The Personal Finance Podcast - 15 Worst Pieces Of Financial Advice (This is Terrible Advice!)

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Starting point is 00:01:00 we're going to talk about the 15 worst pieces of financial advice. So everybody and welcome to, I'm your host, Andrew founder of Master Money. And today on the personal finance podcast, we're going to talk about the 15 worst pieces of financial advice. If you have any questions, hit me up on Instagram at Master Money Co. That's Master Money C-O. And follow us on Spotify, Apple Podcasts, or whatever podcast player you love listening to this podcast. soon. If you are a Spotify listener, Spotify just announced that you have a notification bell as well. So if you want to see when these podcasts come out, hit that notification bell on Spotify.

Starting point is 00:01:59 And don't forget to leave a five-star rating and review on Apple Podcasts if you want to help this show out. And don't forget to check us out on YouTube as well. And we are master money on YouTube. Now, today I'm going to talk about the 15 worst pieces of financial advice. We're here to debunk some of these terrible pieces of financial advice that I, circling around all over Twitter, all over TikTok, all over Instagram, where people are talking about some of these various items, and it's simply not true. And some of this stuff is considered timeless advice. And so I want you guys to understand what type of advice should I be looking into and what type of advice should I completely write off. And I'm going to give you some of the reasons

Starting point is 00:02:38 on why some of this advice is bad. And not all of it is completely bad, but the majority of it is something that can really hinder your wealth-building performance if you listen to this advice. So that's what we're going to do today. We're going to go through each of these pieces of advice so that you know exactly what to do with your money. And that's one of the most important things to do is deciphering what do I do with my money and how do I allow myself to build generational wealth from my family and myself. So without further ado, we're going to jump right in.

Starting point is 00:03:07 Let's get into it. The first one is you can't get rich working your nine to five. So we had an episode on how to build generational wealth at your day job because with proper money management skills, a nine to five can absolutely make you rich. And you can retire early. And most people who have achieved financial independence have done it with a day job. So the key is to putting your money to work every single paycheck. So every time you get paid, you make sure you're putting each and every dollar to work. That is one of the biggest keys to building wealth at a nine to five.

Starting point is 00:03:40 But you hear all these people all over Twitter and all over Instagram and all over, TikTok saying, quit your job, go be an entrepreneur. You can't get rich at your day job. And that is absolutely not true. It's absolutely ridiculous to even make that statement. And what I'm going to do is I'm going to show you a bunch of different ways on how you can get rich at your day job so that you understand you can truly build wealth with a regular old job.

Starting point is 00:04:01 What do we talk about in this podcast all the time? Small amounts of money, invested over time, become large amounts of money. This is a very simple way to put it, but it's absolutely true. and we've showed example after example after example of this. One of the big ones is, and this is why we talk about the Roth IRA all the time, if you invest $500 a month, which is how you max out your Roth IRA is $500 a month, or $125 a week, you're going to max out your Roth IRA. And when you do that, when you max out your Roth IRA,

Starting point is 00:04:32 you are going to automatically be a millionaire overtime if you make the right investment choices. That's why we talk about simple investment choices like index funds, because historically, index funds have returned 8 to 10%. So you will absolutely have a million dollars over the course of 30 years if you do that. That's just one small example. But here are some real ways to build wealth at your job because your job has benefits that other entrepreneurs don't have. One of which is you have health insurance savings. With that savings differential, you can invest that money.

Starting point is 00:05:01 This is a major factor for a lot of people because people who have a corporate job or have a job with health insurance and people who have a job without health insurance, the gap between the two is like $500. a month. So this is a massive difference between the two. Now here's the major one you want to take advantage of. This is one we talk about all the time is making sure you take advantage of your employer-sponsored retirement plans. So one of the big ones is the 401k because you want to make sure that you're taking advantage of your 401k match or if you have a 403B or a 457, all of those fall into this line. So if you don't know what an employer match is, it's when your company agrees to match your salary up to a certain percentage if you put it into a 401k.

Starting point is 00:05:42 So, for example, if they say they'll match it up to 4%. If you put 4% in, then that's your 401k match. So you're going to make 8% of your salary just by putting 4% in. Now, why is this important? Because it's free money. You have to take advantage of that free money. We've done the math on other episodes where you can make an additional million dollars over the course of a 30-year career just by taking advantage of your 401k match.

