Best and/or worst money advice

[nalto]

I'm hijacking this thread, mostly because I enjoyed the last one and I heard a real doozy the other day. When my friend asked me why I decided not to buy the new truck I've had my eye on for a while, I told him it was because I was saving my money for something bigger, like a down payment on a house. His response?

"Geez. Why would you save up to buy a house? You won't be able to buy anything else you want for a long time."

[frep]

I had a friend that traded in a car she had 2 years of payments left on, for a different car on a 5 year loan. The new car payment was $30 less a month than the first car so she was convinced she was saving money by buying the new car.

[doxieluvr]

Jan 6, 2011 15:31:31 GMT -5 frep said:

I had a friend that traded in a car she had 2 years of payments left on, for a different car on a 5 year loan. The new car payment was $30 less a month than the first car so she was convinced she was saving money by buying the new car.

Totally guilty of this one. I had two years of payments left on my last car, and I convinced (justified?) that trading it in on a car one year newer, less miles, and way nicer was in my best interest financially. Yeah right! Lets just call it like it is, I wanted the car because it was nicer. Forget the fact that it increased my debt $10k. At least it came with a lifetime warranty, and the dealer provides free car washes, oil changes, tire rotations and windshied wiper blades for free.

[dividend]

I told my dad that DBF and I were contemplating buying a TV for the spare bedroom/office. Maybe a 37" off brand (like Vizio) that we could hang on the wall. He had super awesome advice. He told me that, instead of that, we should buy the biggest freakin' TV we could possibly afford, 60"+, and all the sound gadgets and stuff that come with it. He's normally pretty conservative about spending, so I was a little surprised. He asked me, "Have you ever built a shed?" Being a 29 year old non home-owning female, I have not. He explained that no one who builds a shed ever says, "Man, I wish I'd built a smaller one." And he figures that TVs are the same way. We should buy the biggest one we can, so we're not left wishing we'd bought a bigger one. While there is a certain amount of logic there, I still think that's pretty bad advice.

[nalto]

dividend- your dad would be trouble for me!

[dancinmama]

The best money advice we ever got was to never use credit to buy a depreciating asset and we have lived by that. We have never used credit to buy anything but our homes (okay, lately that has been a depreciating asset; but let's not go into that).

[writer88]

The worst money advice I ever got was from a banker.

I had immigrated to Israel, got my first job...and couldn't make ends meet. I vented my feelings to my banker who said, "Do like the Israelis do...get an overdraft!" Okay, that conversation was in the early 1980's, when inflation was 200% a year and the Israeli currency was pegged to the dollar, before credit cards made inroads to the country. But can you imagine? A banker telling one of his customers to get into overdraft?!?

[suzwantstobefree]

I wish I had gotten some good money advice when I was younger. My parents never really talked about money and credit and other things that are important to a solid financial future.

The one thing I did do was take the advice of starting retirement savings when I was young. Although it seemed a million years away, I have faithfully contributed since I was eligible for my first 401K.

[Elderkind]

This happened to me last week! I am having Landlord problems and have been looking for another place to rent or buy if it was cheap enough. So, I go to my Credit Union and ask how much I would qualify for. They pull my credit history, ask me a few questions and come back with $125K and told me I could get MORE if I want. Now, my gross income is $43K and I only have $10K saved up for a down payment with no cushion. I was dumbfounded that they would approve that much and asked the loan origination officer why they went that high. She said it was because I have no interest bearing debt (just paid it off in October) and I had been a customer for 25 years (since I was 15). She encouraged me to go have "fun" with my house shopping and buy what I want. I decided to wait to buy until I have 20% saved up and a nice cushion for any unplanned expenses.... I understand more and more why we got into this housing mess.... #undecided#

[museumgal]

Buy a house, as big and expensive as possible, they're the best investment! Oh the minute you get it, put in a bunch of upgrades so the value will increase. (advice given by friend who now owes more on her house than it is worth, plus a big home improvment loan)

[bobbysgirl]

The best advice I've received is from 2 books. The Millionaire Next Door and, you guessed it, The Tightwad Gazettes. I was told to MYOB when I asked questions, so I found someone who would shave off the rough edges (via books). Donna was the one who added the glitter to my education.

