5 Pieces of Dumb Financial Advice That Most People Believe
When it comes to money, everyone likes to put in their two cents.
Oh, you should definitely buy and not rent. Stay away from credit cards; they’re evil. Why are you so worried about your credit score? It doesn’t matter.
There’s a lot of — quite frankly — dumb advice floating around out there, and it can be difficult to figure out what’s up and what’s down.
Well, we’re here to set the record straight. Here’s all the dumb money advice out there — and what you should do instead.
Dumb Advice #1: Keep Money in Your Checking Account
You’ve probably heard the best way to grow your money is to stick it in a savings account and leave it there for, well, ever. That’s bad advice.
Maybe you’re just looking for a place to safely stash it away — but still earn money. Under your mattress or in a safe will get you nothing. And a typical savings account won’t do you much better. (Ahem, 0.06% is nothing these days.)
But a debit card called Aspiration lets you earn up to 5% cash back and up to 16 times the average interest on the money in your account.
Not too shabby!
Enter your email address here, and link your bank account to see how much extra cash you can get with your free Aspiration account. And don’t worry. Your money is FDIC insured and under a military-grade encryption. That’s nerd talk for “this is totally safe.”
Dumb Advice #2: You Should Get 3 Auto Insurance Quotes
People love to tell you to shop around. “You should be getting three different quotes to get the best price on car insurance,” they say.
Sure, this sounds like good advice. Here’s why it’s wrong: Comparing only three companies isn’t nearly enough. We suggest comparing 40. But who has time for that?
A company called Savvy will do it for you for free. It gets people an average of $826 back in their bank accounts a year — and you’ll get the same coverage you already have.
It doesn’t matter when you last renewed; you can get a check from your old company for the time left on your previous policy. (Read: They probably owe you money.)
You don’t have to make any calls or fill out any forms. It takes two minutes to see how much Savvy can put back in your pocket.
And the best part? Because we’re driving less, some insurers are slashing prices this month.
Dumb Advice #3: You Need to Save $1,000,000,000,000,000 Before You Die
Have you thought about how your family would manage without your income if you’re gone? Chances are your checking account balance won’t last forever.
You’re probably thinking, I don’t have the time or money for that. But a company called Fabric can help you apply for a term life insurance policy that could give your family a big chunk of money (the coverage amount you applied for) if you pass away. (We’ve heard people are getting policies for as little as $14 a month.)
Maybe you’ve thought about this before, but it feels too overwhelming. The truth is, this is one of the easiest (and smartest) things you can do with your money right now. It takes about 10 minutes to apply, and you don’t even have to leave your house — you can do it all from your browser.
So if you want to help make sure your family is set up for life after you’re gone, take 10 minutes to fill out an application.
Dumb Advice #4: You Need to Be a Billionaire to Invest in Real Estate
The stock market can be a scary place. Stock prices shoot up and down like a roller coaster ride, and who knows when the whole thing might crash?
It would be nice to diversify and invest some of your money in real estate, but don’t you have to be wealthy to do that?
Now you can invest like the 1% does, and all you need to get started is $500. A company called DiversyFund will invest your money in private real estate — specifically, in apartment buildings it co-owns with its investors — and you only need $500.
You can see exactly which properties are included in your portfolio through their online dashboard — like a 54-unit apartment complex in Salt Lake City, Utah, or a 30-unit waterfront property in Stuart, Florida. And you don’t have to experience the headaches that come with being a landlord — DiversyFund does all the heavy lifting for you.
Real estate has historically been very stable compared to the stock market. Over the long term, investing in the stock market will earn you an average annual return of 7%, adjusted for inflation, according to a number of studies. DiversyFund can’t guarantee how its investments will perform in the future — no one can — but historically, real estate has outperformed the stock market for the past 30 years.
So you don’t need a fortune to invest in real estate. All you need to get started is $500. Sign up here to start investing today.
Dumb Advice #5 You Have to Pay Your Credit Card Bill Every Month
If you have credit card debt, you know. The anxiety, the interest rates, the fear you’re never going to escape…
And the truth is, your credit card company doesn’t really care. It’s just getting rich by ripping you off with high interest rates. But a website called AmOne wants to help.
If you owe your credit card companies $50,000 or less, AmOne will match you with a low-interest loan you can use to pay off every single one of your balances.
The benefit? You’ll be left with one bill to pay each month. And because personal loans have lower interest rates (AmOne rates start at 3.99% APR), you’ll get out of debt that much faster. Plus: No credit card payment this month.AmOne won’t make you stand in line or call your bank, either. And if you’re worried you won’t qualify, it’s free to check online. It takes just two minutes, and it could help you pay off your debt years faster.