Starting point is 00:06:05 So there's $1 million right there just by having that day job. The second way to build wealth at your day job is to ask for raises or promotions. Now, we talk about how to negotiate your salary all the time on this podcast. I have an e-book that I wrote that you guys can get for free. I'll link it up in the show notes. That you can check out on our exact system on how to ask for raises and promotions. But asking for raises and promotions allows you to build massive amounts of wealth. Why?

Starting point is 00:06:31 Because, for example, if two people start at the same salary, but one person asks for a $5,000 raise every single year, that person is going to make a million dollars more than the person who doesn't ask for raises. So right there off the bat, if you took advantage of your 401k match and you got raises every single year, you're looking at a $2 million differential

Starting point is 00:06:51 just by doing those two items. The third way is the bar is super, super low, especially in corporate environments. Most people are lazy. Most people don't want to be there, but if you show up every single day and your work ethic is better than everybody else's, which isn't hard to do,

Starting point is 00:07:07 and you do what you're going to say you're going to do, then you're going to get those major promotions, 15, 20, 25 grand promotions. This is a massive difference for you. Because once you get these, you can put additional dollars to work, and you can retire that much earlier. Another option is to switch companies regularly. So if you're capped out,

Starting point is 00:07:25 if you're at a company where you can't move up anymore, there's no more promotions available, every time I've switched companies, I made 15 to 20% more at least. So taking another great position at another company is another way to make money and increase your income. And then lastly, when you're working at your day job, just make sure you're avoiding bad debt.

Starting point is 00:07:43 So make sure you're avoiding things like credit card debt, which will actually put you in reverse. So you just got to make sure that you're avoiding bad debt and putting your extra dollars towards assets that will build generational wealth for you. The second piece of terrible financial advice is to follow your passion. So on the surface, this looks awesome.

Starting point is 00:08:00 But at the same time, most people's passions don't make really good money. Now, we talk about all the time. If you're going to build out a side hustle, then make your side hustle around your passion. and figure out a way to make money with your passion because it's going to make you pursue that goal that much more. But when it's talking about your career path, there's a lot of career paths out there that

Starting point is 00:08:20 if you follow your passion, you're not going to make a lot of money. Things like your creative outlets or writing or woodworking or photography. A lot of those can't build generational wealth early on. So that's why your passions can be a side hustle. And there are ways to make a lot of money with all of those things. But make them your side hustle first and build them out and then allow your career. career path be something that makes a lot of money. Because if you can make a lot of money, you can pursue those passions later on in life. You can retire in 10, 15 years and pursue those

Starting point is 00:08:48 passions full time and figure out, how do I build a business around this? This is why it's so incredibly important to pick the right career path. And people who pursue their passions typically don't make as much money as people who do when their passions are things of that nature. So pursue a career that aligns with your strengths. What are you good at? What are you really good at. Are you good at sales, then pursue a career that's after sales? Are you really good at Excel, then pursue a career that goes after financials? There's a bunch of different options here, but make sure you're pursuing towards your strengths because your strengths within your career are going to make you wealthy. Maximize your earning potential, retire earlier, and that allows you to pursue

Starting point is 00:09:26 those passions that much more. You're going to have so much more time to pursue passions over the course of your life if you retire earlier than you are if you're just doing it an hour every Saturday. It's so much more beneficial to your life and allows you to have a much happier and fulfilling life as well. The third terrible piece of financial advice is to save 10% and you'll be set. So if you haven't seen our savings rate chart, I'll link it up in the show notes. But one of the biggest things that we talk about in that is if you save 10% you're going to be working well over 40 years. So the last thing that you want to do is save 10% of your money. But you see all these financial gurus always talking about, oh, save 10% of your money and you're going to be set. That's

Starting point is 00:10:02 absolutely not true. You want to start with at least. least saving at least 20% of your income and growing it from there. Because if you save 20% of your income, then you're actually on your way to retiring at a normal age. Now, at a normal age, what I'm saying is you'll be able to retire within 20 to 30 years. But if you're saving just 10% of your income, you're going to be working well above 40 years. A 10% savings rate just won't cut it.

Starting point is 00:10:26 So make sure you're funding your 401k, your Roth IRA, you're building your emergency fund, and you're putting your dollars into assets that will actually start working for you so you can get out of that cubicle or that office and start pursuing what you want to do. The fourth myth, and I'm tired of hearing this, is that college is useless. Now, college is absolutely something where I learned way less than I did when I got out of college. That's not what I'm saying. But college graduates earn more than people who are non-college graduates. That's what the statistics show.

