Carnival of Catastrophic Financial Advice

Sorry for the alliteration. It’s the Sports Broadcaster inside me wanting to get out.

A few weeks back I told the story of The Worst Financial Advice I ever Gave, where I told you about inadvertently sending a friend off to buy a timeshare condominium (honestly that was not my plan), and after getting some good feedback, I challenged some of my financial bloggers to do the same, and the responses were quite interesting.

Carnival of Catastrophic Financial Advice #1

The responses I got were many and varied, but let’s wander through them:

Larry MacDonald

I’ve been holding off giving you a story hoping a incident as humurous (sic) as yours would surface in my memory but so far drawing a blank. All I can think of to this point is visiting my dentist while I was writing my book on Nortel Networks (in early 2000 just as Nortel stock was at its peak),and having read many bullish articles and reports as part of my research, recommend he load up on Nortel. As the crash unfolded and the stock languished in following years, my dental bills seemed to get bigger and bigger every year.

The Canadian Capitalist

When I first started investing, I read a lot of books (regrettably none from the recommended list) but for some reason, I was most attracted by the Motley Fool books. I mean, if guys wearing joker hats are making a killing on Iomega and writing books about how easy pickings can be had in the stock market, really how hard can this investing thing be?  …. Canadian Capitalist Worst Financial Advice Ever

Michael James on Money

Michael James on Money commented that he doesn’t give bad advice, but he has had his advice interpreted incorrectly. He did comment:

The truth is that while I have opinions on just about every financial subject, I don’t advise people directly very often. For example, although I often say that trading stock options is a very bad idea for most people, it could be right for a particular person … Michael James Worst Financial Advice Ever

Loonies and Sense

Loonies and Sense also wrote of their experiences, including this excerpt:

“Lots of people are in debt; it’s normal.” – The sad thing about this one is that it’s not untrue. Still, justifying my situation to myself in this way really showed a lack of maturity and ambition. Now that I’ve set a goal to get out of debt, I feel like I’m expecting more of myself, and that encourages me to rise to the task.  … Loonies and Sense Worst Financial Advice Ever

Nerd Money

Nerd Money had an experience where his good advice wasn’t followed:
I usually try to give information to anyone who asks a question. To the best of my ability, I’ll explain what I know and then send them away, telling them that they need to understand for themselves.
… Nerd Money Worst Financial Advice Ever

Monty Loree

Monty Loree, sent the following: I don’t generally give out financial advice unless I’m pretty sure about it. I have given information that I knew that was right, however wasn’t backed up by the industry. One that comes to mind is when I talk about not having to deal with collection agencies.

The truth is: There is no law that says you have to deal with a collection agency.  You have to deal with them by contractual agreement only.The reality is: it seems that the collection industry will just keep calling regardless of if they have contracts in place or not.  Collection agencies don’t receive any heat from the regulators as this is a creditor friendly legal system.On the one side, I wish I never mentioned this to people as it gives them false hope.

On the other side, it’s the truth and I wish collection agencies would heed it. As I was developing my credit repair business, there were a lot of truths that came out.  Many of them were not accepted as the industry had been operating for so long outside of the guidelines that I uncovered.  Regulators are slow to move again as it’s a creditor friendly legal system.  The legal systems favour creditors over debtors.