Bad Financial Advice | Dont Listen To THIS!

In this video we give you 5 financial tips that may do you more harm than good. Be careful what you hear out there! **** Check out links in the description below 👉

You may have heard some of this financial advice before but let us tell you why some of it might just not apply to you we’re starting right now welcome back to the channel we’ve got another great video for you today i always say this this one we’re going to give you some of our take on some of the financial advice that you may have heard out there on the internet

And why some of it just you know might not apply to your circumstance let’s jump right into it because we have a lot to say about this so the number one point we want to make i think we hear this all the time we hear that you know debt is bad you have to pay off your debt immediately don’t have any debt and you know there’s really this movement of people trying

To pay off their debt we’re debt-free which on the surface doesn’t seem like a bad thing and it typically is not however keep in mind that the rate matters and the type of investment or liability that you’re trying to pay off also matters what we mean by that if you have a mortgage and right now mortgage rates are really low if you happen to lock in a really low

Mortgage rate you may not necessarily want to pay it off early if you could take that money that you were going to put into your mortgage and invest it right if you can make an 8 return on the market on average versus you know let’s say a 2 or under mortgage rate it just doesn’t always make sense to pay it off early yeah and i’m just going to throw it in there for

You financial savvy people out there this is i think what’s called an equity risk premium and that is basically the difference between risk-free rates which essentially what your mortgages rates are and what you could invest your money in the market right now we’re talking long-term returns obviously you could fluctuate in the short term and this depends a lot on

Your age as well especially if you’re like i’m gonna say 20s or your 30s you know obviously your goal in the long run should be to get out of debt you can’t just say a blanket statement like paying off your debt is may not necessarily you know be the best thing it could be if you’re maybe older it might be a good idea to make a few extra payments on your mortgage

Just to kind of like tie it off but if you’re like in your 20s and 30s take advantage of that compounding well and to tie into what you’re saying about compounding also if you have some debt that you’re trying to pay off which again you do want to pay off some debt of course don’t borrow from your future so don’t look at your retirement account or your investments

And think that you can just take that money and apply it towards your debt that is usually not very beneficial even if you’re looking at it and you’re thinking well my money’s only making eight percent but i have a higher rate on this debt keep in mind again compounding if you’re younger the the value of compounding cannot be understated if you’re older this may

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Be different it always depends on your time horizon but it just isn’t as simple as comparing rates yeah of course and if you do pull from your other investments uh there’s obviously tax penalties that come with it yes like you can’t pull out money from your rrsp you’re going to be taxed and whatever your current income rate is you can’t really pull out money out

Of your for example in canada that’s called the tfsa or in the us you know we mentioned something like a roth ira if you do pull it out then you can’t put it back in or invest it back in on the same tax year so you know there are certain intricacies that you have to take into consideration but i think as for most of our audience probably using your investments to

Pay off debt is just plain wrong yes right yes now on that same topic and again this one is might hit some people the wrong way but i think this applies to cars too so yes you want to make sure that you can afford the car you want to make sure that you can afford to buy your car in cash if you had to however again if you are looking to purchase a car and you’re

Offered financing at an extremely low rate i know last time we were looking at a car and financing it the rate was like zero for the first year and then half of half of one percent for the next three which is so negligible that the money we would have used to pay off our car in cash it just didn’t make sense to plop it all down when we could be investing it and

Making more on that money so if you’re comparing again eight percent market return versus half a percent it just doesn’t make sense to buy it out in cash if you could be using your money elsewhere yeah absolutely you know there’s a lot to be said about cars and car loans and that kind of thing i mean the car market right now is just wild like the market so um

You know circumstantially may some of this might apply and might not apply but i think as a general rule yeah our debt it can be dangerous right for you financially it can be so all of these steps keep in mind that you have to know the kind of person that you are you need to know if you can be trusting yourself with that right so and not all debt is good not all

That is bad these are kind of fundamental things that you should know about yourself and this actually brings us to the next point which you know the advice that you hear often is go on an all-cash diet all cash only and the reason we disagree with that advice or at least think that it’s not applicable to everyone is because there are a lot of credit cards that