Starting point is 00:10:54 That's the facts. So there's a bunch of exceptions that apply. People who didn't go to college but they built out a software programmer, or people who didn't go to college but built out a plumbing business. That's absolutely true. But the majority of people who go to college make more money than the folks who don't go to college. That is the statistics. Now, a lot of people say, well, college is really expensive.

Starting point is 00:11:13 I can't afford college. But there's no reason that you can't go to a community college on scholarship or you can't go to community college with a student loan. Now, community college is much less expensive than going to a major college. You start off your first two years at a community college, then go to a major college. And in addition, you can also go to college in state instead of out of state. Contrary to pop your belief, going to college in college in college. state is almost no different than going out of state unless you're going to like an Ivy League school. So you don't need a high priced education, but look for degrees in areas that will allow you to

Starting point is 00:11:43 earn more. So things like marketing or nursing or economics or finance, all of these will allow you job opportunities to earn a lot more. And earning enough is all you need to retire early. If you can earn enough money and have enough money where you can get raises and promotions and build up wealth, then you're going to be fine and you'll be able to retire even early. earlier. I remember when I needed to hire someone fast, but finding the right person quickly felt impossible. And if you've ever been there, you know how stressful this can be. That's where Indeed comes in. When it comes to hiring, Indeed is all you need. Instead of struggling to get your job post noticed, Indeed's sponsor jobs help you stand out and hire faster. Your post jumps up to

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Starting point is 00:12:56 Indeed.com slash personal finance. Terms and conditions apply. Hiring, indeed, is all you need. So lately, I've been noticing how fast things are changing at home. The kids are growing like crazy, clothes don't fit anymore, and routines are changing. And it just hits you. Life is expanding. And when your life grows, your responsibility grows with it.

Starting point is 00:13:17 That's something I've been thinking about more this spring, making sure the safety net we have in place actually matches the life that we're building. And that's where PolicyGenius comes in. PolicyGenius is an insurance company. They're an online marketplace that helps you compare life insurance quotes from some of the top insurers in America, all in one place for free. And their licensed team works for you, not the insurance companies. So they help you find the right coverage for your situation without all the guesswork. And they walk you through everything.

Starting point is 00:13:46 Answer your questions, handle the paperwork, and help you get the coverage that actually fits your life today and where it's going. So protect your family with a policy that grows with your life. With policy genius, you can see if you can find 20-year life. insurance policies starting at just $276 a year for $1 million of coverage. Head to PolicyGenius.com to compare life insurance quotes from top companies and see how much you can save. That's policygenius.com. Local news is in decline across Canada, and this is bad news for all of us. With less local news, noise, rumors, and misinformation fill the void, and it gets harder to separate truth

Starting point is 00:14:23 from fiction. That's why CBC News is putting more journalists in more places across Canada. Reporting on the ground from where you live, telling the stories that matter to all of us. Because local news is big news. Choose news, not noise. CBC News. Okay, when I sell my business, I want the best tax and investment advice. I want to help my kids, and I want to give back to the community. Ooh, then it's the vacation of a lifetime. I wonder if my out of office has a forever setting. An IG Private Wealth Advisor creates the clarity you need with plans that harmonize your business, your family, and your dreams. Get financial advice that puts you at the center.

Starting point is 00:15:08 Find your advisor at IDPrivatewealth.com. The fifth terrible piece of money advice is you only live once. So what a lot of people will say is spend your crap on temporary happiness. This is not true. So we talk about all the time how you want to spend your money on things that bring you value. This is absolutely different than what I'm doing. talking about. So what a lot of people will do is just spend all their money because you only live once. Yolo. If you want to achieve financial independence, you want to retire early, you want to

Starting point is 00:15:34 build wealth or retire at a decent age, then you want to at least save a portion of your income or else you're going to regret this. You're completely going to regret it later on in life. Number six, never use a credit card. Let me say this now. If you haven't been responsible with a credit card in the past, you probably should not be using a credit card for a long period of time until you become financially responsible. But if you can use a credit card responsibly, then there is so many more perks by using a credit card. The first one is you build up points. So you can build up points which are cash back,

Starting point is 00:16:02 additional cash that you can utilize towards things like travel or restaurants or whatever else you want to do. And also you can build up your credit much faster with credit cards. Credit cards have fraud protection. So if you buy something online and someone steals your debit card number, it's a lot harder to get your money back

Starting point is 00:16:18 than if you buy something online with a credit card and someone steals your credit card number. You can acquire airline miles, which means you can travel the world for free. Make sure you're subscribed to this podcast because we're going to have an episode coming up. I'm going to teach you how to travel the world for free with credit card points. And then lastly, a lot of credit cards have warranties on purchases and things like that.

