Advertising
Advertising

6 Worst Financial Suggestions Given By Your Friends

6 Worst Financial Suggestions Given By Your Friends

We often turn to our friends for advice in our day-to-day lives. Whenever we encounter a problem in our relationships or a bump in our jobs, the support of our friends manages to help us get through it. This is why we talk to them about our money management as well. Friends stick together, right?

However, if these six worst financial suggestions are what you hear coming out of your friends’ mouths, perhaps it’s better for you to take a step back, reflect on this and turn to a professional financial advisor instead:

1. “If you can afford it, go and buy it.

Peer pressure is not just relevant to drinking alcohol or participating in illegal activities. It’s also highly prominent when it comes to spending money. How so?

When we’re with our friends, we subconsciously fall into the trap of lifestyle inflation. We think that we can just buy anything – even if we don’t want or need it – just because we can afford it.

Advertising

Is your friend wearing a branded dress that you don’t even like the style of? It doesn’t matter! You’ll buy it anyway, just to show to everyone that you have enough money.

2. “Use your credit card all the time – it’s free money!”

One of the worst financial suggestions is telling someone to use their credit card because it’s free. “No one gets imprisoned by drowning in credit card debt,” they’ll tell you. “Spend as much as you like; it’s like free money handed out by your fairy godmother.”

Well, the next time you use your credit card for something that you know you can’t afford, think about this: is that item really worth the trouble of getting blacklisted by banks, being denied loans and receiving a bad credit rating?

Credit cards aren’t free. They are ridiculously expensive. Take time to read the fine print!

Advertising

3. “Take as much time as you want going to college, it’s worth all the debt anyway.”

Going to college is a noble act of its own. But if you’re just going to study because you can’t find a job yet, or because you’re not sure what your passion is yet, then don’t.

Consider the opportunity cost involved in this scenario. How much money could you have earned working instead of getting your Master’s degree?

4. “Want easy money? Put all your money in ABC Inc.”

A universal rule in investing is that it always carries a risk. Investing is all about diversifying your investment so that you can manage the risks. Diversifying means that you won’t put everything in one company and in one security.

Instead of putting all your efforts in stocks and in just one company, why don’t you spread out your money in different companies? Take this one step further and hold different securities, such as treasury bills and term deposits too.

Advertising

If you put all your money in one company and that company folds, then you’ll be sorry. Believe me: I learned this the hard way firsthand.

5. “Let’s travel luxuriously. We’re only young once.”

You might have heard this one before: “It’s easier to earn money than to earn moments.”

Now, that statement may be true. It may also be false.

But don’t you think it’s better to save money and earn moments at the same time? Traveling is about experiencing new cultures and being immersed in a new way of living. It’s not about checking in at five-star hotels and eating at hugely overpriced restaurants.

Advertising

6. “Just save and you’ll be fine!”

Saving is important. It’s the first step up the financial ladder. But, if you want to manage your money wisely and let it work for you, don’t just settle with saving money. Start investing, tooFirst, start with investing in your knowledge by reading up on personal finance books. Then, save enough money for you to start an investment account.

Our friends may have our best interests at heart. But if they’re not experts at finance, they need to think twice about giving these terrible financial suggestions. Don’t you think so too?

Featured photo credit: DSCF1734.JPG/ronnieb via cdn.morguefile.com

More by this author

The Ultimate Morning Routine for Success of Highly Successful People 9 Surprising Benefits Of Kimchi That Will Make You Want To Try It Now 11 Signs That Tell You It’s Time to Let Go This Old Woman Has Lived On A Cruise Ship For 7 Years 8 Approaches Ultra-Productive People Use To Finish Their Tasks

Trending in Money

1 How to Develop a Millionaire Mindset in 6 Simple Steps 2 How to Eat Healthy on a Budget (The Definitive Guide) 3 9 Millionaire Success Habits That Will Inspire Your Life 4 Top 5 Spending Tracker Apps to Manage Your Budget Smart in 2020 5 How to Set Financial Goals and Actually Meet Them

Read Next

Advertising
Advertising
Advertising

Last Updated on January 21, 2020

How to Develop a Millionaire Mindset in 6 Simple Steps

How to Develop a Millionaire Mindset in 6 Simple Steps

We all like to dream about being financially wealthy. For most people though, it remains a dream and nothing more. Why is that?