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Offer benefits that you can reap so for example um you should do some research you should figure out which credit card is right for you there’s plenty of credit cards that don’t have an annual fee or the fee gets waived if you keep a certain amount of cash in your checking account there’s all these different things that you can look into for example in canada

There is the pc optimum credit card it’s one of our favorites it’s it gives you huge rewards when you shop in their banner stores and then you can redeem those rewards for cash on groceries um and those rewards really add up even if you’re not a huge spender even if you kind of buy you know just groceries and you pay a couple bills on it then you can get a lot of

Money back just by using this credit card which you wouldn’t be able to benefit or get back if you were just using cash yeah and that card is great because it applies to many stores not just groceries so anytime you purchase in really that umbrella of stores you end up getting points and then you know for us we very frequently basically have one shopping trade that

Is essentially paid for by pin by point oh yeah yeah which is great happens all the time i think we’re to this day we’re still surprised every time we shop we’re like oh look how many points i got yeah absolutely and it’s great right because if let’s say one out of four or one out of five shopping trips is free that adds up to a huge amount of money absolutely yeah

Absolutely it’s huge now again do your research um if you’re the kind of person that travels a lot look into some travel cards that maybe waive the forex fee or you know whatever that may be so do your own research and this doesn’t have to be as complex as credit card churning which is when you know people get really into it and they kind of open up new credit cards

To reap the benefits of the signing fee so sometimes credit cards will try to lure you in by saying you get this many points or this reward if you open a new card or you know they waive the fee for the first year and people just take advantage of the rewards then cancel the card after the rewards are done so you don’t have to go that extreme it doesn’t have to be

That complex but we’re just trying to say that all cash is not necessarily the right move yeah and i’ll just add that credit cards have two-part benefits one is obviously the points which is the obvious one the other one is obviously to build credit yeah and that is point number three building credit is obviously important when you want to get a mortgage car loan

You know all that kind of thing uh even uh rent renting an apartment a certain degree right banks love when you have built up credit and this is increasingly important if you’re young you know in your 20s and early 30s where you’re maybe starting to have a family and that kind of thing you go you’re probably at some point going to need some credit products and the

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Banks love for you to have a good credit score but the other thing we should keep in mind with credit cards is that if you really can’t afford it to pay it off at the end of the month you should just not buy it absolutely i mean i think that applies probably in 99 of cases right if you’re just purchasing something uh with a payment plan and you know we spoke about

Payment plans in a different video i would make the argument that you probably can’t afford it for now right you increase your income in the future or you know you get a better job whatever you could probably treat yourself maybe with better products but maybe in the meantime there’s no shame in just sort of yeah saying hey you know i can’t afford it for now and

Maybe a payment plan is not a good thing to have yeah on credit card exactly so credit cards have a time in place right credit cards can be very beneficial they can help you reap the rewards they can help you build a credit score but they can be dangerous of course especially if you cannot pay your debt at the end of the month so keep that in mind and again don’t

Use your credit card to buy things you cannot afford don’t buy your credit card do as you were saying to don’t go on a payment plan for things that you cannot afford if you had to pay in cash also just to keep in mind if you are exploring credit cards and you are worried about missing a payment or being late on a payment yes you absolutely need to watch out for

That you do want to make sure you’re paying your credit cards off on time and it does get reported to the credit bureau so it stays on your record but it stays on your record for seven years and it does become less and less impactful as time goes on so if you did run into some financial trouble in the past and you are worried that you had a bad credit score you

Are not forever doomed to be just you know the kind of person that has a bad credit score that’s not the case you can work to rebuild that and in time you can actually build up a really good credit score yeah so i think we can end it right here maybe this is part one yeah lots of good tips there hopefully you guys found some value if this uh helped you out a lot

Or a little uh hit that like button we appreciate it it helps us out a lot and consider subscribing if this is a channel that you enjoy the content of your way to end the video but check out part two and we’ll see the next one bye you

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Bad Financial Advice | Don't Listen To THIS! By Love Life Budget