Worst Financial Advice

There is an old saying, which is not applicable to finance, "The road to Hell is paved with good intentions." The adage warns that having good intentions will not automatically synch up with the execution or results. Accordingly, there several piece of financial advice that make me laugh because when applied incorrectly or timed poorly, these nuggets of advice are better left unheard.

1. "Buy low; sell high"

Not all advice is equal

At best, this phrase is a simple answer for “how do you make money in the market?” As advice, it is virtually useless since it gives no meaningful instruction. At worst, the end result is constantly selling your winners to buy perennial losers.

2. "Never invest in something you don't understand"

If you learn by doing (as everyone does), then this advice leaves you nowhere to begin. You cannot understand the market or investments without being in them, which leaves nowhere to start. Even the most successful investors in the world understand how little sense the movement of the stock markets make.

3. "Time is money"

Neither is a renewable nor unlimited resource. There are certainly situations by which “time is money” is a reasonably adequate adage, but it is neither universally true nor good advice. Out of context and in the wrong minds, this phrase creates more confusion than clarity.

4. "Hope is not a strategy"

This can be a snarky response to hearing someone say “Here’s hoping.” Except, hope comes after putting a strategy in place, so this phrase can turn a wannabe soothsayer from a smartass into a dumbass quickly when used abundantly.

5. "If you do what you love, you'll never work a day in your life"

There is a small but important difference between this phrase and "If you love what you do, you'll never work a day in your life." The latter can be great advice for the right people. But the former advice could ensure financial ruin. If you grow up following this advice with poor execution, then it might as well be a cautionary tale, "if you only do what you love, then you'll never work a day in your life," because you are unproductive, selfish &/or immature. As Dave Ramsey (a man who seemingly loves what he does) loves to say, “Adults devise a plan and follow it; children do what feels good.”