Forbes discusses “10 Common Financial Myths That Should Be April Fool’s Jokes” and now that the first of April has passed, we hope that you will consider some of what they say and not take it as a joke. It isn’t about doing the exact opposite of what everyone says; rather it is about making financial planning choices that work for you.
Dump stocks when the market is down. The market will go up and down; it can’t continuously go up and up. If you have chosen well and haven’t invested all you have, you can decide to hold on and wait for an upswing. And: “Then build a portfolio that matches your risk tolerance so you’re not tempted to bail out at the next downturn.”
Estate planning is for wealthy, old people. You don’t have to wait until old age and you don’t have to be rich to put plans in place to direct health care if you’re incapacitated and distribute your assets in a way that doesn’t burden your heirs.
You’re better off buying that renting. The decision to buy or rent depends on you, your lifestyle, and where you live. Overall, it makes sense to buy if you plan to stay in a home for at least a few years. However, some people have no tolerance for repairs or property taxes, even when they have the means to buy and plan to stay in an area. It really depends on you.
Pay your mortgage off early. Since a mortgage takes up a large chunk of a person or family’s budget and since mortgage rates are often low, people are advised to pay off a mortgage early. While getting rid of a mortgage can free up money for investments and other things, this advice is not just about money; sometimes it is also about the sense of accomplishment one gets from tackling major debt. On the other hand, in certain circumstances one can make a case for why you should never pay off a mortgage.
A Fee-Only financial planner can help you discern what will work based on your individual financial situation and goals.