The Worst Money Advice Ever That I See (Almost) Everyone Following
Then they complain when they go broke
The worst money advice and Coca-Cola have something in common.
Douglas Ivester was the CEO of Coca-Cola between 1997 and 2000.
One of his worst ideas was to raise sales prices on hot days.
The vending machines were supposed to change prices due to the temperature.
This idea is not new.
But Doug Ivester talked about it in an interview and made it clear that it was all about profits that mattered.
The public went nuts and Coca-Cola’s stock price went from $37 to $18.
It is more likely that Douglas Ivester did not make that stupid decision alone. The advice he received was clearly the recipe for total failure.
This is what I see with a lot of online money advice
There are countless money advice or myths on Twitter and Reddit.
One of the worst pieces of money advice of all time is:
“It worked for me.”
Or your online friend says:
“It didn’t work for me.”
Other clueless users say:
“No, you don’t need that, I don’t have that either.”
And others:
“Yes, you need that, I have that too.”
No matter who you talk to when it comes to money, you will always hear these comments.
The myth of the intelligent investor
No matter whether we are talking about a short, medium, or a long-term investment.
It doesn’t matter if it’s individual stocks or funds, you will experience the same situations here.
People just talk the talk.
“You lose all your money there, I tried it back then and then half of it went away…”
Or those who guess and go further.
“You have to invest everything in cryptocurrencies or gold, look how much profit I have already made.”
All of that advice is wrong.
Because the above advice is just:
“It didn’t work for me” and “It worked for me”.
In most cases, the guess is based on a point of useless past data.
One may have been ironic by fate, the other by being in the right place at the right time
In investments, there is no universal truth.
Most of the advice you get is like the advice of a lottery bettor:
“You absolutely have to play the lottery, it will make you rich. Look how much I won… It worked for me.”
Sounds ridiculous, doesn’t it?
But that’s exactly what happens in many cases when it comes to money, investments, and finances.
You should not base your decisions on someone else’s random result.
To be honest, I’m not saying that nobody knows anything
You should just be careful.
I see many people who discourage and recommend something just because of good or bad experiences with it.
Often this is an opinion that results have formed. Bygone waters.
A single event that has nothing to do with facts influences the decision.
This is exactly what can be observed in the next topic.
Buy or rent is a stupid debate
I still remember well when I attended a lecture.
At some point, you inevitably come to the topic: of buying real estate right after graduation.
And when we analyzed the performance after inflation at a historical point in time, someone in the audience said:
“Yeah, but my apartment is worth so much more now, that can’t be true…”
Which is basically the same as “Yes, but I won the lottery, the statistics can’t be right.”
To be honest.
It has to be said that the comparison is a bit lame.
Real estate prices will either normalize again or the annual increase will return to normal value. If you are talking to someone now, you will always hear:
“Buy, buy, buy.”
But to honestly know whether you should buy or not, you must first ask the question:
“Are you buying the apartment as an investment or to live in it?”
These are two different decisions or starting situations.
No matter what you plan to do.
Again, “it worked for me” is not a fact and not a basis for decision-making. It is a single data point that has been influenced by an incredible number of factors.
We also hear “No, you don’t need that, I don’t have that either.” and “Yes, you need that, I have that too.” You will hear this with incredible frequency, especially with insurance companies.
Summing up this story
Your decisions should be based on facts and knowledge, not on individual experiences in someone’s life.
“You don’t need this, I don’t have that either. You need this, I have that too.”
Or your Twitter and Reddit friend:
“That worked for me. That didn’t work for me.
It’s often useless as advice.
At worst, it will be a total failure like Douglas Ivester’s at Coca-Cola.
Don’t be like Douglas Ivester.
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