earned only 6% per year, after inflation. That’s a difference of 6% per year – 1% per month. Take 1% per month and compound it monthly at 12% per year, and your money will double in 12 months. That’s a million dollars in 15 years!

I don’t care what you do with your money, but if you aren’t investing in the stock market, you’re making a big mistake.

Chris Panteli is a small business owner, finance and investment expert, and founder of He has a Degree in Economics from the University of Liverpool and has been featured in The New York Times, Forbes, Go Banking Rates, and

Alex Mastin

Alex Mastin
CEO and Founder

“Get A Credit Card Early”

I hate to say it, but the worst financial advice I’ve ever received came from my mother. When I was 15, she told me to get a credit card and start building my credit history. It was smart advice — just not for me.

Tempting as it might be to see your first credit card as a ticket to an exciting life of buying what you want without having to save up for it, there’s a dark side: sky-high interest rates, late fees, and other charges that can put you in debt before you even know it. In fact, those who don’t need credit are best off getting one credit card at most and using it only when they can pay off their balance in full and on time every month.

Forget about shopping with a credit card until you’re 20 or 21 years old. While you need a Visa or MasterCard for certain things like renting an apartment and booking plane tickets, it’s smarter to get your feet wet with a no-fee debit card that limits how much you can spend (and thus how much damage you can do). Once you’re an adult, pick one or two types of debt — student loans or a mortgage, for example — and stick to them.

Alex Mastin is CEO and Founder of Homegrounds, a community of passionate coffee hobbyists, baristas, and travelers who research, test and share knowledge in the home barista market.

Todd Christensen

Todd Christensen
Education Manager
Debt Reduction Services, Inc.

“File For Bankruptcy”

My Roommate recommended that I file for bankruptcy.

I was a college student with a maxed-out credit card that had a $2,000 limit. I had missed several monthly payments and been hit with about $100 of late payment fees. I also owed $50 or so to my credit union for writing checks when I had insufficient funds in my account, and I had taken out a couple of payday loans.

Here’s where the bad advice comes in. My finance major roommate, rather than recommending some budget education or counseling, suggested I would probably have to file for bankruptcy. Fortunately, even though I admired and generally trusted my roommate’s opinions, I did not follow that advice. Bankruptcy should be the last resort for those struggling with debt, not the first.

I would have benefited from a free meeting with a credit counselor if, for no other reason, than to put together a personal budget.

Todd R. Christensen MIM, MA, is Education Manager at Money Fit by DRS, Inc, a nationwide nonprofit financial wellness and credit counseling agency. Todd develops educational programs and produces materials that teach personal financial skills and responsibilities to all ages. He’s facilitated nearly two thousand workshops since 2004 on the fundamentals of effective money management & based his book, Everyday Money for Everyday People, on the discussions, tips, stories, and ideas shared by the tens of thousands of individuals and couples in attendance.

Tana Williams

Tana Williams
Debt Free Forties

“It’s OK to Cosign a Loan”

The worst piece of financial advice I’ve ever received was from a friend. They suggested that it’s ok to cosign on someone’s loan to help them out. While I love my family and friends and would do anything to help them, it would have to be a dire situation for me to consider cosigning a loan.

The stress of someone you love potentially leaving you on the hook for paying back the loan wouldn’t be worth it. Also, if they default on the loan, it can ruin your credit. When your credit score drops, it will affect everything from getting hired for a new job to raising the cost of your insurance.

All of this doesn’t mean you can’t help your friends or family. I would much rather give them a monetary gift to keep than to co-mingle finances like that. Or, if I can’t financially help, find another way to support them and help them with their situation.

Tana Williams is a personal finance blogger at She has personally paid off over $27,000 in 17 months and been featured on various sites, including The College Investor, Bankrate,, Making Sense of Cents, and many more.

Mary Kate D'Souza

Mary Kate D’Souza
Chief Legal Officer

“You Don’t Need a Will if You’re Married”

As an attorney, I’ve heard all sorts of bad information that clients pick up from talking with their friends. One of the worst was when a client told me only because he was married he didn’t need a will, He assumed that everything would just go to his wife. Not having an updated estate plan, including a will, costs more money; emotional stress and can have unintended consequences. In this case, the wife would have received less than ten percent of his assets.

Mary Kate D’Souza is an attorney with over 20 years of experience in estate planning, elder law, and probate litigation. She has witnessed first-hand the emotional and financial devastation wrought on families by a failure to plan.