[Elderkind]

Bobbysgirl: I love both those books but especially the Tightwad Gazette. I have three editions and I read them once a year to keep me fired up about paying off debt and saving money!

[998fbird]

Best advice:
1) Learn to separate your wants from your needs.

2) If your out go exceeds your income then your up keep will be your down fall.

Worst advice:
A penny saved is a good time lost.

[nalto]

"A penny saved is a good time lost."

Amazing how many people see it this way. It's like if you don't want to spend money, you're no fun anymore.

[Apple]

It wasn't really "advice", but when I got my paper route at age 11 I was told I WILL be saving half of everything I made. Off it went to the credit union (I had a four digit account number until this last merger, but they let my dad keep his--I think it's two or three digits). Ever since then I've been a saver--it's bailed me out of tight places more than once.

[suzwantstobefree]

I disagree. I bought a larger home and hated it. We downsized. Bigger is not better.

Agreed - I love my smaller house It is comfy and adequate in every way. Most importantly, it allows me to live a better life because I can better affoard it. An added benefit is that I don't have the ability to buy a lot of "stuff" because I don't have a place for it

[olderburgher]

Best advice: The fastest way to double your money is to fold it in half and stick it back in your pocket.
Worst Advice:
Too many to select just one. How about: "Go ahead and spend a little more" you can make it up elsewhere."

[gsbrq]

Best advice I ever got was to automate my savings. Doing so was probably the biggest factor in helping me build my net worth.

Runner up for best advice was to annualize my budget. Really helped me align my spending with my priorities.

[blackdiamond]

Best advice I ever got was halting my retirement savings and paying off my high interest credit card debt, no use earning 5-8% when the CC debt was at 15%. Once that was out of the way I funneled the money into retirement savings.

[Deleted]

The best advice I ever got - If you want to be rich, earn more than you spend.

[Deleted]

This is going to sound strange but here's my suggestion.

Never be afraid of spending money to save in the long run. This just happened: My wife & a girlfriend are going to open a small business in 2 weeks (my guess is that it will lose money but only about 40 per month). Anyway they had all of these ideas on how to decorate it. I figured out that just the decorating was going to cost $200. I suggested that they paint (it's a room inside a business) it with yellow (they were going to do it in green). Yellow is what we are going to paint out upstairs so....We bought 1 5gal can of yellow & we will use the rest to paint upstairs. Also they were going to buy a lot of items to use to display what they were going to sell. I found a deal on 3 LARGE display units & bought all 3 for $235 delivered. Ordered hangers for the cabinets for $58. They will end up having about 5 times more display area plus I am going to keep a cabinet for crystal. Total cost to open the business was around $300 & I figured that we really saved a couple of hundred by doing it this way.

BTW: If they close the business I think that I could sell each cabinet for $250 (cause they are both really big & really nice).

[happyscooter]

"This just happened: My wife & a girlfriend"


Oldtex-my DH would love to know how you scored that!

[donnafreedman]

"Know how to make a small fortune in the stock market? Start with a large fortune." :-P

[Deleted]

Best advice from my DD when she was 9:

"I know how you can win the lottery every time. Simply pull out $1 from your pocket, pretend to buy a ticket, put the dollar back in your pocket. Congratulations! You won $1."

Pegasus

[pepperdoo]

I still can't believe that one of Paul's "Friends" tried to con me into financing a "free Water for Veterans" program. Every time I see the guy I just can't help but laugh. That started my new hobby, shooting vultures.

Best advice that works so far is " No, I will not lend you money. If you want a loan, go to a bank".

[998fbird]

Pepper I am so glad you are paying attention and sticking to your guns! One of the best pieces of money advice I ever read or heard was to do nothing about investments for at least a year after the death of a loved one. Gives you time to assess your new circumstances and process some of the grief. You might also try asking your 'get rich quick' so called friends what they're willing to put up as collateral for the loan since they want you to act as a bank. Let us know what happens, I'd love to hear how they react.