Absolutely stupid advice that people pay big money to hear.
I have had more than a fair amount of experience with financial advisors, and by reading their blogs.
I have several friends that have gone to financial advisors and was amazed with the poor advice they had been given.
Number 1 bad advice.....delay your social security benefits until age 70. The average recipient gets about $1500 per month. So a five year delay results in $90,000 in benefits being delayed. (60 months X 1500 = $90,000)
The beauty of this advice is that if you die at 69 and 1/2 , who are you going to complain to???
Better program....take every dollar you can get as soon as possible and if you don't need it deposit it in a brokerage account and buy some solid dividend stocks with the proceeds. If you croak six moths early your estate will still get about $80,000 dollars to divide and argue over.
Number 2 bad advice.....when a financial advisor ask you how much money you need to live the life you planned on. Now that piece of information is nothing more than a wish list? The correct question should be "How little can you get by on?" At the end of your employment career......you may have a lot less than your objective and need to look at a reduced standard of living.
Better program....figure both ends of the equation.....maximum ideal and minimum necessary.
Bad idea number 3......age related investment choices. I have never heard any smart investor (W. Buffett, Carl Ican or anyone else talk about this rubbish) The objective of all investing is to make as much money as possible in line with your ability to understand the risk associated with your investments.
Bad idea number 4... accepting the funds suggested by your financial advisor without checking them out on Morningstar, Consumer Reports, Valueline, or some other free service.
Bad Advice number 5,.....churning your stock portfolio because your advisor suggests that you have made enough from your current holdings. Peter Lynch alway said...."water the flowers and pull the weeds".
Better idea,,,,review your portfolio stock by stock...to see if it still has the potential you originally thought it had when you purchased the first shares. The only time to sell a stock is when you have something better to invest in. |