It’s because most people don’t set their mind to achieving that goal. They might not be happy in their current situation but they’re comfortable – and comfort is one of the biggest enemies of growth.

How do you go about developing that millionaire mindset? By following these simple steps:

1. Focus On What You Want – And Take It!

So many people are too timid to admit they want something and go for it. When there is something that you want to accomplish don’t think “I could never actually do that”, think “I could do that and I WILL do that”.

Millionaires play to win, not to avoid defeat.

This doesn’t mean to have to become a selfish jerk. What it means is becoming more assertive and honest with yourself. You don’t have to grab off other people. There is a big pot of unclaimed gold in the middle of the table — why shouldn’t you be the one to claim it? You deserve it!

Advertising

2. Become Goal-Orientated

It’s almost impossible to achieve anything if you don’t set firm goals. Only lottery winners become millionaires overnight. By setting yourself attainable goals, you will get there eventually. Don’t try to get rich quickly — get rich slowly.

Let’s take the idea of making your first million dollars and expand on what kind of goals you might set to get there. Let’s also say you’re starting at a break-even position – you’re making enough to get by with a few luxuries, but nothing more.

Your goal for the first year can be having $10,000 in the bank within a year. It won’t be easy but it is doable. Next, you need to figure out the steps you need to take to achieve that goal.

Always look at ways to make growth before cutbacks. With that in mind, you might want to see if you can negotiate a pay rise with your boss, or if there’s another job out there that will pay better. You might be comfortable in your old job but remember, comfort stunts growth.

You may also have other skills outside of your workplace that you can monetize to boost your bank balance. Maybe you can design websites for people, at a fee of course, or make alterations to clothes.

If this is still not enough to make the money you need to save $10,000 in a year, then it’s time to look at cutbacks. Do you have a bunch of old junk that someone else might love? Sell it! Do you really need to spend $10 on your lunch everyday when you could make your own for a fraction of the cost?

Advertising

If you are to become a millionaire, you need to start accumulating money.

Here’re some tips to help you: How to Become Goal Oriented and Achieve More in Life

3. Don’t Spend Your Money – Invest It

The reason you need to accumulate money is for step three. Millionaires tend to be frugal people, and that’s because they know the true value of money is in investing. Being your own boss goes hand-in-hand with becoming a millionaire. You’ll want to quit your regular job at some point.

Stop working for your money and make your money work for you.

Rather than buying yourself a new iPad, that $500 could be used to invest in the stock market. Find the right shares (more on that later), and that money could easily double within a year.

There’s not just the stock market — there’s also property, and your own education.

Advertising

4. Never Stop Learning

The best thing you can invest in is yourself.

Once most people leave the education system, they think their learning days are over. Well theirs might be, but yours shouldn’t be. Successful people continually learn and adapt.

Billionaire Warren Buffet estimates that he read at least 100 books on investing before he turned twenty. Most people never read another book after they’ve left school. Who would you rather be?

Learn everything you can about how economics works, how the stocks markets work, how they trend.

Learn new skills. If you have an interest in it, learn everything you can about it. You’d be surprised at how often, seemingly useless skills, can become extremely useful in the right situation.

Start developing the habit of learning continuously: How to Create a Habit of Continuous Learning for a Better You

Advertising

5. Think Big

While I advise to start off with small goals, you absolutely should have a big goal in mind. If you have a business idea, then that is your ultimate goal – to start that business and make a success of it. If you want to invest your way to millions of dollars and do little work other than research, then that is your big goal.

There is no shame in not achieving a big goal. If you run a business and aim to make $1 million profit in a year and “only” make $200,000, then you’re still significantly ahead of most people.

Aim for the stars, if you fail you’ll still be over the moon.

6. Enjoy the Attention

To be successful, you have to be willing to promote yourself and enjoy the attention to a certain extent. Now the attention doesn’t need to be on yourself, it could be on your brand, but attention definitely attracts money.

Never be embarrassed to get your name out there. That means finding a spotlight and being brave enough to step right up underneath it.

If you run a business, try contacting the local papers. You’d be surprised at how amenable they often are to running a story about you and your business, and it’s all free publicity.

Above all, remember: You control your own destiny. Push hard enough for anything and you’ll get it.

More About Thinking Smart

Featured photo credit: Austin Distel via unsplash.com

Read Next