Roger Senpai

Roger Senpai

The Senpai Blog

“Don’t Invest in Stocks”

When I was younger and living in a lower-income neighborhood, I had many people tell me to not “play the stock markets.” To them, the stock market was like “gambling” and you’ll just lose your money if you try to put your money into it.

So for the longest time, I had it drilled in my head that investing in stocks was automatically a bad thing. But as I grew up, I realized how wrong that belief was. While it’s true that you could lose money while putting your money into stocks, it certainly isn’t like gambling because when you do your research, you can choose stocks that involve far less risk and reward than playing a game of slot machines at the casino. Ironically, not putting your money into any investment vehicle is losing money; that $20,000 in your regular savings account won’t be $20,000, 20 to 30 years now due to inflation.

So that was the worst financial advice I’ve ever got, and it took me a long time to change that fear and belief.

Roger Senpai has been a cosplayer and writer for over 10 years now. He has attended many conventions and worked with other cosplayers and photographers. So you can bet on The Senpai Blog, you’ll be getting the best cosplay content!

Scott Alan Turner

Scott Alan Turner, CFP®
Owner, Founder
Rock Star Financial

“Buy as Much House as the Bank Will Let You”

The worst piece of advice I ever got was from an old boss, who told me to buy as much house as the bank will let you. Well, it turns out the bank will let people borrow way more money than they can afford. Banks don’t factor in if new homeowners/borrowers like to eat or go on vacation.

I put 5% down on a home and had a massive debt hanging over my head. I ended up selling my car and buying a junker so I could put more money towards my mortgage payment.

Scott Alan Turner, CFP® is a former money moron who became a self-made millionaire at age 35. Now he helps families and DIY investors get clarity and confidence on how to achieve financial independence and retire early.

Jacqueline Gilchrist

Jacqueline Gilchrist
Mom Money Map

“Only Use Cash, Not Credit Cards”

The worst financial advice I’ve ever received is that you should only use cash and not use credit cards to pay your bills.

I think this is bad financial advice because it depends on how you use credit cards.

If you don’t pay off your credit cards fully and on time, you shouldn’t be using credit cards. You could damage your credit and get into major debt as credit cards have high interest payments. If you do pay off your credit cards regularly, using credit cards can be very beneficial. Depending on the credit card, you could get cash or rewards. You could get hundreds of dollars worth of bonuses just for signing up.

Jacqueline Gilchrist is the founder of Mom Money Map, a resource treasuring time and money. She uses her MBA, BComm, and corporate strategic planning experience to help people manage their finances so they can achieve their financial goals.

Christina Russo

Christina Russo
Creative Director
The Kitchen Community

“Don’t Hire a Web Designer”

When Cassie, the Managing Director, and my business partner first came up with the idea of The Kitchen Community and asked me to join her, I told her something that a friend had told me a couple of weeks previously. And that was, if you’re ever going to build a website don’t hire a web designer, you can do it yourself for a tenth of what they’d charge you to do it.

On paper that seemed like good advice, but in the real world when we launched our barely designed site that wasn’t optimized correctly, we barely pulled in any traffic for the first four months. We realized that what we’d “saved” monetarily, we’d lost in time and so hired a designer to redo the site and started to actually make some money, which meant that The Kitchen Community paid for itself, and its designer in the first month after it was relaunched. Don’t follow the same financial advice that I did, do things the right way and hire a professional. You’ll be glad you did, and after finally seeing the financial light, I know I am.

Christina Russo is the Creative Director of the Kitchen Community, a respected digital culinary hub that focuses on food, health, cooking, and wellness. A PR specialist with over a decade of experience in the industry, Christina has managed to combine both of the major loves of her life, cooking and media relations in her professional role as an indispensable part of the Kitchen Community team.

Sarah Jameson

Sarah Jameson
Marketing Director
Green Building Elements

“Buy New Cars”

Buy new cars because they’ll last longer.

A new car comes with a long warranty and is expected to last at least 100,000 miles — and typically much longer. You can drive a new automobile for a decade or more, which is many years longer than you can get from many old cars. Shouldn’t everyone just go out and get a new car? Several years ago, a neighbour of my parents gave me this piece of wisdom. The issue is that the majority of a car’s depreciation occurs during the first few years of ownership. Every four years, an automobile loses 50% of its worth, according to a good, very rough rule of thumb. Let’s say an automobile costs $25,000 brand new. That same car would cost you $12,500 in four years. It would cost you $6,250 after eight years. You’re barely over $3,000 after twelve years.

Here’s some sound advice: buy late-model used autos. You won’t receive nearly as long a lifespan as you would with a new automobile, but you’ll save so much money on the purchase that the shorter lifespan is more than compensated for.

