Aug. 14 is Financial Awareness Day, dedicated to helping Americans developing good financial practices. Yet some of the most common financial advice is wrong, says Pamela Yellen, financial investigator and two-time New York Times bestselling author. Her tips can be applied year-round!
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Be Aware These Common Financial Advice And How To Avoid Them
Much of the financial advice circulating online and in other media is generalized, cranked out for a mass audience and based on conventional “wisdom” that’s assumed to be true. But upon closer examination, many of these platitudes turn out to be false and can be detrimental to your financial security. Examples include:
- After you retire, your basic expenses will be much lower than when you were working.
- To build wealth, you must be willing to accept risks.
- You’ll come out ahead by deferring your taxes—and that’s one of the prime benefits of retirement plans such as 401(k)s and IRAs.
- Fees associated with mutual funds are negligible compared to the returns that are possible.
- If you are carrying debt, your first priority should be to pay it off before trying to save money.
Pamela recommends asking these three questions to weed out the good from the bad:
- Will this advice give me peace of mind and let me sleep at night?
- Will this advice help me get where I want to go without taking unnecessary risk?
- Will this advice allow me to be in charge of my money and my financial future?
“Sound financial advice you can trust gives you a Yes! answer to each of those three questions,” Pamela says.
Pamela shares a time-tested wealth-building strategy that allows people to answer “yes” to all three questions. This method, known as Bank On Yourself, provides guaranteed growth, tax-free retirement income, and gives people access to their savings without restrictions or penalties whenever they need it. And it allows savers to know exactly how much money they will have upon retirement and every step of the way.
About the Author
Pamela Yellen is founder of Bank On Yourself, a financial investigator and the author of two New York Times best-selling books. Readers can get a free copy of her latest book, "Rescue Your Retirement: Five Wealth-Killing Traps of 401(k)s, IRAs and Roth Plans — and How to Avoid Them," here for a limited time.