Starting point is 00:16:36 Your credit cards will actually work for you. So if you can become responsible with your credit cards, they will actually help you in your wealth building path. Now, like I said, once again, if you're not responsible with credit cards, do not use this option. You're in the cash game now. But if you are responsible with credit cards, make sure you're utilizing them to your advantage and getting started.

Starting point is 00:16:56 Now, if you don't have a credit score, I recommend doing something like opening a secured credit card, which means that you put cash into that card, kind of like a debit card, but you can still build up credit. But make sure you're looking at some of the best credit cards and optimizing your credit cards. We have an episode called How to Optimize Your Credit Cards. I will leave that in the show notes as well. The seventh piece of terrible financial advice is renting is throwing your money away. So homeownership is extremely expensive. And renting is not throwing your money away.

Starting point is 00:17:24 We're going to do an episode coming up on Buy versus Rent, so make sure you're subscribed to hear that episode as well. But homeownership is extremely expensive. Things like taxes, interest, maintenance, repairs, there's opportunity cost lost. So although owning your home can provide like appreciation and a bunch of different benefits, it can give you roots in a certain area,

Starting point is 00:17:43 at the same time, it's not throwing money away if you want to rent because you're not going to live somewhere for a long period of time. The question you have to ask yourself is, am I going to live here for at least 10 years? Because that does one of two things. 10 years allows you to reap the benefits of enough appreciation if the market corrects. And in addition, it also allows you to take advantage of some of the interest pay down on your note.

Starting point is 00:18:05 So making sure that you're going to live somewhere for at least 10 years is extremely important. The eighth financial myth is the only way to get rich is to hustle 24-7. Let me tell you guys, this is one of the dumbest things I've ever heard because you have to rest. You have to give your mind and your body time to rest to recover. That's how you're the most productive. So hustling 24-7-365 is not an option for most people. Making sure you have a day off at least per week, if not too, especially if you're building side hustles and things like that,

Starting point is 00:18:33 you can burn yourself out. And then you can't build as much wealth if you're not going as hard on the other six days. So making sure you get your rest, you don't have to hustle every single day is extremely important. The ninth one is there's no such thing as good debt. This is completely untrue because there was a bunch of smart ways to utilize debt to your favor. This is why we talk about low interest debt is the last thing you do on the stairway to

Starting point is 00:18:58 wealth. If you haven't heard the stairway to wealth, check that episode out. But low interest debt is the very last thing. Why? Because you can use debt in your favor. You can utilize it for things like student loans. If you can't afford to pay college, well, student loans are going to allow you to make more money in the long run.

Starting point is 00:19:12 So getting low interest student loans is extremely important. Business loans. You can get business loans and buy a million dollar business with only 10% down. That's absolutely amazing. And this is a way to leverage other people's money so that you can build generational wealth. Home equity loans. So if you need to improve your property, you can use a home equity loan. Or if you want to buy rental properties, you can use a home equity loan.

Starting point is 00:19:36 Use the equity in your house to buy additional assets so that you can build generational wealth. And then the last one is mortgages. So if you're going to buy a house, I don't recommend buying a house with cash because mathematically it's better to invest that money. So you can get a low interest mortgage and then invest those dollars that you were going to use to put cash down on a house. Not all debt is bad. That's absolutely not true.

Starting point is 00:19:58 And mathematically, it's not true as well. Just run the numbers. Number 10, cutting out small purchases is the way to build well. Now, we've talked about this a number of times. You guys know my opinion on the latte factor. Yes, if you go to Starbucks every single day, cutting that out will make somewhat of a difference if you invest those dollars instead. But what I prefer to do is to tell people to increase your income instead.

Starting point is 00:20:19 That way, you can afford the things that you want. So if you cut out things that bring you value, you're not going to be happy with the dollars that you're spending. But if you spend money on things that bring you value and cut out the things that don't bring you value, then you're going to be so much more happy with your spending habits. And what this is going to do is if you're spending money on things that bring you joy, bring you happiness, and you cut out the things that don't bring you happiness that you're just mindlessly buying, then all of a sudden you're going to take those additional dollars and deploy them towards investments or deploy them on things that make you happy,

Starting point is 00:20:51 and you're going to be building out a perfect financial situation for yourself. Number 11, and I'm seeing this all over the place now, is that Netflix will make you bore. Watching Netflix isn't the issue, my friends. It's lack of motivation. If you're not motivated in every single day, you're not working on your goals, and you're not pursuing your goals,

Starting point is 00:21:08 and you're staying up late to watch Netflix, and you're tired when you go into work the next day and you can't work as hard. That's the problem. It's not watching Netflix. So don't listen to people who say things like that. Just make sure that you're hitting your goals, and you have time to watch Netflix if you want to.