Sarah Jameson holds an MBA in Digital Marketing Strategy from the University of Connecticut and a Bachelor’s Degree in Construction Management from Central Connecticut State University. Sarah is passionate about building a better tomorrow with green technologies and construction practices. 

Matt Weidle

Matt Weidle
Business Development Manager
Buyer’s Guide

“Renting is a Waste of Money”

When you pay rent, the money you pay just goes into the landlord’s pocket. Isn’t that a complete waste of money? Many people advised me to get a mortgage practically immediately after graduating from college in order to avoid wasting money on rent.

Why it’s incorrect: Homeowners “throw away” a lot of money as well. When you own a home, mortgage insurance, property taxes, homeowners insurance, homeowners association fees, and home and property upkeep charges all vanish into thin air. These expenses nearly always add up to substantially more than the rent for a comparable house.

Another issue is that a mortgage can be a delicate balance beam to navigate. A house is difficult to liquidate — you can’t just go to the bank and sell it and have cash in your hand right once — so if something goes wrong, you may be in a serious bind if you have a hefty mortgage. There is the possibility of an increase in the value of your home while you are a homeowner, but this will not compensate for the difference between your monthly costs in a rental and your monthly costs in a mortgage unless the housing market is absolutely hotter than fire or you have a very small mortgage compared to the value of the house.

Matt Weidle is Business Development Manager of Buyer’s Guide. At Buyer’s Guide, we are committed to bringing the best products and services to our audience and customers through our data-driven reviews.

Janet Patterson

Janet Patterson
VP of Marketing
Highway Title Loans

“Don’t Pay Your Phone Bill”

The worst piece of financial advice I ever received was from a friend. He told me that I didn’t really have to pay my phone bill at all. Instead, I should just move to another carrier and let the first company cut me off.

What this friend failed to mention are the bigger consequences of changing providers. Your phone bill can end up in collections. This severely damages one’s credit score. Additionally, doing things like opening accounts or renting an apartment can be difficult. You’ll even end up paying higher interest charges on any loans or credit that you use.

Switching phone providers is not financially damaging; it’s also very impractical. Can you imagine having to jump from one carrier to another almost every other month? It’s a huge hassle that no one should have to worry about.

Janet Patterson is a Loan and Finance Expert at Highway Title Loans. She has worked in the financial service industry for over a decade, with 7 years of experience in the title loan industry.

Cathy Mills

Cathy Mills
Director of Strategy
Net Influencer

“Follow Your Instincts”

This is definitely something that we’ve chatted about a number of times here at Net Influencer.

The worst financial advice I have ever received is “implement any financial strategy by going with your instinct, regardless of the market, trends, and customer feedback”. In any area of life, it is important to analyze the objectives, costs, advantages, and disadvantages of an idea. Following your instinct in many cases can help you, but in reality, there are many more elements that you must take into account for everything.

For this reason, it is important to listen to your instinct but also to take into account many other variables before making any financial decision.

Cathy Mills has led many dynamic teams that aim to achieve business objectives through creative and effective strategies. In addition to Marketing Strategy and Sales, she has experience with Human Resources, eCommerce, and Mental Health.

Chara Yadav

Chara Yadav
Press Director

“Never Buy a New Car”

When I was nineteen years old my uncle told me that you should never buy a new car, as second-hand cars were just as good and as they had already been “run in”, they were ready for whatever any driver and their individual automotive habits could throw at them. In hindsight, I don’t know why I listened to him, as he’d never so much as lifted a hammer, let alone a wrench in his life.

I did listen to him though and bought a second-hand car which cost me almost as much in repairs in the first two years that I drove it as a new car would have done. It was the first and only time that I’ve bought a second-hand car and the last time I ever listened to my uncle.

Chara Yadav has been a media professional since graduating with an honors degree in Journalism. She is currently the press officer for AskAnyDifference, a site that explores and explains the differences and similarities between the mundane and the extraordinary.

Let’s Sum That Up

These illustrate the point we made at the start of the article: some of the worst financial advice advice is just plain bad, other advice may be good for someone else but terrible for you.

We all get financial advice. Some of it is general, some of it is aimed specifically at us. It may come from people who carry all kinds of credentials or people who have none. No matter who it comes from, we should never just follow it.

Any time you get advice, look at it critically. Does it make sense? If it does make sense, does it make sense for your unique personality and financial situation? Does the person giving it even understand your needs and constraints?

Critical examination, research, and looking for a second (or third) opinion can help us avoid the pitfalls of the worst financial advice!

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