stupid beliefs about finance

kidmugsy

People ask for advice on what to read; people ask for advice about what to invest in. But what many people probably need above all is warnings against stupid but common beliefs. I invite MSE fans to identify some of these. I'll start the ball rolling with three that I've seen hereabouts recently.

(i) Never sell an asset at a loss.
(ii) Rent paid is dead money.
(iii) When you die your pension company steals your annuity.

Lokolo

When you get interest, it is based on the average amount over the course of the period, not on the ending balance! (regular savers take note!).

spadoosh

bulk buying saves you money

sorry thats not finance really.


one from my mortgage advisor/salesman

if you go with us at 6.49% without fees it would be cheaper than going with 'insert other compnmay here' at 5.19% with fees.

My reply 'thats called lying' she didnt look best pleased i had called her a liar but when i asked her to show me how it was truthful she couldnt, and certainly not in my situation!

atush

Well, given I disagree with 2 here already (ie rent paid generally is Dead money, and yes bulk buying can save you money) then I don't know what the point of the list is?

One of th worst is, 'I have money to save (for my child, for retirement whatever) and I want to take no risks with it, I want to keep it in cash.'

grey_gym_sock

well, not buying saves you more than bulk buying ... (not sure if that was what spadoosh meant, though)

what does "dead money" mean? spent money? that's true, but not a bad thing. you have to live somewhere. it's possible to overspend on rent, like on anything. if you're an owner-occupier, you're effectively spending the rent which you forgo by not letting your property. so either way, you're spending the rental value.

Masomnia

That holding cash means no risk.

atush

well, not buying saves you more than bulk buying ... (not sure if that was what spadoosh meant, though)

Not buying isn't always an otion. buy TP when you need it a roll at a time, will cost you many time more per roll than buying BOGOF, 2 for 3 or even just buying in packets of 18 rolls.

That holding cash means no risk.

That is part of what I meant.

Another is, that Gold can only go up ;-)

Reaper

Pensioners "living off the interest" from their savings accounts are not using up their capital.

Onawingandaprayer

A bank is a good place to start for financial advice.

and...

Natwest - Helpful Banking
(yeah, right...)

Lloyds - for the journey
(to who knows where)

Banking with HSBC couldn't be easier (erm, rather suspect it could)

Santander - the current account that gives you more
(hassle? Problems? Stress-related illnesses?)

black_taxi_2

good point about bank advice----i went in my bank to get advice one to one-- and all the guy did was call in another supervisor for a sales pitch.

i was so shocked ---first time i realised banks were about getting as much as possible out of you.went for a few pints/nice meal----closed my account a week later

JohnRo

Governments own central banks.

(yet still charge themselves interest)

Quantitative easing boosts lending and helps the economy.

(counterfeit money never benefits anyone but the person printing it)