We think it is important to get good financial advice and yet sometimes we also need to hear about times when things went awry. In “Lessons Learned: The Worst Investing Advice They Ever Got,” a few people spoke to NerdWallet about learning things the hard way, noting that sometimes a dishonest person will give you bad advice on purpose and other times, an honest person may give bad advice without intending you harm.
A college freshman working as a valet heard a cassette tape about penny stocks in a car he was parking. He told NerdWallet that “he didn’t have anyone to vet the idea with “and ending up being swindled by a penny stock broker. He was taken in by smooth talk but rather than give up after he lost money, he ended up working in finance.
Another young man, a recent college grad, decided not to take unsolicited advice and was all the richer for it. A colleague asked the man if he was still paying off student loans, and when he said yes, the colleague advised him to use the money from his 401(k) to pay off his student loans after tax season.
This young man was aware that “An early withdrawal from his 401(k) would incur a penalty (10% for people under the age of 59½).” When he shared this information in that conversation, the colleague insisted that getting rid of all debt as soon as possible was the best option—even if one had to lose all one’s retirement funds to do it. The young man, however, was impressed with the “very generous” match offered by his company and did not want to lose what he had already invested nor did he want to lose the chance to let that money grow.
As these two examples illustrate, financial advice is coming at us from all directions. Consulting with a Fee-Only financial planner is a way to get advice that is tailored specifically to you and your individual needs without worrying that someone is advising you with a commission in mind.