12 Pieces of Dumb Financial Advice That Most People Believe

Finding terrible advice is very easy today. Many gurus proclaim something as the best and another expert says the opposite. Who should you believe? According to Certified Financial Planners, Advisors, and other money experts, here is the advice you should avoid.

A common mistake is a firm blinding conviction that your company’s stock will continue to rise. When you are rewarded with an equity compensation package, including incentive stock options, restricted stock units, and discounted shares through an employee stock purchase plan, it’s sometimes hard to notice the risk stacking up.

You should put your old home up for rent after moving into a new one. We hear this from clients at least once a week. In most cases, it's a wrong financial and lifestyle decision. Being a landlord can be time-consuming and frustrating.

"Become a Landlord"

This advice can cause many investors to concentrate their portfolios on just a few familiar names. Many times these names happen to be large stocks that trade at premiums. Focusing too heavily on these names could translate into lower expected returns for an investor who primarily concentrates their portfolio on just these names.

Invest in Familiar Companies

Many people believe that a tax refund is a good thing. They also assume that any tax balance due means the tax preparer isn’t skilled at his job. This assumption couldn’t be further from the truth. A sizable tax refund means you loaned money to the government for free (when you could have been earning interest).

A Tax Refund is Better Than Owing

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