🌼6 Terrible Investment and Money Advice I See a Lot of People Still Doing( VERY POWERFUL)

🌼6 Terrible Investment and Money Advice I See a Lot of People Still Doing( VERY POWERFUL)

You can never reach your financial goals if you keep following the wrong path.

“The money you make is a symbol of the value you create.”

― Idowu Koyenikan

People have different goals with their money. Many want to retire early, others want to build an empire, have luxury cars, and have everything they want, and others just want to never worry about it.

Read also: The nine levels of financial freedom you should aim for

However, even though there are diverse ways you can achieve financial freedom, specific methods are blocking you from completing your goals, and if you keep doing them, they will have the opposite effect on your life.

I’ve seen people make the same mistake over and over again and then wonder why they’re in the same place.

The problem is that they don’t realize that although they could read a piece of advice in a famous book, it doesn’t mean that it is correct in today’s reality, especially since life is evolving.

Here are six terrible pieces of money advice I still see people doing, despite all the signals that are not the best option for your financial health.

Diversify their income and investments too much.

A few days ago, I read a post by a guy who explained how he made $100–$1000 with seven different sources of income. The problem is that although these side hustles could indeed generate a good amount of monthly money, the quantity of work they required was also immense.

The harsh reality that many people do not want to understand is that sometimes a stable job giving you $5000 is much better than 6 or 7 side hustles giving you the same monthly amount.

This is because the amount of work you must dedicate to each business to make it work is a lot, especially when you start to put everything to work correctly. And sometimes the reward for that is not worth it.

That’s why many of my side hustles failed. I had a period where I only cared about making money no matter what, so instead of focusing on growing what I was already doing, I started trying different businesses to “diversify and grow” my wealth, but it didn’t work.

The same thing happens with investments; even if you think you can have money in all markets and a portfolio for each of them, the reality is that focusing on a single market and branch will give you better results.

Don’t seek financial independence before any other goal.

Most people confuse financial freedom with financial independence, and they fail to try to reach the first one without mastering the second one.

Financial freedom is simply having enough money to cover your living expenses without having to work every day. It could be having enough money in your bank account, passive income, or a business running by itself.

On the other hand, financial independence means you have control over your income.

It typically represents generating income for your sources (not necessarily all passive), having a stable job along with a good side hustle and an investment portfolio with cash flow, or rents and Airbnb, where you know you have the potential to earn money when you put your energy there.

I consider it a mistake to reach financial freedom without financial independence because the second one will make it easier for you to achieve the first, and it will give you signals on how you can do it.

Without financial independence, you will be a slave of the business or job you have until you reach a specific amount of money.

Have toxic debts on purpose.

There are some financially healthy debts. Some people have built successful businesses and started with a small loan. Some people spend more on public transportation and have obtained a loan to lower that expense by having their car, and there are excellent acquisitions in houses that started with a loan.

But there are other debts that don’t make any sense. For example (and the most common one), having debt on your credit card because you decided to expend more money than your monthly income capacity.

According to Lending Tree, 41% of Americans carry a balance on their credit cards, and the country’s total debt is $887 billion of credit card debt in 2022 alone. The annual percentage rate of a credit card is more than 20%, and most of the purchases are from clothes and tech stores, not even basic things.

The problem is that despite the fact that it is clearly a bad decision, people continue to use credit cards to get into debt just because it is easy to access, and that makes them have the worst debt they can have financially.

Don’t have an investment plan, and just buy where you feel you will earn money at the moment.

As ridiculous as it sounds, the reality is that most people don’t have an investment plan and only buy what they feel is popular at the moment. That’s why you see many people right now complaining about cryptocurrencies because they didn’t make a single analysis and decided to buy there when everybody was talking about it.

And this is why they are broke right now (and probably will never reach financial freedom if they keep that mentality).

Dreams with no direction will remain as dreams. If you don’t understand that you need to have a specific path to every investment you make and attach to it even when there is a recession, you will keep making mistakes with your money.

Don’t accept you made a mistake with your investment.

My best friend placed a short order last week on a stock that said it was going down based on the technical analysis. I showed him that this company was receiving good news, according to Twitter and that the right thing to do would be to get out of that position.

However, he said that his analysis was correct according to what the graphic always does, despite the external reasons that could impact a price. The result is that he is still losing money, waiting for the stock to go back.

This situation happens more times than I will want. We often do not want to accept that we made a mistake because of ego or feel that we know a lot. However, this is one of the reasons why most people lose millions daily.

It’s okay to be wrong about something, it is not the end of the trade or business, learn about it and move on, or you will be losing money forever.

Put too much emphasis on investments or business that doesn’t have growth capacity.

“When you work on something that only has the capacity to make you 5 dollars, it does not matter how much harder you work — the most you will make is 5 dollars.”

― Idowu koyenikan

99% of my side hustles failed because I didn’t know how to scale the business I started, and I learned along the way that it didn’t matter how hard I worked on this; some businesses simply couldn’t grow.

The problem is that we often focus on the wrong metric to start something without realizing that the only meaning of the business or investment we are doing only has to do with our interest in it at that moment.

Putting too much emphasis on things that don’t have growth capacity only wastes our time, but every day I see people keep working on things just because they don’t want to accept that fact. Make sure that what you are doing has potential, or you will keep working hard for the same $5.

Read also: 3 enemies of your success (amazing revelation)

Final thoughts

The path to financial success can seem difficult. There are different types of financial freedom and success and diverse ways to achieve your goals that sometimes feels impossible to understand which is the best path for you.

However, knowing terrible advice is easy. You have to analyze if what others recommend will help you to be closer to the goals you want to achieve or not and if a financial decision makes sense for your current situation.

Most of them don’t make sense to anybody, but I still see many people doing it because they don’t understand the negative impact on their lives.

Here are the six terrible financial advice I see most people doing but that is making them lose money summarized:

Diversify their income and investments too much.

Don’t seek financial independence before any other goal.

Have toxic debts on purpose.

Don’t have an investment plan, and just buy where you feel you will earn money at the moment.

Don’t accept you made a mistake with your investment.

Put too much emphasis on investments or business that doesn’t have growth capacity.

CONTRIBUTED BY Desiree Peralta

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