Starting point is 00:21:21 Number 12, read 1,000 books a year. So here's something that I'm going to tell you guys, and you know that I read a book per week. But one of the big things to understand here is that if you don't read and apply what you're reading, then there's no point in reading at all. Reading is completely overrated, and doing is underrated.

Starting point is 00:21:39 So I talk about reading all the time because I want you to take in that information and use that information in your everyday life. If you're not doing that and you're reading a bunch of books, we'll reduce the number of books you're reading, and focus on doing instead. Too many people talk about, you need to read a book a day,

Starting point is 00:21:53 you need to read two books a day, you need to read three books a week. That's not what matters. What matters is reading, then applying. So what I found was, if I read a book per week, I can apply that knowledge that I'm reading,

Starting point is 00:22:05 and it makes a major difference in my life. The 13th piece of terrible advice is that your credit score doesn't matter. Your credit score absolutely matters, and your credit score can save you hundreds of thousands of dollars over the course of your wealth-building journey. We have an episode talking about this, and I'll link it up in the show notes as well,

Starting point is 00:22:21 but a good credit score means things are cheaper. So what types of things do I mean? Your car loans are cheaper. Your mortgages are cheaper. Your business loans are cheaper. Your insurance is cheaper. Your security deposits are cheaper. Everything in your life becomes less expensive with a good credit score.

Starting point is 00:22:38 Now, one of the big things to factor is even your rent can be cheaper because landlords will look at your credit score now. A lot of them do. Good landlords look at your credit score to see if you're financially right. responsible. So everything in your life becomes significantly cheaper if you have a good credit score. So make sure you're focusing on the right things within your credit score. Number 14, don't worry about saving, just earn more. So you hear people throwing out saving all the time. Now, saving money and earning more is the way to build generational wealth. But throwing out saving

Starting point is 00:23:09 completely and just trying to earn more is never going to work. Saving plus earning equals generational wealth. So living below your means is extremely powerful and extremely important when you want to do this. So you can never out-earn really bad spending habits. And that's why saving is so important. So make sure you're focusing on both, but making earning more your priority because earning more allows you to put additional dollars towards investments and build tremendous wealth. And the last one, number 15, investing is gambling. So with gambling, your odds are not good. That's why casinos make so much money. But with investing, there is a clear, direct. history of people making a lot of money and getting filthy rich with investments.

Starting point is 00:23:49 You know what doesn't do this? Your salary, your savings, your upbringing, it's your investments. There is a long history of people who have made tremendous wealth investing. So people who say investing are gambling, just do not understand the power of investing. If you look at the stock market since 1929, if you look at something like the S&P 500, since 1929, those investments have returned 8 to 10%. At the time I'm recording this, it's 10%, but I like to use 8% as a more conservative average. That is a tremendous amount of money and a tremendous amount of time

Starting point is 00:24:19 to get that rate of return. So looking at this, understanding your dollars need to work for you, put your money to work for you, invest your money in things like the stock market, into real estate, into businesses, all of these matter. And investing is not gambling. Understanding what you're investing in

Starting point is 00:24:36 and understanding how to invest and putting a good investment plan together is how you do this in a proper way. Listen, I hope you guys enjoyed this episode and learned about the most common myths within the financial world. If you have any questions, hit me up on Instagram at Master Money Co. And don't forget to follow us on Spotify, Apple Podcasts, or whatever podcast player you love listening to this podcast to. And don't forget, if you want to help out the show, leave a five-star rating and review on Apple Podcasts. And check us out on YouTube as well at Master Money on YouTube.

Starting point is 00:25:08 Thank you guys so much for listening. I appreciate each and every one of you. and we'll see you on the next episode. Rosen lasagna, medium power, 15 minutes. Sounds like Ojo time. Let's play. Feel the fun with Play Ojo. The online casino with all the latest slot

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The Personal Finance Podcast - 15 Worst Pieces Of Financial Advice (This is Terrible Advice!)

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